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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 March 31, 2024
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.
______________________________
(Exact name of registrant as specified in its charter)
Delaware98-1556965
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2710 Lakeview Court, Fremont, CA
94538
(Address of Principal Executive Offices)(Zip Code)
(408) 610-3915
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.00001 per share
VLDNew York Stock Exchange
Warrants to purchase one share of common stock, each at an exercise price of $11.50 per shareVLD WSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes ☒     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes      No ☒
As of May 10, 2024, the registrant had 296,188,417 shares of common stock, $0.00001 per share outstanding.



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Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (unaudited)
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited)





Explanatory Note
Unless otherwise stated in this Quarterly Report or the context otherwise requires, references to:
Legacy Velo3D” refer to Velo3D, Inc., a Delaware corporation, prior to the closing of the Merger;
Merger” refer to the merger pursuant to that certain Business Combination Agreement, dated as of March 22, 2021, by and among JAWS Spitfire Acquisition Corporation, a Cayman Islands exempted company (“JAWS Spitfire”), Legacy Velo3D and Spitfire Merger Sub, Inc., a Delaware corporation (“Merger Sub”), as amended by Amendment No. 1 to the Business Combination Agreement, dated as of July 20, 2021 (the “Business Combination Agreement”), whereby Merger Sub merged with and into Legacy Velo3D, with Legacy Velo3D surviving the merger as a wholly-owned subsidiary of the Company, on September 29, 2021;
Velo3D” refer to Velo3D, Inc., a Delaware corporation (f/k/a JAWS Spitfire Acquisition Corporation, prior to its domestication), and its consolidated subsidiaries following the closing of the Merger;
we,” “us,” and “our” or the “Company” refer to Velo3D following the closing of the Merger and to Legacy Velo3D prior to the closing of the Merger; and
2023 Form 10-K” refer to our Annual Report on Form 10-K for the year-ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on April 3, 2024.

Velo”, “Velo3D”, “Sapphire” and “Intelligent Fusion” are registered trademarks of Velo3D, Inc; and “Without Compromise”, “Flow” and “Assure” are trademarks of Velo3D, Inc.
Cautionary Note Regarding Forward-looking Statements
Certain statements in this Quarterly Report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “can,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about:
our market opportunity;
the ability to maintain the listing of our common stock and our public warrants on the New York Stock Exchange (the “NYSE”), and the potential liquidity and trading of such securities;
our ability to execute our business plan, which may be affected by, among other things, competition and our ability to grow and manage growth profitably, maintain relationships with customers and retain our key employees;
changes in applicable laws or regulations;
the inability to develop and maintain effective internal control over financial reporting;
our ability to service and comply with our indebtedness;
our ability to raise financing in the future;
our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
the period over which we anticipate our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements and our ability to continue as a going concern;
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the potential for our business development efforts to maximize the potential value of our portfolio;
regulatory developments in the United States and foreign countries;
the impact of laws and regulations;
our expectations regarding our strategic realignment and related initiatives;
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
our financial performance;
macroeconomic conditions, including economic downturns or recessions, inflation, interest rate fluctuations, supply chain shortages and any lingering effects of the COVID-19 pandemic on the foregoing; and
other factors detailed under the section entitled “Risk Factors” herein and in Item 1A of our 2023 Form 10-K.
The forward-looking statements contained in this Quarterly Report are based on current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described herein under the section entitled “Risk Factors” and in Item 1A of our 2023 Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the impact of other macroeconomic factors and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Velo3D, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
March 31,December 31,
20242023
Assets
Current assets:
Cash and cash equivalents$7,754 $24,494 
Short-term investments3,151 6,621 
Accounts receivable, net11,653 9,583 
Inventories62,799 60,816 
Contract assets9,906 7,510 
Prepaid expenses and other current assets3,082 4,000 
Total current assets98,345 113,024 
Property and equipment, net15,253 16,326 
Equipment on lease, net5,482 6,667 
Other assets17,068 17,782 
Total assets$136,148 $153,799 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$15,595 $15,854 
Accrued expenses and other current liabilities6,244 6,491 
Debt – current portion34,300 21,191 
Contract liabilities4,719 5,135 
Total current liabilities60,858 48,671 
Long-term debt – less current portion2,003 11,941 
Contingent earnout liabilities1,893 1,456 
Warrant liabilities14,455 11,835 
Other noncurrent liabilities11,489 11,556 
Total liabilities90,698 85,459 
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $0.00001 par value - 500,000,000 shares authorized at March 31, 2024 and December 31, 2023, 261,704,589 and 258,418,695 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
2 2 
Additional paid-in capital430,843 425,471 
Accumulated other comprehensive loss(44)(96)
Accumulated deficit(385,351)(357,037)
Total stockholders’ equity45,450 68,340 
Total liabilities and stockholders’ equity$136,148 $153,799 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Velo3D, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended March 31,
20242023
Revenue
3D Printer$7,660 $24,448 
Recurring payment470 575 
Support services1,656 1,664 
Total Revenue9,786 26,687 
Cost of revenue
3D Printer9,394 22,168 
Recurring payment315 447 
Support services2,892 1,540 
Total cost of revenue12,601 24,155 
Gross profit (loss)
(2,815)2,532 
Operating expenses
Research and development5,043 10,417 
Selling and marketing4,809 6,174 
General and administrative8,783 10,191 
Total operating expenses18,635 26,782 
Loss from operations(21,450)(24,250)
Interest expense(3,897)(220)
Gain (loss) on fair value of warrants(2,620)(2,553)
Gain (loss) on fair value of contingent earnout liabilities(437)(9,653)
Other income, net
94 351 
Loss before provision for income taxes
(28,310)(36,325)
Provision for income taxes(4) 
Net loss
$(28,314)$(36,325)
Net loss per share:
     Basic$(0.11)$(0.19)
     Diluted$(0.11)$(0.19)
Shares used in computing net loss per share:
     Basic260,294,161 189,609,021 
     Diluted260,294,161 189,609,021 
Net loss
$(28,314)$(36,325)
Net unrealized holding gain (loss) on available-for-sale investments52 288 
Total comprehensive loss
$(28,262)$(36,037)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Velo3D, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three months ended March 31,
20242023
Cash flows from operating activities
Net loss
$(28,314)$(36,325)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization4,567 1,560 
Stock-based compensation5,087 6,236 
Loss on fair value of warrants
2,620 2,553 
Loss on fair value of contingent earnout liabilities
437 9,653 
Changes in assets and liabilities
Accounts receivable(2,070)(5,162)
Inventories2,645 (1,425)
Contract assets(2,118)(1,124)
Prepaid expenses and other current assets1,078 2,776 
Other assets396 247 
Accounts payable(4,199)(2,694)
Accrued expenses and other liabilities(218)(1,848)
Contract liabilities(416)(4,583)
Other noncurrent liabilities(18)(698)
Net cash used in operating activities(20,523)(30,834)
Cash flows from investing activities
Purchase of property and equipment(6)(403)
Production of equipment for lease to customers(1)(135)
Proceeds from maturity of available-for-sale investments3,500 21,500 
Net cash provided by investing activities
3,493 20,962 
Cash flows from financing activities
Proceeds from ATM offering, net of issuance costs 10,458 
Proceeds from revolver facility 5,000 
Repayment of equipment loans (734)
Issuance of common stock upon exercise of stock options285 310 
Net cash provided by financing activities
285 15,034 
Effect of exchange rate changes on cash and cash equivalents5 (6)
Net change in cash and cash equivalents(16,740)5,156 
Cash and cash equivalents and restricted cash at beginning of period25,294 32,783 
Cash and cash equivalents and restricted cash at end of period$8,554 $37,939 
Supplemental disclosure of cash flow information
Cash paid for interest$556 $220 
Supplemental disclosure of non-cash information
Unpaid liabilities related to property and equipment(59)(16)
Equipment for lease to customers returned to inventory912  

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The following table provides a reconciliation of cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows:
March 31,
20242023
(In thousands)
Cash and cash equivalents$7,754 $37,139 
Restricted cash (Other assets)800 800 
Total cash and cash equivalents and restricted cash$8,554 $37,939 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Velo3D, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(In thousands, except share data)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ Equity
SharesAmount
Balance as of December 31, 2022187,561,368 $2 $361,528 $(837)$(221,898)$138,795 
Issuance of common stock upon exercise of stock options and release of restricted stock units1,585,950 — 310 — — 310 
Stock-based compensation— — 6,236 — — 6,236 
Issuance of common stock warrants in connection with financing3,332,479 — 10,458 — — 10,458 
Net loss— — — — (36,325)(36,325)
Other comprehensive loss— — — 288 — 288 
Balance as of March 31, 2023
192,479,797 $2 $378,532 $(549)$(258,223)$119,762 
Balance as of December 31, 2023258,418,695 $2 $425,471 $(96)$(357,037)$68,340 
Issuance of common stock upon exercise of stock options and release of restricted stock units3,285,894 — 285 — — 285 
Stock-based compensation— — 5,087 — — 5,087 
Net loss— — — — (28,314)(28,314)
Other comprehensive income— — — 52 — 52 
Balance as of March 31, 2024
261,704,589 $2 $430,843 $(44)$(385,351)$45,450 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Description of Business and Basis of Presentation
Velo3D, Inc., a Delaware corporation (“Velo3D” ), formerly known as JAWS Spitfire Acquisition Corporation (“JAWS Spitfire”), produces metal additive three dimensional printers (“3D Printers”) which enable the production of components for space rockets, jet engines, fuel delivery systems and other high value metal parts, which it sells or leases to customers for use in their businesses. The Company also provides support services (“Support Services”) for an incremental fee.
Velo3D’s subsidiaries are Velo3D US, Inc., (formerly known as Velo3D, Inc. (“Legacy Velo3D”), founded in June 2014 as a Delaware corporation headquartered in Campbell, California), Velo3D, B.V., (a sales and marketing office located in the Netherlands) and Velo3D, GmbH, (a sales and marketing office located in Germany). The first commercially developed 3D Printer was delivered in the fourth quarter of 2018.
On September 29, 2021 (the “Closing Date” or the “Reverse Recapitalization Date”), JAWS Spitfire completed the previously announced merger with Legacy Velo3D, with Legacy Velo3D surviving as a wholly-owned subsidiary of JAWS Spitfire (the “Merger” or the “Reverse Recapitalization”). In connection with the Merger, JAWS Spitfire was renamed “Velo3D, Inc.”, and Legacy Velo3D was renamed “Velo3D US, Inc.”
The shares and Net loss per share attributable to common stockholders, basic and diluted, prior to the Merger, have been retroactively restated as shares reflecting the exchange ratio (the “Exchange Ratio”) established in the Merger (0.8149 shares of Velo3D common stock for 1 share of Legacy Velo3D common stock, par value $0.00001 (the “Common Stock”)). All fractional shares were rounded.
Unless otherwise stated herein or unless the context otherwise requires, references in these notes to the “Company” refer to (i) Legacy Velo3D prior to the consummation of the Merger; and (ii) Velo3D and its consolidated subsidiaries following the consummation of the Merger.
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial reporting. Intercompany balances and transactions have been eliminated in consolidation. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) and the related notes, which provide a more complete discussion of the Company’s accounting policies and certain other information. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements of the Company. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2024, or for any other interim period or for any other future year.
Revision of Previously Issued Condensed Consolidated Financial Statements
During the fourth quarter of 2023, the Company identified a formula error and an incorrect hourly rate used in its calculation of variable consideration and the calculation of sales type leases related to revenue for the year ended
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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
December 31, 2022. The Company concluded that the errors were not material, either individually or in the aggregate, to its previously issued consolidated financial statements. Additionally, the Company has revised its previously issued interim condensed consolidated financial statements for the period ended March 31, 2023. Refer to Note 16 for further discussion on the revision of the previously issued condensed consolidated financial statements.
Notice of Delisting
On December 28, 2023, the Company received written notice (the “Notice”) from the New York Stock Exchange (“NYSE”) that the Company was not in compliance criteria pursuant to the continued listing standards set forth in Section 802.01C of the NYSE Listed Company Manual because the average closing price of the Common Stock was less than $1.00 per share over a consecutive 30 trading-day period (the “Minimum Share Price Requirement”).
Pursuant to Section 802.01C of the NYSE Listed Company Manual, the Company will have until June 28, 2024 to regain compliance with the Minimum Share Price Requirement.
The Notice has no immediate impact on the listing of the Common Stock, which will continue to be listed and traded on the NYSE during the applicable cure period, subject to the Company’s compliance with the other continued listing requirements of the NYSE and will not affect the ongoing business operations of the Company or its reporting requirements with the Securities and Exchange Commission. However, failure to satisfy the conditions of the cure period or to maintain other NYSE listing requirements could lead to a delisting.
Going Concern, Financial Condition and Liquidity and Capital Resources
The unaudited condensed consolidated financial statements have been prepared on the basis of continuity of operations, the realization of assets and satisfaction of liabilities in the ordinary course of business. The Company has incurred losses from operations and negative cash flows from operations in every year since inception and expects this to continue for the foreseeable future. As of March 31, 2024, the Company had an accumulated deficit of $385.4 million and cash and investments on hand of approximately $10.9 million.
Management believes that there is a substantial doubt concerning the Company’s ability to continue as a going concern. As of the date of the issuance of these financial statements, the Company does not have sufficient liquidity to meet its operating needs and satisfy its obligations for at least 12 months from the date of issuance of the unaudited condensed consolidated financial statements.
On April 1, 2024, the Company entered into a second note amendment (the “Second Note Amendment”) to its Secured Notes (as defined below) held with the Investors (as defined below). Pursuant to the Second Note Amendment, the Company agreed and made a cash payment of $5.5 million on April 1, 2024 to redeem approximately $4.2 million of aggregate principal amount of the Notes, together with accrued and unpaid interest, and a cash payment of $5.5 million on April 15, 2024 to repay approximately $4.6 million of principal of the Notes, together with accrued and unpaid interest. In connection with the Second Note Amendment, the Company issued to the Investors warrants to purchase 21,949,079 shares of the Company’s common stock that become exercisable 45 days after the original issuance date at an exercise price of $0.4556 per share. The Investors may exercise the Warrants by paying the exercise in cash or by reducing the outstanding principal amount under the Notes by an amount equal to the quotient of (A) the amount of the exercise price divided by (B) 1.20.
On April 10, 2024, the Company sold (such sale and issuance, the “Offering”) an aggregate of: (i) 34,285,715 shares of common stock and (ii) immediately exercisable warrants to purchase up to 34,285,715 shares of common stock at $0.35 per share. The offering price per share of common stock and accompanying warrant was $0.35 and resulted in gross proceeds to the Company of approximately $12 million. The Company intends to use the net proceeds from the Offering primarily for funding working capital and capital expenditures and other general corporate purposes, including repayment of the Company’s Secured Notes. As of May 9, 2024, the Company had approximately $11.1 million in accounts receivable and $5.7 million in cash and investments.
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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
See Note 17, Subsequent Events for further information regarding the Second Note Amendment and the Offering.
Further, the Company expects that it will need to engage in additional financings to fund its operations and satisfy its obligations in the near-term, through at-the-market sales under the ATM Agreement or other financings. The Company is in discussions with multiple financing sources to attempt to secure additional financing. There are no assurances that the Company will be able to obtain financing on acceptable terms, or at all, to provide the necessary interim funding to continue its operations and satisfy its obligations for at least 12 months from the date of issuance of the unaudited condensed consolidated financial statements.
In December 2023, the Board of Directors commenced a strategic business review process to explore alternatives in order to maximize stockholder value. Potential strategic alternatives actively being explored or evaluated currently include a potential merger, business combination or sale. There can be no assurance that the Company’s strategic review process will result in any transaction or other strategic outcome on acceptable terms, or at all, to provide the necessary funding to continue its operations and satisfy its obligations and if not, the Company may be required to sell assets, liquidate and/or file for bankruptcy. The Company's strategic review remains ongoing, with the Board of Directors in discussions with multiple parties.
The Company’s operational priorities include reliability improvements and system uptime for the products previously sold to its key customers. If the Company is unable to maintain system reliability and uptime consistent with the expectations of key customers the Company will not be able to collect outstanding receivables, which a significant portion are currently past due with customers, or variable consideration contingent on the future usage of 3D Printer systems and it will not be able to collect on contractual amounts owed which are contingent upon successful completion of site acceptance tests.
Note 2. Summary of Significant Accounting Policies
For a detailed discussion about the Company’s significant accounting policies and for further information on significant accounting updates adopted in the prior year, see Note 2, Summary of Significant Accounting Policies, to the audited consolidated financial statements in the 2023 Form 10-K. During the three months ended March 31, 2024, there were no significant updates to the Company’s significant accounting policies other than as described below.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. Two primary enhancements related to this ASU include disaggregating existing income tax disclosures relating to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on the Company's condensed consolidated financial statements and related disclosures.
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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 3. Basic and Diluted Net Loss per Share
The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders:
Three Months Ended
March 31,
20242023
(In thousands, except share and per share data)
Numerator:
Net loss
$(28,314)$(36,325)
Denominator:
Weighted average shares outstanding–basic and diluted
260,294,161 189,609,021 
Net loss per share–basic and diluted
$(0.11)$(0.19)
The following potentially dilutive shares of common stock equivalents “on an as-converted basis” were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an antidilutive effect:
Three Months Ended
March 31,
20242023
Common stock options11,394,757 15,388,946 
Common stock warrants50,945,000 13,145,000 
Restricted stock units18,260,514 12,455,651 
Total potentially dilutive common share equivalents80,600,271 40,989,597 
Total potentially dilutive common share equivalents for the three months ended March 31, 2024 and 2023 excludes 21,265,936 and 21,758,148, respectively, shares related to the earnout liability as these shares are contingently issuable upon meeting certain triggering events.

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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 4. Fair Value Measurements
The Company’s assets and liabilities that were measured at fair value on a recurring basis were as follows:
Fair Value Measured as of March 31, 2024
Level 1Level 2Level 3Total
(In thousands)
Assets
Money market funds (i)$6,732 $ $ $6,732 
Corporate bonds (ii) 3,151  3,151 
Total financial assets$6,732 $3,151 $ $9,883 
Liabilities
Common stock warrant liabilities (Public Warrants) (iii)
$489 $ $ $489 
Common stock warrant liabilities (Private Placement Warrants) (iii)
  241 241 
Common stock warrant liabilities (2022 Private Warrant) (iii)  28 28 
Common stock warrant liabilities (RDO Warrants) (iii)  13,053 13,053 
Common stock warrant liabilities (Placement Agent Warrants) (iii)
  644 644 
Contingent earnout liabilities  1,893 1,893 
Total financial liabilities$489 $ $15,859 $16,348 
Fair Value Measured as of December 31, 2023
Level 1Level 2Level 3Total
(In thousands)
Assets
Money market funds (i)$3,422 $ $ $3,422 
Corporate bonds (ii) 6,621  6,621 
Total financial assets$3,422 $6,621 $ $10,043 
Liabilities
Common stock warrant liabilities (Public Warrants) (iii)
$258 $ $ $258 
Common stock warrant liabilities (Private Placement Warrants) (iii)
  127 127 
Common stock warrant liabilities (2022 Private Warrant) (iii)  23 23 
Common stock warrant liabilities (RDO Warrants) (iii)  10,891 10,891 
Common stock warrant liabilities (Placement Agent Warrants) (iii)
  536 536 
Contingent earnout liabilities  1,456 1,456 
Total financial liabilities$258 $ $13,033 $13,291 
(i)     Included in cash and cash equivalents on the condensed consolidated balance sheets.
(ii)     Included in short-term investments on the condensed consolidated balance sheets.
(iii)    Included in warrant liabilities on the condensed consolidated balance sheets.
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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
For more information regarding the Public Warrants, Private Placement Warrants, the 2022 Private Warrant, the RDO Warrants, the Placement Agent Warrants, and the Contingent earnout liabilities, see Note 10, Equity Instruments.
The aggregate fair value of the Company’s money market funds approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds as of March 31, 2024 and December 31, 2023. Realized gains and losses, net of tax, were not material for any of the periods presented.
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments:
Private placement warrant liabilities2022 Private WarrantContingent earnout liabilitiesRDO WarrantsPlacement Agent Warrants
(In thousands)
Fair value as of January 1, 2024$127 $23 $1,456 $10,891 $536 
Change in fair value114 5 437 2,162 108 
Fair value as of March 31, 2024$241 $28 $1,893 $13,053 $644 
Private placement warrant liabilities2022 Private WarrantContingent earnout liabilitiesRDO WarrantsPlacement Agent Warrants
(In thousands)
Fair value as of January 1, 2023888 109 17,414   
Change in fair value869 37 9,653   
Fair value as of March 31, 2023$1,757 $146 $27,067 $ $ 
The fair value of the private placement warrant liability, the 2022 Private Warrant, Contingent earnout liability, RDO Warrants, and Placement Agent Warrants are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.
In determining the fair value of the Private Placement Warrant liability, Contingent earnout liability, and Debt derivatives, the Company used the Monte Carlo simulation model using a distribution of potential outcomes on a weekly basis over the applicable periods that assumes optimal exercise of the Company’s redemption option at the earliest possible date (see Note 10, Equity Instruments).
In determining the fair value of the 2022 Private Warrant, RDO Warrants, and Placement Agent Warrants, the Company used the Black-Scholes option pricing model to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate and dividend yield (see Note 10, Equity Instruments).


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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 5. Investments
Available-for-sale Investments
The following table summarizes the Company’s available-for-sale (“AFS”) investments. These are classified as “Short-term investments” on the condensed consolidated balance sheets.
March 31, 2024
Amortized CostGross Unrealized GainGross Unrealized LossFair Value
(In thousands)
Corporate bonds$3,195 $ $(44)$3,151 
Total available-for-sale investments$3,195 $ $(44)$3,151 
December 31, 2023
Amortized CostGross Unrealized GainGross Unrealized LossFair Value
(In thousands)
Corporate bonds$6,717 $ $(96)$6,621 
Total available-for-sale investments$6,717 $ $(96)$6,621 
The following table presents the breakdown of the AFS investments in an unrealized loss position as of March 31, 2024 and December 31, 2023, respectively.
March 31, 2024
December 31, 2023
Fair ValueGross Unrealized LossFair ValueGross Unrealized Loss
(In thousands)
Corporate bonds
Less than 12 months$ $ $ $ 
12 months or longer3,151 (44)6,621 (96)
Total$3,151 $(44)$6,621 $(96)
There were no material realized gains or losses on AFS investments during the three months ended March 31, 2024 and March 31, 2023.

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Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
All remaining contractual maturities of AFS investments held at March 31, 2024 are as follows:
Less than 12 monthsGreater than 12 months
Fair valueGross unrealized lossesFair valueGross unrealized losses
(In thousands)
Corporate bonds$3,151 $(44)$ $ 
Total$3,151 $(44)$ $ 
Actual maturities may differ from the contractual maturities because the Company may sell these investments prior to their contractual maturities.
Note 6. Balance Sheet Components
Accounts Receivable, Net
Accounts receivable, net consisted of the following:
March 31,December 31,
20242023
(In thousands)
Trade receivables$12,376 $10,203 
Less: Allowances for credit losses(723)(620)
Total$11,653 $9,583 
Inventories
Inventories consisted of the following:
March 31,December 31,
20242023
(In thousands)
Raw materials$45,634 $48,488 
Work-in-progress15,486 9,922 
Finished goods1,679 2,406 
Total$62,799 $60,816 
15


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
March 31,December 31,
20242023
(In thousands)
Prepaid insurance and other$2,922 $2,738 
Vendor prepayments160 1,262 
Total$3,082 $4,000 
Property and Equipment, Net
Property and equipment, net consisted of the following:
March 31,December 31,
20242023
(In thousands)
Computers and software$2,526 $2,549 
Lab equipment and other equipment8,019 8,075 
Furniture and fixtures206 206 
Leasehold improvements14,471 14,406 
Total property, plant and equipment25,222 25,236 
Less accumulated depreciation and amortization(9,969)(8,910)
Property, plant and equipment, net$15,253 $16,326 
Depreciation expense for the three months ended March 31, 2024 and 2023 was $1.1 million and $1.2 million, respectively.
The manufacturing facility operating lease at Campbell (McGlincy) was terminated on March 31, 2023, and is no longer in use. There were no significant asset retirement obligations for McGlincy. The Company’s right-of-use assets and lease liabilities related to McGlincy were amortized in full over the life of the lease. Additionally, the Company exited from its two facilities at Campbell (Division) on December 31, 2023, which are no longer in use, however the lease agreement was not terminated.
Other Assets
Other assets consisted of the following:
March 31,December 31,
20242023
(In thousands)
Right of use assets$10,237 $10,672 
Non-current contract assets
4,839 5,117 
Non-current prepaid expenses and other assets1,992 1,993 
Total Other assets$17,068 $17,782 
Certain balances included in contract assets for prior periods have been reclassified to conform to the current period presentation.
16


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
March 31,December 31,
20242023
(In thousands)
Accrued expenses$1,862 $1,948 
Accrued salaries and benefits2,263 2,277 
Lease liability – current portion2,119 2,266 
Total Accrued expenses and other current liabilities$6,244 $6,491 
Other Noncurrent Liabilities
Other noncurrent liabilities consisted of the following:
March 31,December 31,
20242023
(In thousands)
Lease liabilities – noncurrent portion$9,779 $10,176 
Other noncurrent liabilities1,710 1,380 
Total other noncurrent liabilities$11,489 $11,556 
Note 7. Equipment on Lease, Net
The equipment leased to customers had a cost basis of $6.2 million and accumulated depreciation of $0.7 million as of March 31, 2024. The equipment leased to customers had a cost basis of $7.4 million and accumulated depreciation of $0.8 million as of December 31, 2023.
The total depreciation expense was $0.3 million and $0.3 million included in cost of revenue for the three months ended March 31, 2024 and 2023, respectively.
Lease payments from customers consisted of the following:
Three Months Ended March 31,
20242023
(In thousands)
Equipment on lease payments$470 $575 
Equipment on lease variable payments  
Total lease payments$470 $575 
Note 8. Leases
The Company leases its office and manufacturing facilities under four non-cancellable operating leases, including options to extend, which expire between 2024 to 2032. The agreements include a provision for renewal at the then prevailing market rate for terms specified in each lease.
As noted above in Note 6, Balance Sheet Components, the manufacturing facility operating lease at Campbell (McGlincy) was terminated on March 31, 2023, and is no longer in use. The Company’s right-of-use assets and lease liabilities related to McGlincy were amortized in full over the life of the lease. Additionally, the Company
17


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
exited from its two facilities at Campbell (Division) on December 31, 2023, which are no longer in use, however the lease agreement has not been terminated as of March 31, 2024.
Total right-of-use (“ROU”) assets and lease liabilities are as follows:
March 31,December 31,
20242023
(In thousands)
Right-of-use assets:
Net book value (Other assets)$10,237 $10,672 
Operating lease liabilities:
Current (Accrued expense and other current liabilities)$1,986 $2,153 
Noncurrent (Other noncurrent liabilities)9,558 9,973 
11,544 12,126 
Financing lease liabilities:
Current (Accrued expense and other current liabilities)$133 $113 
Noncurrent (Other noncurrent liabilities)221 203 
$354 $316 
Total lease liabilities$11,898 $12,442 
There were no impairments recorded related to these assets as of March 31, 2024 and December 31, 2023.
Information about lease-related balances were as follows:
Three Months Ended
March 31,
20242023
(In thousands, except years and percentages)
Operating lease expense$733$764
Financing lease expense499
Short-term lease expense6884
Total lease expense$850$857
Cash paid for leases$746$706
Weighted – average remaining lease term – operating leases (years)7.63.8
Weighted – average discount rate – operating leases8.9%8.7%

18


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Maturity of operating lease liabilities as of March 31, 2024 are as follows:
(In thousands)
Remainder of 2024
$2,091 
20252,390 
20262,430 
20272,400 
2028
2,490 
Thereafter8,779 
Total operating lease payments$20,580 
Less portion representing imputed interest(9,036)
Total operating lease liabilities$11,544 
Less current portion1,986 
Long-term portion$9,558 
Note 9. Long-Term Debt
Long-term debt consisted of the following:
March 31,December 31,
20242023
(In thousands)
Secured notes$36,791 $33,516 
Deferred financing costs(488)(384)
Total$36,303 $33,132 
Debt – current portion34,300 21,191 
Long-term debt – less current portion$2,003 $11,941 
The Company’s debt consists of Secured Notes entered into with High Trail Investments ON LLC and an affiliated institutional investor (together, the "Investors"). The Secured Notes contain customary affirmative and negative covenants (including covenants that limit the Company’s ability to incur debt, make investments, transfer assets, engage in certain transactions with affiliates and merge with other companies). For a full description of the debt arrangement, see Note 9, Long-Term Debt, in the audited consolidated financial statements included in the 2023 Form 10-K.
On April 1, 2024, the Company entered into the Second Note Amendment, to its Secured Notes with the Investors. For further information on the Second Note Amendment, see Note 17, Subsequent Events.
Secured Notes
The Secured Notes bear interest at 6.00% per annum, payable quarterly in cash on January 1, April 1, July 1 and October 1 of each year, commencing on January 1, 2024, and will mature on August 1, 2026. When the Company repays principal on the Secured Notes pursuant to the terms of the Secured Notes, it will be required to pay 120% of the principal amount repaid (the “Repayment Price”) plus accrued and unpaid interest.
On the first day of each three-month period beginning on April 1, 2024 (a “Partial Redemption Date”), the Company will redeem a portion of the principal amount of the Secured Notes at the Repayment Price plus accrued and unpaid interest, unless the Investors cancel such redemption. The aggregate principal amount of the Secured
19


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Notes that will be redeemable on a Partial Redemption Date will be $8,750,000 for a Repayment Price of $10,500,000.
The Secured Notes include terms that provide the Investors seniority over other unsecured obligations in any settlement negotiations in the event of liquidation. Additionally, the Secured Notes contain redemption features in the event of default or a fundamental change in control that would make the Secured Notes immediately callable at a predetermined rate as described in the Secured Notes. The redemption features are settled in cash. As of March 31, 2024, the Company has not included the effect of an event of default or the effect of a fundamental change in control in the valuation of the Secured Notes, as the Company believes the likelihood of these occurring to be remote. The Company will continue to monitor the likelihood of these events in future reporting periods.
The Company incurred deferred financing costs of $0.4 million related to the Secured Notes, which were capitalized upon issuance and are being accreted over the term of the Secured Notes using the effective interest rate method with $0.1 million amortized to interest expense for the three months ended March 31, 2024. As of March 31, 2024, the remaining unamortized balance of deferred financing costs was $0.3 million and were included in Debt — current portion on the balance sheets.
Additionally, the Company is accreting discounts of $11.5 million and capitalizing to the carrying value of the Secured Notes over the term of the Secured Notes using the effective interest rate method with $3.1 million amortized to interest expense for the three months ended March 31, 2024. As of March 31, 2024, the unamortized discount was $7.2 million, which includes the difference between the principal and the Repayment Price, and capitalized deferred financing costs. For the three months ended March 31, 2024, the Company incurred and paid $0.6 million in interest expense related to the Secured Notes. The effective interest rate was 45.1% for the three months ended March 31, 2024.
The future minimum aggregate payments for the above borrowings are equal to the quarterly payments made using the Repayment Price, are as follows as of March 31, 2024:
(In thousands)
2024$42,000 
20252,000 
$44,000 
Note 10. Equity Instruments
Common stock
The total amount of our authorized share capital consists of 500,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock, par value $0.00001 per share. As of March 31, 2024, we had 261,704,589 shares of common stock outstanding.The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders but are not entitled to cumulative voting rights, are entitled to receive ratably such dividends as may be declared by the Company’s Board of Directors out of funds legally available therefor subject to preferences that may be applicable to any shares of redeemable convertible preferred stock currently outstanding or issued in the future, are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any then outstanding redeemable convertible preferred stock in the event of the Company’s liquidation, dissolution, or winding up, have no preemptive rights and no right to convert their common stock into any other securities, and have no redemption or sinking fund provisions applicable to the common stock.


20


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Common Stock Reserved for Future Issuance
Shares of common stock reserved for future issuance on an “as if converted” basis were as follows:
March 31,December 31,
20242023
(share data)
Common stock warrants50,945,000 50,945,000 
Shares available for future grant under 2021 Equity Incentive Plan29,230,966 16,041,013 
Reserved for At-the-Market offering2,825,941 2,825,941 
Reserved for employee stock purchase plan9,955,400 7,371,214 
Total shares of common stock reserved 92,957,307 77,183,168 
In February 2023, the Company entered into a sales agreement (the "ATM Sales Agreement") with Needham & Company, LLC ("Needham"), as agent, pursuant to which the Company may offer and sell, from time to time through Needham, up to $40.0 million shares of its common stock pursuant to a shelf registration statement on Form S-3 (the "Shelf Registration Statement") and the related prospectus supplement and accompanying base prospectus, and in connection therewith, the Company reserved 20,000,000 shares of common stock for issuance under the ATM Sales Agreement. On January 31, 2024, the Company filed an amendment to the prospectus supplement increasing the aggregate dollar amount of shares available to be sold from time to time pursuant to the ATM Sales Agreement to $75 million. During the three months ended March 31, 2024, the Company sold no shares pursuant to the ATM sales agreement.
Effective January 1, 2024, pursuant to the evergreen provisions of the Company’s 2021 Equity Incentive Plan (the “2021 EIP”), the Company added an additional 12,920,934 shares of common stock for issuance under the 2021 EIP and 2,584,186 shares of common stock for issuance under the 2021 ESPP.
The shares available for future grant under the 2021 EIP are net of any un-exercised stock options (vested and unvested) and unvested restricted stock units (“RSUs”) outstanding that may convert to common stock in the future upon exercise or vesting as of March 31, 2024 and December 31, 2023.
Common Stock Warrant Liabilities
50,945,000 warrants to purchase an equal number of shares of common stock of were exercisable as of March 31, 2024 and December 31, 2023. The Private Placement Warrants, the 2022 Private Warrant, the RDO Warrants, the Placement Agent Warrants, and the Public Warrants to purchase shares of common stock (each as defined below) are liability classified and recorded at fair value on the issue date with periodic remeasurement. Warrants for shares of common stock consisted of the following:
March 31, 2024 and December 31, 2023
Issue DateExpiration
Date
Number of
Warrants
Exercise
Price per warrant
Fair Value on Issue Date per warrant
Private placement warrants - Common Stock12/02/202009/29/20264,450,000 $11.50$2.00
2022 Private Warrant – Common Stock07/25/202207/24/203470,000 $2.56$2.43
Public warrants – Common Stock12/02/202009/29/20268,625,000 $11.50$3.30
RDO Warrants - Common Stock12/29/202312/29/202836,000,000 $0.57$0.30
Placement Agent Warrants - Common Stock12/29/202312/29/20281,800,000 $0.62$0.30
50,945,000 

21


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Warrant Liabilities Fair Value
The issuance of the Private Placement Warrant and Public Warrant liabilities were accounted for as a reverse recapitalization. The 2022 Private Warrant was issued in connection with the Company’s entry into the joinder and fourth loan modification with SVB. See Note 9, Long-Term Debt, in the consolidated financial statements included in the 2023 Form 10-K. The liability for warrants on common stock carried at fair value was as follows:
Fair Value on December 31, 2023
Gain (loss) on fair value of warrants
Fair Value on March 31, 2024
(In thousands)
Private placement warrants – Common Stock$127 $114 $241 
2022 Private Warrant – Common Stock23 5 28 
Public warrants – Common Stock258 231 489 
RDO Warrants - Common Stock10,891 2,162 13,053 
Placement Agent Warrants - Common Stock536 108 644 
$11,835 $2,620 $14,455 
The liabilities associated with the Private Placement Warrants, 2022 Private Warrant, RDO Warrants, and Placement Agent Warrants were subject to remeasurement at each balance sheet date using the Level 3 fair value inputs and the Public Warrants were subject to remeasurement at each balance sheet date using Level 1 fair value inputs for the three months ended March 31, 2024 and March 31, 2023.
Each Private Placement Warrant is exercisable to purchase one share of common stock at a price of $11.50 per share. Subject to certain exceptions, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. The 2022 Private Warrant is exercisable to purchase one share of common stock at a price of $2.56 per share and allows cashless exercise in whole or part. The Public Warrants may only be exercised for a whole number of shares. The Public Warrants became exercisable on December 7, 2021. The RDO Warrants are exercisable to purchase one share of common stock at a price of $0.57 per warrant share. The Placement Agent Warrants are exercisable to purchase one share of common stock at a price of $0.62 per warrant share . The RDO Warrants and Placement Agent Warrants are exercisable until December 29, 2028 and allows cashless exercise in whole or part.
22


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Private Placement Warrant Fair Value Assumptions
The fair value assumptions used in the Monte Carlo simulation model for the recurring valuation of the private placement common stock warrant liability were as follows:
As of March 31, 2024
As of December 31, 2023
Current stock price$0.46 $0.40 
Expected volatility115.0 %105.0 %
Risk-free interest rate4.5 %4.1 %
Dividend rate % %
Expected Term (years)2.502.75
Expected volatility: The volatility is determined iteratively, such that the concluded value of the Public Warrant is equal to the traded price.
Risk-free interest rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the common stock warrants.
Expected dividend yield: The expected dividend rate is zero as the Company currently has no history or expectation of declaring dividends on its common stock.
Expected term: The expected term represents the period that the warrants are expected to be outstanding and is determined using the simplified method, which deems the term to be the average of the time to vesting and the contractual life of the common stock warrants.
2022 Private Warrant, RDO Warrants, Placement Agent Warrants - Fair Value Assumptions
The fair value assumptions used in the Black-Scholes simulation model for the recurring valuation of the 2022 Private Warrant, the RDO Warrants, and the Placement Agent Warrants liabilities were as follows:
As of March 31, 2024
As of December 31, 2023
Current stock price$0.46 $0.40
Expected volatility114.7 %108.3%
Risk-free interest rate4.2% - 5.4%3.8% - 3.9%
Dividend rate %%
Expected Term (years)4.75 - 10.325 - 10.57
Expected volatility: The expected volatility was derived from the implied volatility of the Company’s publicly traded common stock.
Risk-free interest rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the common stock warrants.
Expected dividend yield: The expected dividend rate is zero as the Company currently has no history or expectation of declaring dividends on its common stock.
23


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Expected term: The expected term represents the period that the warrant is expected to be outstanding and is determined using the simplified method, which deems the term to be the average of the time to vesting and the contractual life of the warrant.
Contingent Earnout Liabilities
The contingent earnout liability is for Earnout Shares (as defined below) for pre-closing Legacy Velo3D equity holders (“Eligible Legacy Velo3D Equityholders”). During the time period between September 29, 2021 (the “Closing Date”) and the five-year anniversary of the Closing Date, Eligible Legacy Velo3D Equityholders may receive up to 21,758,148 shares of common stock (the “Earnout Shares”), which is based on two tranches of 10,879,074 per tranche. The Earnout Shares issuable to holders of employee stock options are accounted as stock-based compensation expense as they are subject to forfeiture based on the satisfaction of certain employment conditions. See Note 11, Equity Incentive Plans & Stock Based Compensation, for further discussion.
The rollforward for the contingent earnout liabilities for the three months ended March 31, 2024 and 2023, was as follows:
March 31,
20242023
(In thousands)
Beginning Balance$1,456 $17,414 
Gain on fair value of contingent earnout liabilities$437 $9,653 
Ending Balance$1,893 $27,067 
Fair Value Assumptions Contingent Earnout Liabilities
Assumptions used in the fair value of the contingent earnout liabilities are described below.
As of March 31, 2024
As of December 31, 2023
Current stock price$0.46$0.40
Expected volatility115.0%105.0%
Risk-free interest rate4.5%4.1%
Dividend yield%%
Expected Term (years)2.502.75
Expected volatility: The expected volatility was derived from the implied volatility of the Company’s publicly traded common stock.
Risk-free interest rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the Earnout Shares.
Expected dividend yield: The expected dividend rate is zero as the Company currently has no history or expectation of declaring dividends on its common stock.
Expected term: The expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method, which deems the term to be the average of the time to vesting and the contractual life of the Earnout Shares.
24


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 11. Equity Incentive Plans and Stock-Based Compensation
As of March 31, 2024, the Company had a remaining allocated reserve of 29,230,966 shares of its common stock for issuance under its 2021 Equity Incentive Plan (the “2021 EIP”), which provides for the granting of stock options, restricted stock units (“RSUs”) and stock appreciation rights to employees, directors, and consultants of the Company. As of March 31, 2024, the Company had an allocated reserve of 9,955,400 shares of its common stock for issuance under its 2021 Employee Stock Purchase Plan (“2021 ESPP”). As of March 31, 2024, the Company had not begun any offering periods for the 2021 ESPP.
Stock options
Activity under the 2021 EIP is set forth below:
OptionsWeighted-Average Exercise PriceWeighted-Average Remaining
Contractual Term
in years
(In thousands)(Per share data)(Years)
Outstanding as of December 31, 2022
16,960 $0.54 7.3
Granted $ 
Exercised(1,186)$0.26 
Forfeited or expired(385)$0.63 
Outstanding as of March 31, 2023
15,389 $0.56 7.0
Options vested and expected to vest as of March 31, 2023
15,389 $0.56 
Vested and exercisable as of March 31, 2023
10,800 $0.67 
Outstanding as of December 31, 2023
13,152 $0.61 6.2
Granted $ 
Exercised(1,614)$0.18 
Forfeited or expired(144)$0.81 
Outstanding as of March 31, 2024
11,394 $0.67 5.9
Options vested and expected to vest as of March 31, 2024
11,394 $0.67 
Vested and exercisable as of March 31, 2024
10,897 $0.68 
The aggregate intrinsic value of options outstanding was $2.4 million and $2.3 million, respectively, as of March 31, 2024 and December 31, 2023. Intrinsic value of options exercised for the three months ended March 31, 2024 and 2023 was $0.2 million and $3.5 million, respectively. The total grant date fair value of options vested was $0.1 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively.
As of March 31, 2024, total unrecognized compensation cost related to options was $0.1 million related to 0.5 million unvested options and is expected to be recognized over a weighted-average period of 0.8 years.
For the three months ended March 31, 2024, there were no options granted.
Restricted Stock Units
The fair value of RSUs under the Company’s 2021 EIP is estimated using the value of the Company’s common stock on the date of grant.

25


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes outstanding and expected to vest RSUs as of March 31, 2024 and 2023 and their activity during the three months ended March 31, 2024 and 2023:
Number of SharesWeighted-Average Grant Date Fair ValueAggregate Intrinsic Value
(In thousands)(Per share data)(In thousands)
Balance as of December 31, 2022
9,623 $4.47 $17,225 
Granted4,180 2.11 8,819 
Released(400)5.55 1,300 
Cancelled(948)4.37 2,520 
Balance as of March 31, 2023
12,455 $3.65 $28,274 
Expected to vest as of March 31, 2023
12,455 $3.65 $28,274 
Balance as of December 31, 2023
20,066 $1.94 $7,978 
Granted1,133 0.35 393 
Released(1,668)2.41 444 
Cancelled(1,271)1.92 480 
Balance as of March 31, 2024
18,260 $1.80 $8,319 
Expected to vest as of March 31, 2024
18,260 $1.80 $8,319 
The aggregate intrinsic value of outstanding RSUs is calculated based on the closing price of the Company’s common stock as of the date outstanding. As of March 31, 2024, there was $29.9 million of unrecognized compensation cost related to 18.3 million unvested RSUs, which is expected to be recognized over a weighted average period of approximately 2.9 years. As of March 31, 2023, there was $40.9 million of unrecognized compensation cost related to 12.5 million unvested RSUs, which is expected to be recognized over a weighted average period of approximately 2.9 years.
Earnout Shares–Employees
The Earnout Shares issuable to holders of employee stock options are accounted as stock-based compensation expense as they are subject to forfeiture based on the satisfaction of certain employment conditions. The estimated fair values of the Earnout Shares associated with vested stock options are recognized as an expense and determined by the Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the five-year earnout period. The portion of the Earnout Shares associated with unvested stock options are recognized as an expense and considers the vesting continuing employment requirements.
26


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Stock-based Compensation Expense
The following sets forth the total stock-based compensation expense by type of award included in operating expenses on the statements of operations:
Three Months Ended
March 31,
20242023
(In thousands)
Restricted stock units$3,829 $4,058 
Stock options60 750 
Earnout shares–employees
1,198 1,428 
$5,087 $6,236 
The following sets forth the total stock-based compensation expense for the stock options, RSUs, and earnout shares - employees included in cost of revenue and operating expenses on the statements of operations:
Three Months Ended
March 31,
20242023
(In thousands)
Cost of 3D Printer
$389 $194 
Cost of Support services
195 72 
Research and development1,550 2,803 
Selling and marketing1,054 1,495 
General and administrative1,899 1,672 
$5,087 $6,236 
Note 12. Income Taxes
The income tax provision is calculated for an interim period by distinguishing between elements recognized in the income tax provision through applying an estimated annual effective tax rate (the “ETR”) to a measure of year-to-date operating results referred to as “ordinary income (or loss),” and discretely recognizing specific events referred to as “discrete items” as they occur. The income tax provision or benefit for each interim period is the difference between the year-to-date amount for the current period and the year-to date amount for the period prior. Under ASC 740-270-30-36, entities subject to income taxes in multiple jurisdictions should apply one overall ETR instead of separate ETRs for each jurisdiction when calculating the interim-period income tax or benefit related to ordinary income (or loss) for the year-to-date interim period, except in certain circumstances. The Company’s effective tax rates for the three and three months ended March 31, 2024 and 2023 differ from the federal statutory rate principally as a result of valuation allowances expected to be applied to net operating loss carry-forwards which will not meet the threshold for recognition as deferred tax assets.
Note 13. Commitments and Contingencies
The Company may be involved in various lawsuits, claims, and proceedings, including intellectual property, commercial, securities, and employment matters that arise in the normal course of business. The Company accrues a liability when management believes information available prior to the issuance of the condensed consolidated financial statements indicates it is probable a loss has been incurred as of the date of the condensed consolidated financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Legal costs are expensed as incurred. As of March 31, 2024 , the Company is not aware of any
27


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
litigation, claim or assessment in which the outcome, individually or in the aggregate, would have a material adverse effect on its financial positions, results of operations, cash flows or future earnings.
The Company’s purchase obligations per terms and conditions with suppliers and vendors are cancellable in whole or in part prior to shipment. Non-cancellable purchase commitments (purchase orders) of $21.5 million for parts and assemblies are due upon receipts and will primarily be delivered throughout 2024. If inventory is shipped, the Company will accrue a liability under accrued expenses. The Company has no other commitment and contingencies, except for the operating leases. See Note 8, Leases, for further discussion.
Note 14. Employee Defined-Contribution Plans
The Company has a defined-contribution plan intended to qualify under Section 401 of the Internal Revenue Code (the “401(k) Plan”). The Company contracted with a third-party provider to act as a custodian and trustee, and to process and maintain the records of participant data. Substantially all of the expenses incurred for administering the 401(k) Plan are paid by the Company. Accrued salaries and benefits included accruals related to the 401(k) plans the Company offers to its employees. In order to qualify for these plans, employees must meet the minimum age requirement (21 years) and begin participating on their entry date which is the first paycheck date in the month following the month of eligibility described above. Employee and employer contributions are immediately 100% fully vested. The plans offer employer contributions of 3.0% of an employee’s eligible compensation following safe-harbor rules. The Company’s contribution to the 401(k) plan was $0.3 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively. The Company has paid all matching contributions as of March 31, 2024.
Note 15. Revenue
Customer Concentration
The customer concentration for balances greater than 10% of revenues and 10% of accounts receivables, net, respectively, are presented below:
Total RevenueAccounts Receivable, Net
Three Months Ended March 31,March 31,December 31,
2024202320242023
(as a percentage)
Customer 126.8 %— %<10 %— %
Customer 213.5 %16.6 %<10 %<10 %
Customer 3<10 %17.6 %<10 %<10 %
Customer 4<10 %10.7 %— %— %
Customer 5<10 %10.6 %<10 %<10 %
Customer 6— %10.6 %<10 %<10 %

28


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Revenue by Geographic Area
The Company currently sells its products in the geographic regions as follows:
Three Months Ended March 31,
20242023
(In thousands)
Americas$9,373 $22,163 
Europe325 4,425 
Other88 99 
Total$9,786 $26,687 
Contract Assets and Liabilities
There was $0.9 million of revenue recognized during the three months ended March 31, 2024, included in contract liabilities as of December 31, 2023. The amount of revenue recognized during the three months ended March 31, 2023 included in contract liabilities as of December 31, 2022 was $0.9 million. The change in contract assets reflects the difference in timing between the Company’s satisfaction of remaining performance obligations and the Company’s contractual right to bill its customers. The Company had no material asset impairment charges related to contract assets in the periods presented.
Variable Consideration
The Company estimates its variable consideration on a quarterly basis based on the latest data available, and adjust the transaction price accordingly by recording an adjustment to net revenue and contract assets. The Company has recognized the estimate of variable consideration to the extent that it is probable that a significant reversal will not occur as a result from a change in estimation. There was no revenue related to variable consideration during the three months ended March 31, 2024 and 2023.
Note 16. Revision of Previously Issued Condensed Consolidated Financial Statements
As discussed in Note 1, during the fourth quarter of 2023, the Company identified errors related to revenue, other assets and contract assets which also impacted the interim periods in 2023 as originally presented in the Company’s quarterly reports on Form 10-Q. Additionally, the Company has made adjustments to correct for other previously identified immaterial errors including the classification of stock-based compensation as cost of revenue for the three months ended March 31, 2023. The Company concluded that these errors were not material, either individually or in the aggregate, to its previously issued interim condensed consolidated financial statements. There were no changes to previously issued total cash flows generated from (used by) operating, investing, or financing activities for any of the impacted periods. The Company revised the Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2023 to reflect the corrections of these immaterial errors presented in this Quarterly Report.

29


Velo3D, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The impact of the revision is as follows:
For the Three Months Ended
March 31, 2023
As Previously ReportedAdjustmentAs Revised
Revenue
3D Printer$24,575 $(127)$24,448 
Recurring payment575  575 
Support services1,664  1,664 
Total Revenue26,814 (127)26,687 
Cost of revenue
3D Printer21,974 194 22,168 
Recurring payment447  447 
Support services1,468 72 1,540 
Total cost of revenue23,889 266 24,155 
Gross profit2,925 (393)2,532 
Operating expenses
Research and development10,547 (130)10,417 
Selling and marketing6,174  6,174 
General and administrative10,327 (136)10,191 
Total operating expenses27,048 (266)26,782 
Loss from operations(24,123)(127)(24,250)
Interest expense(220) (220)
Gain (loss) on fair value of warrants(2,553) (2,553)
Gain (loss) on fair value of contingent earnout liabilities(9,653)