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What changed in Velo3D, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Velo3D, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+321 added−351 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-03)

Top changes in Velo3D, Inc.'s 2024 10-K

321 paragraphs added · 351 removed · 249 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

42 edited+6 added−9 removed76 unchanged
Biggest changeOn December 7, 2020, JAWS Spitfire completed its initial public offering. On September 29, 2021, JAWS Spitfire consummated the Merger with Legacy Velo3D pursuant to the Business Combination Agreement. In connection with the Merger, JAWS Spitfire’s jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware, and JAWS Spitfire changed its name to Velo3D, Inc.
Biggest changeCorporate Information We were incorporated on September 11, 2020 as a special purpose acquisition company and a Cayman Islands exempted company under the name JAWS Spitfire Acquisition Corporation. On December 7, 2020, JAWS Spitfire completed its initial public offering. On September 29, 2021, JAWS Spitfire consummated the Merger with Legacy Velo3D pursuant to the Business Combination Agreement.
Our issued patents will expire at different times in the future, with the earliest expiring in 2035 and the latest expiring in 2047. Our currently pending patent applications will generally remain in effect for 20 years from the date of filing of the initial patent application of each.
Our issued patents will expire at different times in the future, with the earliest expiring in 2035 and the latest expiring in 2047. Our currently pending patent applications will generally remain in effect for 20 years from the date of filing of the initial patent application of each.
Specifically, our R&D team is focused on continuing advances in technology that include, but are not limited to: • enhancements of the Sapphire family of systems, such as our 1MZ systems; • improvement of reliability and productivity of the Sapphire family of systems; • expansion of functionality of Flow software; • qualifying new materials; • additional quality control features in Assure; and • addition of recipes for new and for qualified metal alloys.
Specifically, our R&D team is focused on continuing advances in technology that include, but are not limited to: • enhancements of the Sapphire family of systems, such as our 1MZ systems; 14 • improvement of reliability and productivity of the Sapphire family of systems; • expansion of functionality of Flow software; • qualifying new materials; • additional quality control features in Assure; and • addition of recipes for new and for qualified metal alloys.
We typically dedicate one engineer for several weeks around the time of the installation to educate customers as to how to best use our systems and to identify how our technology can most effectively add value to customer processes. After this point, our customers become largely self-supported, requiring only occasional support from our sales and engineering staff.
We typically dedicate one engineer for several weeks around the time of the installation to educate customers as to how to best use our systems and to identify how our 11 technology can most effectively add value to customer processes. After this point, our customers become largely self-supported, requiring only occasional support from our sales and engineering staff.
Certain of these compliance requirements are imposed by our customers, who at times require us to be registered with U.S. health or safety regulatory agencies, whether on the federal or state level. Under environmental laws and regulations, we are required to obtain environmental permits from governmental authorities for certain operations.
Certain of these compliance requirements are imposed by our customers, who at times require us to be registered with U.S. health or safety regulatory agencies, whether on the federal or state level. 17 Under environmental laws and regulations, we are required to obtain environmental permits from governmental authorities for certain operations.
We currently have recipes to print from 14 different metals (e.g., alloys) and add recipes for additional metals based on customer demand. Our team of materials and metallurgy experts qualify new materials on our Sapphire family of printers based on customer requirements and feedback. Flow Developer allows companies to develop parameters for their alloys.
We currently have recipes to print from 14 different metals (e.g., 13 alloys) and add recipes for additional metals based on customer demand. Our team of materials and metallurgy experts qualify new materials on our Sapphire family of printers based on customer requirements and feedback. Flow Developer allows companies to develop parameters for their alloys.
We generally do not compete in the segment of the AM market composed of applications which can be served by the multiple existing competitors in metal AM. Our primary focus 9 is on those applications where demand for our solution is expected to be the strongest, thus supporting our long-term margins.
We generally do not compete in the segment of the AM market composed of applications which can be served by the multiple existing competitors in metal AM. Our primary focus is on those applications where demand for our solution is expected to be the strongest, thus supporting our long-term margins.
Government Regulations We are subject to various laws, regulations and permitting requirements of U.S. federal, state and local and foreign authorities. These include: • regulations promulgated by environmental and health agencies, as described below under “- Environmental Matters ”; • the U.S. Occupational Safety and Health Administration; 16 • the U.S. Foreign Corrupt Practices Act, the U.K.
Government Regulations We are subject to various laws, regulations and permitting requirements of U.S. federal, state and local and foreign authorities. These include: • regulations promulgated by environmental and health agencies, as described below under “- Environmental Matters ”; • the U.S. Occupational Safety and Health Administration; • the U.S. Foreign Corrupt Practices Act, the U.K.
However, the 1MZ printers are larger having a 1000 millimeter (one meter) height build 12 module as compared to the 400 millimeter and 550 millimeter height build module for Sapphire and Sapphire XC, respectively.
However, the 1MZ printers are larger having a 1000 millimeter (one meter) height build module as compared to the 400 millimeter and 550 millimeter height build module for Sapphire and Sapphire XC, respectively.
We make available free of charge, on or through our Investor Relations webpage, our proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC We use our investor relations website, our Twitter handle ( www.twitter.com/VELO3DMetal ), LinkedIn profile ( www.linkedin.com/company/velo3d) and YouTube (@Velo3d) as a means of disseminating or providing notification of, among other things, news or announcements regarding our business or financial performance, investor events, press releases, and earnings releases and as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
We make available free of charge, on or through our Investor Relations webpage, our proxy statements on Schedule 14A, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC We use our investor relations website, our X handle ( www.X.com/VELO3DMetal ), LinkedIn profile ( www.linkedin.com/company/velo3d) and YouTube (@Velo3d) as a means of disseminating or providing notification of, among other things, news or announcements regarding our business or financial performance, investor events, press releases, and earnings releases and as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
Our intellectual property is subject to a first lien security interest held by the holders of our senior secured notes due 2026, as amended (the “ Secured Notes ”). Capital efficient business model We have an asset-light business model, which will allow us to scale our operations to meet expected customer demand.
Our intellectual property is subject to a first lien security interest held by the Holder of our senior secured notes due 2026, as amended (the “ Secured Notes ”). Capital efficient business model We have an asset-light business model, which will allow us to scale our operations to meet expected customer demand.
At the end of 2022, we launched our Sapphire XC 1MZ system, and at the end of 2021, we launched our Sapphire XC system, both of which enable production of larger parts at a lower cost. 11 Our software is fully integrated into the design, production and quality control platform with our Sapphire family of systems.
At the end of 2022, we launched our Sapphire XC 1MZ system, and at the end of 2021, we launched our Sapphire XC system, both of which enable production of larger parts at a lower cost. 12 Our software is fully integrated into the design, production and quality control platform with our Sapphire family of systems.
We believe our technology is years ahead of competitors. 7 Our technology is novel compared to other AM technologies based on its ability to deliver high-value metal parts that have complex internal channels, structures, and geometries.
We believe our technology is years ahead of competitors. 8 Our technology is novel compared to other AM technologies based on its ability to deliver high-value metal parts that have complex internal channels, structures, and geometries.
We remain committed to its “land-and-expand” strategy, whereby satisfied customers continue to purchase Sapphire printers due to the significant capabilities the technology provides to operations, product, and engineering teams.
We remain committed to our “land-and-expand” strategy, whereby satisfied customers continue to purchase Sapphire printers due to the significant capabilities the technology provides to operations, product, and engineering teams.
Human Capital Resources We have a strong team of employees who contribute to our success. As of December 31, 2023 and 2022, we had 237 and 294, respectively, full-time employees, the majority of them based at our headquarters and manufacturing 15 facility in Fremont, California.
Human Capital Resources We have a strong team of employees who contribute to our success. As of December 31, 2024 and 2023, we had 105 and 237 full-time employees, respectively, the majority of them based at our headquarters and manufacturing facility in Fremont, California.
We rely on our own sales team, as well as multiple distribution partners, including Taiyo Nippon Sanso (Japan), Avaco (South Korea), and GoEngineer (North America). These relationships have helped to extend our reach into overseas markets and essentially function as extensions of our sales team.
We rely on our own sales team, as well as multiple distribution partners, including Taiyo Nippon Sanso (Japan), Avaco (South Korea), and SBO (Austria). These relationships have helped to extend our reach into overseas markets and essentially function as extensions of our sales team.
We have historically invested a significant amount of our resources in R&D because we believe that superior technology is a key to maintaining a leading market position. In the year ended December 31, 2023 and 2022, our R&D expenses were approximately $42.0 million and $46.3 million.
We have historically invested a significant amount of our resources in R&D because we believe that superior technology is a key to maintaining a leading market position. In the year ended December 31, 2024 and 2023, our R&D expenses were approximately $17.1 million and $42.0 million, respectively.
We review our compensation and benefit policies and programs regularly through industry benchmarks. We believe we offer competitive benefits and total compensation packages, of which the principal purposes are to attract, retain and motivate our employees. Competition We compete with other suppliers of 3D printers, materials and software, as well as with suppliers of traditional metal manufacturing solutions.
We believe we offer competitive benefits and total compensation packages, of which the principal purposes are to attract, retain and motivate our employees. Competition We compete with other suppliers of 3D printers, materials and software, as well as with suppliers of traditional metal manufacturing solutions.
Our eight trademark types worldwide include four registered U.S. trademarks, 40 registered foreign trademarks, two pending U.S. trademark applications, and 13 pending foreign trademark applications. We also have one U.S. registered copyright.
Our eight trademark types worldwide include six registered U.S. trademarks, 45 registered foreign trademarks, two pending U.S. trademark applications, and six pending foreign trademark applications. We also have one U.S. registered copyright.
Our eight trademark types worldwide include four registered U.S. trademarks, 40 registered foreign trademarks, two pending U.S. trademark applications, and 13 pending foreign trademark applications. We also have one U.S. registered copyright. Our intellectual property is subject to a first lien security interest held by the holders of the Secured Notes.
Our trademarks include six registered U.S. trademarks, 45 registered foreign trademarks, two pending U.S. trademark applications, and six pending foreign trademark applications. We also have one U.S. registered copyright. Our intellectual property is subject to a first lien security interest held by the Holder of the Secured Notes.
Securities and Exchange Commission (the " SEC "). Our website is www.velo3d.com and our Investor Relations webpage is ir.velo3d.com . The SEC maintains a website, www.sec.gov, that contains annual, quarterly and current reports, proxy and information statements and other information that issuers file electronically with the SEC. Our electronic SEC filings are available to the public at the SEC’s website.
The SEC maintains a website, www.sec.gov, that contains annual, quarterly and current reports, proxy and information statements and other information that issuers file electronically with the SEC. Our electronic SEC filings are available to the public at the SEC’s website.
Strategic Review In December 2023, we announced that our Board of Directors had commenced a strategic business review process to explore alternatives in order to maximize stockholder value. Potential strategic alternatives to be explored or evaluated may include, but are not limited to, a strategic transaction, potential merger, business combination or sale.
Strategic Review In December 2023, we announced that our Board of Directors had commenced a strategic business review process to explore alternatives in order to maximize stockholder value.The potential strategic alternatives explored or evaluated by our Board of Directors included a potential merger, business combination or sale.
We rely on consultants and outside contractors in roles and responsibilities that include engineering, operations and finance. To date, we have not experienced any work stoppages and consider our relationship with our employees to be in good standing. None of our employees are subject to a collective bargaining agreement or are represented by a labor union.
We rely on consultants and outside contractors in roles and responsibilities that include engineering, operations and finance. To date, we have not experienced any work stoppages and consider our relationship with our employees to be in good standing.
As of March 26, 2024, our sales team has secured approximately $15 million in new order bookings since mid-December 2023, including more than 50% of bookings tied to key strategic accounts, which we believe demonstrates increased customer satisfaction and confidence in our technology.
As of March 26, 2024, our sales team has secured approximately $15 million in new order bookings since mid-December 2023, including more than 50% of bookings tied to key strategic accounts, which we believe demonstrates increased customer satisfaction and confidence in our technology. 10 Accelerate global acquisition of new customers We plan to increase the number of customer relationships we have globally in the coming years both organically and through distribution partnerships.
Our address is 2710 Lakeview Court, Fremont, CA 94538. Our telephone number is (408) 610-3915. Our website address is https://www.velo3d.com. Information contained on our website or connected thereto does not constitute part of, and is not incorporated by reference into, this Annual Report. Available Information We file annual, quarterly and current reports, proxy statements and other information with the U.S.
Information contained on our website or connected thereto does not constitute part of, and is not incorporated by reference into, this Annual Report. Available Information We file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the " SEC "). Our website is www.velo3d.com and our Investor Relations webpage is ir.velo3d.com .
These factors create an uncontested segment in the market with customers we are ideally positioned to serve. 10 Existing relationships with blue chip customers across our target end markets We have built relationships with blue chip customers across all of our target industries, including space, aviation and defense, automotive, energy and other industrial applications.
Existing relationships with blue chip customers across our target end markets We have built relationships with blue chip customers across all of our target industries, including space, aviation and defense, automotive, energy and other industrial applications.
Finally, our solutions enable the production of high-value, low-volume spare parts on demand, which may result in meaningful reductions to requirements for inventory.
Finally, our solutions enable the production of high-value, low-volume spare parts on demand, which may result in meaningful reductions to requirements for inventory. These factors create an uncontested segment in the market with customers we are ideally positioned to serve.
Recurring payment transactions are our leased 3D printer transactions. Under the leased 3D printer transaction, the customer typically pays an amount for a lease which entitles the customer to a base number of hours of usage. For usage above that level, the customer typically pays an hourly usage fee.
Under the leased 3D printer transaction, the customer typically pays an amount for a lease which entitles the customer to a base number of hours of usage. For usage above that level, the customer typically pays an hourly usage fee. Most of our leases have a 12-month term, though in certain cases the lease term is longer.
Accelerate global acquisition of new customers We plan to increase the number of customer relationships we have globally in the coming years both organically and through distribution partnerships. In recent years, we have demonstrated that our technology can bring tremendous value across a number of use cases in the space, aviation and defense, automotive, energy and industrial segments.
In recent years, we have demonstrated that our technology can bring tremendous value across a number of use cases in the space, aviation and defense, automotive, energy and industrial segments.
In addition to our U.S. and European sales organization, we have also established relationships with distribution partners in the Asia-Pacific region (Taiyo Nippon Sanso Corporation, and Avaco) and in the U.S. (GoEngineer and HarTech Group) and sales agents in the Middle East to provide greater leverage to our sales team and enable expansion into new markets.
In addition to our U.S. and European sales organization, we have also established relationships with distribution partners in the Asia-Pacific region (Taiyo Nippon Sanso Corporation, and Avaco) and Austria (SBO).
Toxic Substances Control Act, Registration, Evaluation, Authorisation and Restriction of Chemicals (“ REACH ”), the Restriction of Hazardous Substances Directive (“ RoHS ”) and Classification, Labelling and Packaging Regulation (“ CLP ”) in the EU.
Toxic Substances Control Act, Registration, Evaluation, Authorization and Restriction of Chemicals (“ REACH ”), the Restriction of Hazardous Substances Directive (“ RoHS ”) and Classification, Labelling and Packaging Regulation (“ CLP ”) in the EU. These and similar laws and regulations require, among others, the registration, evaluation, authorization and labeling of certain chemicals that we use and ship.
We shipped our first Sapphire XC 1MZ system at the end of 2022, one year after the Sapphire XC launch at the end of 2021, and we shipped our first Sapphire system at the end of 2018.
The variable payments are recognized when the event determining the amount of variable consideration to be paid occurs. 9 We shipped our first Sapphire XC 1MZ system at the end of 2022, one year after the Sapphire XC launch at the end of 2021, and we shipped our first Sapphire system at the end of 2018.
Our largest customer, Space Exploration Technologies Corp. (" SpaceX "), accounted for 4.0% and 28.4% of our revenue for the year ended December 31, 2023 and 2022, respectively. Our customers include both OEMs, as well as CMs who provide service and parts on behalf of OEMs.
(" SpaceX "), accounted for 23.0% and 4.0% of our revenue for the year ended December 31, 2024 and 2023, respectively. Our customers include both OEMs, as well as CMs who provide service and parts on behalf of OEMs. Our 3D printer sales occur under purchase orders that are governed by our terms and conditions of sale.
Our machines are not resalable without consent and software licenses are not transferable to certain geographic markets to protect our IP. 13 Research and Development The high-value metal parts and AM segments are undergoing technological advancements across hardware, software and materials.
Research and Development The high-value metal parts and AM segments are undergoing technological advancements across hardware, software and materials.
As of December 31, 2023, we own 60 issued patents of which 40 are issued U.S. patents, and 20 are issued foreign patents. We also have 46 publicly pending patent applications of which 17 are pending U.S. patent applications, 18 are pending foreign patent applications, and 11 are pending Patent Cooperation Treaty patent applications.
As of December 31, 2024, we owned 63 issued patents of which 43 are issued U.S. patents, and 20 are issued foreign patents. We also have 51 publicly pending patent applications of which 47 are pending U.S. patent applications and four pending foreign patent applications.
As of December 31, 2023 we own 60 issued patents of which 40 are issued U.S. patents, and 20 are issued foreign patents. We also have 46 publicly pending patent applications of which 17 are pending U.S. patent applications, 18 are pending foreign patent applications, and 11 are pending Patent Cooperation Treaty patent applications.
As of December 31, 2024 we owned 63 issued patents of which 43 are issued U.S. patents, and 20 are issued foreign patents. We also have 51 publicly pending patent applications of which 47 are pending U.S. patent applications, four are pending foreign patent applications.
A subsequent Extended Support Agreement is available for renewal after the initial contract period based on the then-fair value of the service, which is paid for separately. 8 3D Printer sale transactions fall into two categories: a structured fixed purchase price for the system or a sale and utilization (variable consideration) fee model.
A subsequent Extended Support Agreement is available for renewal after the initial contract period based on the then-fair value of the service, which is paid for separately. Recurring payment transactions are our leased 3D printer transactions.
Our 3D printer sales occur under purchase orders that are governed by our terms and conditions of sale. Our terms and conditions with our largest customer are consistent with all other customers and permit the customers to terminate our services at any time (subject to notice and certain other provisions). We only sell to production customers.
Our terms and conditions with our largest customer are consistent with all other customers and permit the customers to terminate our services at any time (subject to notice and certain other provisions). We only sell to production customers. Our machines are not resalable without consent and software licenses are not transferable to certain geographic markets to protect our IP.
Intelligent Fusion unifies and manages all of the above, including the information flow, sensor data from approximately 1,000 sensors, and the advanced printing technology for precision control of the entire print. Customers Our customers range from small- and medium-sized enterprises to Fortune 500 companies in the space, aviation, defense, automotive, energy and industrial markets.
Intelligent Fusion unifies and manages all of the above, including the information flow, sensor data from approximately 1,000 sensors, and the advanced printing technology for precision control of the entire print. Rapid Production Solutions (RPS) Our Rapid Production Solutions is designed to meet the growing demand for scalable, high-quality production parts.
Our Board of Directors oversees matters relating to managing our human capital resources. Our human capital resources objectives include identifying, recruiting, and hiring qualified talent. We then focus on training, developing, and retaining talent, while ensuring fair compensation and incentives for global employees. We focus heavily on ensuring compliance and workplace safety.
We then focus on training, developing, and retaining talent, while ensuring fair compensation and incentives for global employees. We focus heavily on ensuring compliance and workplace safety. We review our compensation and benefit policies and programs regularly through industry benchmarks.
Going forward, we plan to expand our direct sales force and will consider establishing additional distribution partnerships as we continue to implement our strategy with new customers. 14 Manufacturing and Suppliers We design, assemble, test and ship all of our products and rely on outside manufacturers for component and select subsystems.
Certain of these distribution partners also provide maintenance services to customers in their specified territories. Going forward, we plan to expand our direct sales force and will consider establishing additional distribution partnerships as we continue to implement our strategy with new customers. Business Segments We operate in a single reporting segment.
We do not intend to disclose further developments on this strategic review process unless and until we determine that such disclosure is appropriate or necessary. Strategy for Growth The key elements listed below are the foundation for our growth plan to support innovation and our customers’ growing demand for additive manufacturing solutions.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations––Recent Developments––Recent Debt and Equity Transactions and Change in Majority Ownership.” Strategy for Growth The key elements listed below are the foundation for our growth plan to support innovation and our customers’ growing demand for additive manufacturing solutions.
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In the sale and utilization fee model, customers pay an upfront amount that is less than the full purchase price to purchase the system. This purchase price is supplemented by an hourly usage fee for each hour of system utilization over the life of the system.
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We also aim to enable our customers to build resilient supply chains for production parts across industries with a clear, reliable path from concept to production through our Rapid Production Solutions (RPS) offering. RPS utilizes our deep engineering expertise, cutting-edge technology and a fleet of Sapphire XC large-format metal 3D printers to accelerate path to production for our customers.
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We make certain estimates in calculating the variable consideration, including the amount of hours, the estimated life of the equipment and the discount rate. Although estimates may be made on a contract-by-contract basis, whenever possible, we use all available information including historical customer usage and collection patterns to estimate variable consideration. Management reassesses the estimated variable consideration quarterly.
Added
The Company's strategic review was concluded on December 24, 2024 at the close of the debt for equity exchange transaction.
Removed
Most of our leases have a 12-month term, though in certain cases the lease term is longer. The variable payments are recognized when the event determining the amount of variable consideration to be paid occurs.
Added
RPS enables customers to build resilient supply chains for production parts across industries, including aerospace, defense, energy, and others. Customers Our customers range from small- and medium-sized enterprises to Fortune 500 companies in the space, aviation, defense, automotive, energy and industrial markets. Our largest customer, Space Exploration Technologies Corp.
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There can be no assurance that our strategic review process will result in any transaction or other strategic outcome. We do not expect any impact on our operations or our ability to serve our customers during the review process. We remain committed to driving strategic value for our customers, employees, partners and stockholders.
Added
Our revenues are primarily derived from the sale of 3D printers. See Note 2, Summary of Significant Accounting Policies – Segment Information in the accompanying notes to our consolidated financial statements for further detail. 15 Manufacturing and Suppliers We design, assemble, test and ship all of our products and rely on outside manufacturers for component and select subsystems.
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Certain of these distribution partners also provide maintenance services to customers in their specified territories.
Added
None of our employees are subject to a collective bargaining agreement or are represented by a labor union. 16 Our Board of Directors oversees matters relating to managing our human capital resources. Our human capital resources objectives include identifying, recruiting, and hiring qualified talent.
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In the first quarter of 2023, we launched a leadership development program for global people managers across the Company to strengthen our collective management skills and enhance our culture. The program ran for the duration of 2023 and focused on best practices for managing relationships with employees, suppliers, customers and the communities in which we operate.
Added
In connection with the Merger, JAWS Spitfire’s jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware, and JAWS Spitfire changed its name to Velo3D, Inc. Our address is 2710 Lakeview Court, Fremont, CA 94538. Our telephone number is (408) 610-3915. Our website address is https://www.velo3d.com.
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The program resulted in increased management alignment, increased skills around communication, cross-functional collaboration, and talent development, and provided us with a management framework for leadership practices going forward.
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Through this development program we increased our leadership community and discussion of important micro and macro global topics such as diversity and inclusion, employee friendly policies and practices, employee retention, corporate social responsibility, sustainability, climate-risks, and other important topics that will benefit our Company, employees, customers, suppliers, shareholders and investors.
Removed
These and similar laws and regulations require, among others, the registration, evaluation, authorization and labeling of certain chemicals that we use and ship. 17 Corporate Information We were incorporated on September 11, 2020 as a special purpose acquisition company and a Cayman Islands exempted company under the name JAWS Spitfire Acquisition Corporation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

93 edited+24 added−54 removed330 unchanged
Biggest changeThese IT deficiencies did not result in a misstatement to the consolidated financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all consolidated financial statement accounts 32 and disclosures that would not be prevented or detected.
Biggest changeSpecifically, we did not design and maintain effective: o user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel; and o program change management controls to ensure that information technology program and data changes affecting certain financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately. 30 These IT deficiencies did not result in a misstatement to the consolidated financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all consolidated financial statement accounts and disclosures that would not be prevented or detected.
We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
We cannot predict whether investors will find our securities less attractive because we rely on these exemptions.
Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the public warrants and the private placement warrants each reporting period and that the amount of such gains or losses could be material. The price of our common stock and our public warrants may be volatile.
Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the public warrants and the private placement warrants each reporting period and that the amount of such gains or losses could be material. The price of our common stock may be volatile.
For example, during the year ended December 31, 2023, we experienced less annual revenue growth than expected due to the impact of delayed shipments and customer order delays, resulting in an overall decrease in system sales and backlog in the fourth quarter of 2023.As a result, we determined that our focus on revenue growth had come at the expense of our cash flow and profitability and our commitment to the highest level of customer service and, in October 2023, we made a strategic decision to realign our operations to pivot from emphasizing revenue growth to optimizing our free cash flow, maximizing customer success, reducing expenditures, and improving our operational efficiency.
For example, during the year ended December 31, 2024, we experienced less annual revenue growth than expected due to the impact of delayed shipments and customer order delays, resulting in an overall decrease in system sales and backlog in the fourth quarter of 2024.As a result, we determined that our focus on revenue growth had come at the expense of our cash flow and profitability and our commitment to the highest level of customer service and, in October 2023, we made a strategic decision to realign our operations to pivot from emphasizing revenue growth to optimizing our free cash flow, maximizing customer success, reducing expenditures, and improving our operational efficiency.
Third-party IP claims asserted against us could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from assembling or licensing certain of our products, subject us to injunctions restricting our sale of products, cause severe disruptions to our operations or the marketplaces in which we compete or require us to satisfy indemnification commitments with our customers, including contractual provisions under various license arrangements.
Third-party IP claims asserted against us could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from assembling or 40 licensing certain of our products, subject us to injunctions restricting our sale of products, cause severe disruptions to our operations or the marketplaces in which we compete or require us to satisfy indemnification commitments with our customers, including contractual provisions under various license arrangements.
The value received upon exercise of the public warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may 50 not compensate the holders for the value of the warrants, including because the number of shares of common stock received is capped at 0.365 shares of common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
The value received upon exercise of the public warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares of common stock received is capped at 0.365 shares of common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
If warrant holders exercise their public warrants on a 46 cashless basis, they would pay the warrant exercise price by surrendering all of the warrants for that number of common stock equal to the quotient obtained by dividing (x) the product of the number of common stock underlying the warrants, multiplied by the excess of the “fair market value” of our common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value.
If warrant holders exercise their public warrants on a cashless basis, they would pay the warrant exercise price by surrendering all of the warrants for that number of common stock equal to the quotient obtained by dividing (x) the product of the number of common stock underlying the warrants, multiplied by the excess of the “fair market value” of our common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our consolidated financial statements with other public companies difficult or impossible. 47 The public warrants and the private placement warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our consolidated financial statements with other public companies difficult or impossible. The public warrants and the private placement warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
Existing and 28 potential competitors may also have substantially greater financial, technical, marketing and sales, manufacturing, distribution and other resources than we do, including name recognition, as well as experience and expertise in IP rights and operating within certain international markets, any of which may enable them to compete effectively against us.
Existing and potential competitors may also have substantially greater financial, technical, marketing and sales, manufacturing, distribution and other resources than we do, including name recognition, as well as experience and expertise in IP rights and operating within certain international markets, any of which may enable them to compete effectively against us.
If it becomes necessary for us to litigate to protect these IP rights, any proceedings could be burdensome and costly, could result in counterclaims challenging our IP (including validity or enforceability) or accusing us of infringement, and we may not prevail. Our patent applications and issued patents may be practiced by third parties without our knowledge.
If it 39 becomes necessary for us to litigate to protect these IP rights, any proceedings could be burdensome and costly, could result in counterclaims challenging our IP (including validity or enforceability) or accusing us of infringement, and we may not prevail. Our patent applications and issued patents may be practiced by third parties without our knowledge.
Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.
Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of 46 such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.
We may from time to time become subject to warranty or product liability claims related to product quality issues that could lead us to incur significant expenses. 27 We attempt to include provisions in our agreements and purchase orders with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products.
We may from time to time become subject to warranty or product liability claims related to product quality issues that could lead us to incur significant expenses. We attempt to include provisions in our agreements and purchase orders with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products.
Should any of these suppliers become unavailable or inadequate, or impose terms unacceptable to us, such as increased pricing terms, we could be required to spend a significant amount of time and expense to develop alternate sources of supply, and we may not be successful in doing so on terms acceptable to us, or at all.
Should any of these suppliers become unavailable or inadequate, or impose terms 35 unacceptable to us, such as increased pricing terms, we could be required to spend a significant amount of time and expense to develop alternate sources of supply, and we may not be successful in doing so on terms acceptable to us, or at all.
If we make any major modifications to our facilities, such modifications likely would result in substantial additional capital expenditures and could prolong the time necessary to bring the facility online. We also may choose to refurbish or upgrade our facilities based on our assessment that such activity will provide adequate financial returns.
If we make any major modifications to our facilities, such modifications likely would result in substantial additional capital expenditures and could prolong the time necessary to bring the facility online. We also may choose to refurbish or upgrade our 36 facilities based on our assessment that such activity will provide adequate financial returns.
If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “ foreign action ”) in the name of any holder of our public warrants, such holder will be deemed to have consented to (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “ enforcement action ”) and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder. 53 This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits.
If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “ foreign action ”) in the name of any holder of our public warrants, such holder will be deemed to have consented to (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “ enforcement action ”) and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder. 49 This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits.
Production issues can lead to increased costs and may affect our ability to meet product demand, which could adversely impact our business and results from operations. 39 Risks Related to Compliance Matters We are subject to U.S. and other anti-corruption laws, trade controls, economic sanctions and similar laws and regulations.
Production issues can lead to increased costs and may affect our ability to meet product demand, which could adversely impact our business and results from operations. Risks Related to Compliance Matters We are subject to U.S. and other anti-corruption laws, trade controls, economic sanctions and similar laws and regulations.
However, our recent and projected financial results, and the related conditions that raise substantial doubt about our ability to continue as a going concern, and general concerns among potential investors and creditors about our financial well-being may make taking such actions on commercially reasonable terms especially difficult.
Our recent and projected financial results, and the related conditions that raise substantial doubt about our ability to continue as a going concern, and general concerns among potential investors and creditors about our financial well-being may make taking such actions on commercially reasonable terms especially difficult.
Accordingly, the adverse effect resulting from the loss of certain members of senior management could be compounded by our inability to prevent them from competing with us. If we fail to grow our business as anticipated, our net sales, gross margin and operating margin will be adversely affected.
Accordingly, the adverse effect resulting from the loss of certain members of senior management could be compounded by our inability to prevent them from competing with us. 28 If we fail to grow our business as anticipated, our net sales, gross margin and operating margin will be adversely affected.
Foreign Corrupt Practices Act (“ FCPA ”), and compliance with anti-corruption laws in other countries, such as the UK Bribery Act (“ Bribery Act ”); • tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets; 29 • operating in countries with a higher incidence of corruption and fraudulent business practices; • changes in regulatory requirements, including export controls, tariffs and embargoes, other trade restrictions, competition, corporate practices and data privacy concerns; • potential adverse tax consequences arising from global operations; • rapid changes in government, economic and political policies and conditions; and • political or civil unrest or instability, terrorism or epidemics and other similar outbreaks or events.
Foreign Corrupt Practices Act (“ FCPA ”), and compliance with anti-corruption laws in other countries, such as the UK Bribery Act (“ Bribery Act ”); • tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets; • operating in countries with a higher incidence of corruption and fraudulent business practices; • changes in regulatory requirements, including export controls, tariffs and embargoes, other trade restrictions, competition, corporate practices and data privacy concerns; • potential adverse tax consequences arising from global operations; • rapid changes in government, economic and political policies and conditions; and 27 • political or civil unrest or instability, terrorism or epidemics and other similar outbreaks or events.
The “fair market value” is the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
The “fair market value” is the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of 43 redemption is sent to the holders of warrants, as applicable.
In addition, the expiration of a patent can result in increased competition with consequent erosion of profit margins. 42 Our confidentiality agreements could be breached or may not provide meaningful protection for at least a portion of our trade secrets or proprietary manufacturing expertise.
In addition, the expiration of a patent can result in increased competition with consequent erosion of profit margins. Our confidentiality agreements could be breached or may not provide meaningful protection for at least a portion of our trade secrets or proprietary manufacturing expertise.
Open-source software is made available to the general public on an “as-is” basis under the terms of a non-negotiable license. We currently combine our proprietary software with open-source software, but not in a manner that we believe requires the release of the source code of our proprietary software to the public.
Open-source software is made available to the general public on an “as-is” basis under the terms of a non-negotiable 41 license. We currently combine our proprietary software with open-source software, but not in a manner that we believe requires the release of the source code of our proprietary software to the public.
The material weaknesses are as follows: • We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we did not maintain a sufficient complement of personnel with an appropriate degree of internal controls and accounting knowledge, experience, and training commensurate with our accounting and financial reporting requirements.
The material weaknesses are as follows: 29 • We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we did not maintain a sufficient complement of personnel with an appropriate degree of internal controls and accounting knowledge, experience, and training commensurate with our accounting and financial reporting requirements.
However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future. The sale and support of our products entails the risk of product liability claims.
However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future. 25 The sale and support of our products entails the risk of product liability claims.
Privacy and security laws and regulations may limit the use and disclosure of certain information and require us to adopt certain 41 cybersecurity and data handling practices that may affect our ability to effectively market our services to current, past or prospective customers.
Privacy and security laws and regulations may limit the use and disclosure of certain information and require us to adopt certain cybersecurity and data handling practices that may affect our ability to effectively market our services to current, past or prospective customers.
We may also face claims alleging noncompliance with open-source license terms or 44 infringement or misappropriation of proprietary software. These claims could result in litigation, require us to purchase a costly license, or remove the software.
We may also face claims alleging noncompliance with open-source license terms or infringement or misappropriation of proprietary software. These claims could result in litigation, require us to purchase a costly license, or remove the software.
While we have not experienced any such claims to date, actual or 36 claimed defects in the products we supply could result in our being named as a defendant in lawsuits asserting potentially large claims.
While we have not experienced any such claims to date, actual or claimed defects in the products we supply could result in our being named as a defendant in lawsuits asserting potentially large claims.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or management. 52 Our Certificate of Incorporation and our Amended and Restated Bylaws designate a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, stockholders, employees or agents.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or management. 48 Our Certificate of Incorporation and our Amended and Restated Bylaws designate a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, stockholders, employees or agents.
We may also seek to raise additional capital, including from offerings of our equity or 22 debt securities on an opportunistic basis when we believe there are suitable opportunities.
We may also seek to raise additional capital, including from offerings of our equity or debt securities on an opportunistic basis when we believe there are suitable opportunities.
For example, the 2017 Tax Cuts and Jobs Act (the “ Tax Act ”) made broad and complex changes to the U.S. tax code, including changes to U.S. federal tax rates, additional limitations on the deductibility of interest, both positive and negative 34 changes to the utilization of future net operating loss (“ NOL ”) carryforwards, allowing for the expensing of certain capital expenditures, and putting into effect the migration from a “worldwide” system of taxation to a more territorial system.
For example, the 2017 Tax Cuts and Jobs Act (the “ Tax Act ”) made broad and complex changes to the U.S. tax code, including changes to U.S. federal tax rates, additional limitations on the deductibility of interest, both positive and negative changes to the utilization of future net operating loss (“ NOL ”) carryforwards, allowing for the 32 expensing of certain capital expenditures, and putting into effect the migration from a “worldwide” system of taxation to a more territorial system.
This material weakness contributed to the following additional material weaknesses. 31 • We did not design and maintain effective controls over the segregation of duties related to journal entries and account reconciliations.
This material weakness contributed to the following additional material weaknesses. • We did not design and maintain effective controls over the segregation of duties related to journal entries and account reconciliations.
We do not have long-term agreements with any of 37 these suppliers that obligate them to continue to sell components, subsystems, systems or products to us.
We do not have long-term agreements with any of these suppliers that obligate them to continue to sell components, subsystems, systems or products to us.
These laws and regulations require the testing and registration of some chemicals that we ship along with, or that form a part of, our systems and other products.
These laws and regulations require the testing and 38 registration of some chemicals that we ship along with, or that form a part of, our systems and other products.
We rely on a 43 combination of registered and unregistered IP and protect our rights using patents, trademarks, trade secrets, confidentiality agreements, and assignment of invention agreements and other methods.
We rely on a combination of registered and unregistered IP and protect our rights using patents, trademarks, trade secrets, confidentiality agreements, and assignment of invention agreements and other methods.
However, the largest customer contribution as a percentage of our total revenue will depend on the growth of our customer base. As of December 31, 2023, over 50% of our customers have multiple Sapphire family of systems products. Our 3D printer sales occur under purchase orders that are governed by our terms and conditions of sale.
However, the largest customer contribution as a percentage of our total revenue will depend on the growth of our customer base. As of December 31, 2024, over 50% of our customers have multiple Sapphire family of systems products. Our 3D printer sales occur under purchase orders that are governed by our terms and conditions of sale.
These types of investments involve significant challenges and risks, including that the investment may not advance our business strategy, that we may not realize a satisfactory return on our investment, 25 that we may acquire unknown liabilities, or that management’s attention may be diverted from our core business. These events could harm our operating results or financial condition.
These types 23 of investments involve significant challenges and risks, including that the investment may not advance our business strategy, that we may not realize a satisfactory return on our investment, that we may acquire unknown liabilities, or that management’s attention may be diverted from our core business. These events could harm our operating results or financial condition.
We may not be able to develop effective strategies to raise awareness among potential customers of the benefits of additive manufacturing 26 technologies or our products may not address the specific needs or provide the level of functionality required by potential customers to encourage the continuation of this shift towards additive manufacturing.
We may not be able to develop effective strategies to raise 24 awareness among potential customers of the benefits of additive manufacturing technologies or our products may not address the specific needs or provide the level of functionality required by potential customers to encourage the continuation of this shift towards additive manufacturing.
We may not be able to complete future acquisitions on favorable terms, if at all. 24 If we do complete future acquisitions, we cannot assure that they will ultimately strengthen our competitive position or that they will be viewed positively by customers, financial markets or investors.
We may not be able to complete future acquisitions on favorable terms, if at all. 22 If we do complete future acquisitions, we cannot assure that they will ultimately strengthen our competitive position or that they will be viewed positively by customers, financial markets or investors.
Moreover, 35 competitors may respond to challenging market conditions by lowering prices and attempting to lure away our customers. We cannot predict the timing, strength, or duration of any economic slowdown or any subsequent recovery generally, or in any industry.
Moreover, competitors may respond to challenging market conditions by lowering prices and attempting to lure away our customers. 33 We cannot predict the timing, strength, or duration of any economic slowdown or any subsequent recovery generally, or in any industry.
Risks Related to Our Common Stock and Our Public Warrants Warrant holders may only be able to exercise their public warrants on a “cashless basis” under certain circumstances, and if such warrant holders do so, they will receive fewer shares of common stock from such exercise than if they were to exercise such warrants for cash.
Warrant holders may only be able to exercise their public warrants on a “cashless basis” under certain circumstances, and if such warrant holders do so, they will receive fewer shares of common stock from such exercise than if they were to exercise such warrants for cash.
Our principal offices are located in Fremont, California. Substantially all of our R&D activities, customer and technical support, management and administrative operations, and our final assembly and testing operations are conducted at the facility in Fremont, California. Our inventory of component supplies, subassemblies and finished goods are held at our Fremont facility and third-party warehouses.
Substantially all of our R&D activities, customer and technical support, management and administrative operations, and our final assembly and testing operations are conducted at the facility in Fremont, California. Our inventory of component supplies, subassemblies and finished goods are held at our Fremont facility and third-party warehouses.
In recent years, the United States and other significant markets have experienced cyclical downturns and worldwide economic conditions remain uncertain, including as a result of outbreaks of epidemic diseases (including COVID-19 and variants), supply chain disruptions, the war in Ukraine and the war in Israel, instability in the U.S. and global banking systems, rising fuel prices, increasing interest rates or foreign exchange rates and, as discussed in more detail below, high inflation and the possibility of a recession.
In recent years, the United States and other significant markets have experienced cyclical downturns and worldwide economic conditions remain uncertain, including as a result of outbreaks of epidemic diseases (including COVID-19 and variants), supply chain disruptions, the war in Ukraine and the war in Israel, instability in the U.S. and global banking systems, rising fuel prices, increasing interest rates or foreign exchange rates, changes in U.S. presidential administrations and government policies and priorities and, as discussed in more detail below, high inflation and the possibility of a recession.
Also, these material weaknesses resulted in an uncorrected misstatement to inventories and cost of revenue and adjustments to debt – current portion and long-term debt, other income, additional paid in capital, gain on fair value of warrants, interest expense, revenue and contract assets, and loss on debt extinguishment which were recorded prior to the issuance of the consolidated financial statements as of and for the year ended December 31, 2023.
Also, these material weaknesses resulted in adjustments to debt – current portion and long-term debt, other income, additional paid in capital, gain on fair value of warrants, interest expense, revenue and contract assets, and loss on debt extinguishment which were recorded prior to the issuance of the consolidated financial statements as of and for the year ended December 31, 2023.
The trading price of our common stock and our public warrants has fluctuated, and is likely to continue to fluctuate due to a variety of factors, including: • 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; • our ability to service and comply with our indebtedness; • our ability to satisfy NYSE listing rules; • changes in the industries in which we and our customers operate; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about our or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • our failure or the failure of our competitors to meet securities analysts’ projections or guidance that our or our competitors may give to the market; • changes in our financial, operating or other metrics, regardless of whether we consider those metrics as reflective of the current state or long-term prospects of our business, and how those results compare to securities analyst expectations, including whether those results fail to meet, exceed, or significantly exceed securities analyst expectations; • additions and departures of key personnel; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; 48 • changes in our capital structure, such as future issuances of securities pursuant to the ATM Sales Agreement, under the Shelf Registration Statement or otherwise or the incurrence of additional debt including in connection with the exercise by certain affiliated institutional investors of their right to purchase the Additional Secured Convertible Notes; • the volume of shares of our common stock available for public sale; and • general economic and political conditions such as recessions, interest rates, fuel prices, inflation, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism (including, for example, the war in Israel, and the war in Ukraine and the economic sanctions related thereto).
The trading price of our common stock and our public warrants has fluctuated, and is likely to continue to fluctuate due to a variety of factors, including: • 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; • our ability to service and comply with our indebtedness; • changes in the industries in which we and our customers operate; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about our or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • our failure or the failure of our competitors to meet securities analysts’ projections or guidance that our or our competitors may give to the market; • changes in our financial, operating or other metrics, regardless of whether we consider those metrics as reflective of the current state or long-term prospects of our business, and how those results compare to securities analyst expectations, including whether those results fail to meet, exceed, or significantly exceed securities analyst expectations; • additions and departures of key personnel; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt including in connection with the exercise by certain affiliated institutional investors of their right to purchase the Additional Secured Convertible Notes; • the volume of shares of our common stock available for public sale; and • general economic and political conditions such as recessions, interest rates, fuel prices, inflation, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism (including, for example, the war in Israel, and the war in Ukraine and the economic sanctions related thereto). 45 These market and industry factors may materially reduce the market price of our common stock and our public warrants regardless of our operating performance.
We refer to the Secured Notes and the Secured Convertible Notes collectively as the “ Notes .” The Secured Notes contain, and the Additional Secured Convertible Notes if issued will contain, a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest.
We refer to the Secured Notes and the Secured Convertible Notes collectively as the “ Notes .” The Secured Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest.
Future sales of our common stock either by us or our stockholders, including pursuant to the ATM Sales Agreement, could cause the market price of our common stock to drop significantly, even if our business is doing well. Sales of a substantial number of shares of our common stock in the public market could occur at any time.
Future sales of our common stock either by us or our stockholders could cause the market price of our common stock to drop significantly, even if our business is doing well. Sales of a substantial number of shares of our common stock in the public market could occur at any time.
In particular, the Secured Notes contain, and the Additional Secured Convertible Notes if issued will contain, customary affirmative and negative covenants (including covenants that limit our ability to incur debt, make investments, transfer assets, engage in certain transactions with affiliates and merge with other companies, in each case, other than those permitted by the Notes) and events of default.
In particular, the Secured Notes contain customary affirmative and negative covenants (including covenants that limit our ability to incur debt, make investments, transfer assets, engage in certain transactions with affiliates and merge with other companies, in each case, other than those permitted by the Notes) and events of default.
Code in order to provide us additional time to identify an appropriate solution to our financial situation and implement a plan of reorganization aimed at improving our capital structure. Our limited operating history and rapid growth makes evaluating our current business and future prospects difficult and may increase the investment risk. Much of our growth has occurred in recent periods.
Code in order to provide us additional time to identify an appropriate solution to our financial situation and implement a plan of reorganization aimed at improving our capital structure. 19 Our limited operating history and rapid growth makes evaluating our current business and future prospects difficult and may increase the investment risk.
We may be unable to realize the level of the anticipated benefits that we expect from restructuring our operations, which may adversely impact our business and results of operations. In October 2023, we announced a reduction in force to streamline our business operations, reduce costs and create further operating efficiencies, which impacted approximately 21% of our workforce.
We may be unable to realize the level of the anticipated benefits that we expect from restructuring our operations, which may adversely impact our business and results of operations. In August and October 2024, we announced a reduction in force to streamline our business operations, reduce costs and create further operating efficiencies, which combined impacted approximately 45% of our workforce.
Upon an event of default, we may not be able to make any accelerated payments under the Notes or our other permitted indebtedness. As of December 31, 2023, we had approximately $36.7 million aggregate principal amount of the Secured Notes outstanding.
Upon an event of default, we may not be able to make any accelerated payments under the Notes or our other permitted indebtedness. As of December 31, 2024, we had approximately $5.0 million aggregate principal amount of the Secured Notes outstanding.
Our limited operating history may make it difficult to evaluate our current business and our future prospects, as we continue to grow our business. Our ability to forecast our future operating results is subject to a number of uncertainties, including our ability to plan for and model future growth.
Much of our growth has occurred in recent periods. Our limited operating history may make it difficult to evaluate our current business and our future prospects, as we continue to grow our business. Our ability to forecast our future operating results is subject to a number of uncertainties, including our ability to plan for and model future growth.
While we believe that we understand the engineering and process characteristics necessary to successfully design and produce additive manufacturing systems to make high-value metal parts for our customers, our assumptions may prove to be incorrect, and we may be unable to consistently produce additive manufacturing products in an economical manner in commercial quantities. 23 Certain additive manufacturing solutions are still under development.
While we believe that we understand the engineering and process characteristics necessary to successfully design and produce additive manufacturing systems to make high-value metal parts for our 21 customers, our assumptions may prove to be incorrect, and we may be unable to consistently produce additive manufacturing products in an economical manner in commercial quantities.
We have filed a registration statement (the “ Resale Shelf Registration Statement ”) which registers the offer and sale from time to time by certain selling stockholders of up to 161,028,936 shares of our common stock.
We have filed a registration statement (the “ Resale Shelf Registration Statement ”) which registers the offer and sale from time to time by certain selling stockholders of up to 4,600,827 shares of our common stock.
We have experienced, and may experience in the future, delays in the design, testing, manufacture and commercial release of new products, and any delay in the launch of our products could materially damage our brand, business, growth prospects, financial condition and operating results.
Certain additive manufacturing solutions are still under development. We have experienced, and may experience in the future, delays in the design, testing, manufacture and commercial release of new products, and any delay in the launch of our products could materially damage our brand, business, growth prospects, financial condition and operating results.
As part of our business, we may deal with state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA’s prohibition on providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage.
Notwithstanding President Trump’s recent executive order to suspend enforcement of the FCPA, as part of our business, we may deal with state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA’s prohibition on providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage.
In addition, we have begun the process of closing down several of our facilities. In connection with these actions, we have incurred and may continue to incur restructuring costs in the near term, including cash expenditures related to severance payments and other benefits.
In addition, we have closed one facility and continue the process of closing down others. In connection with these actions, we have incurred and may continue to incur restructuring costs in the near term, including cash expenditures related to severance payments and other benefits.
These investments may not result in increased revenue or growth in our business. Servicing our indebtedness requires a significant amount of cash and, as a public company, we incur significant legal, accounting and other expenses. These obligations and expenditures may make it harder for us to achieve and maintain future profitability.
Servicing our indebtedness requires a significant amount of cash and, as a public company, we incur significant legal, accounting and other expenses. These obligations and expenditures may make it harder for us to achieve and maintain future profitability.
Depending on market liquidity at the time, sales of our common stock pursuant to the ATM Sales Agreement, or other sales of our common stock or other securities under the Shelf Registration Statement, may cause the trading price of our common stock to decline.
If in the future we are again able to make sales under the ATM Sales Agreement, depending on market liquidity at the time, sales of our common stock pursuant to the ATM Sales Agreement, or other sales of our common stock or other securities under the Shelf Registration Statement, may cause the trading price of our common stock to decline.
These sales, or the perception in the market that either we or the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. We had outstanding 261,704,586 shares of common stock on March 22, 2024.
These sales, or the perception in the market that either we or the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. We had outstanding 210,232,762 shares of common stock on March 25, 2025.
As a result, included on our balance sheet as of December 31, 2023 contained elsewhere in this Annual Report are derivative liabilities related to embedded features contained within these warrants.
As a result, included on our balance sheet as of December 31, 2023 contained were 44 derivative liabilities related to embedded features contained within these warrants.
There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar provisions in other companies’ charter documents has been challenged in legal proceedings.
While Delaware courts have determined these types of provisions to be facially valid, there is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar provisions in other companies’ charter documents has been challenged in legal proceedings.
Violations of anti-corruption and trade control laws and sanctions regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment and could harm our reputation, create negative shareholder sentiment and affect the value of our securities.
Any failures to comply with these laws and regulations could result in fines, adverse publicity and restrictions on our ability to export our products, and repeat failures could carry more significant penalties. 37 Violations of anti-corruption and trade control laws and sanctions regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment and could harm our reputation, create negative shareholder sentiment and affect the value of our securities.
If the conditions in the general economy and the markets in which we operate worsen from present levels, our business, financial condition, and operating results could be adversely affected.
If the conditions in the general economy and the markets in which we operate worsen from present levels, our business, financial condition, and operating results could be adversely affected. For example, recent tariff actions have resulted in market uncertainty and volatility.
If our assumptions regarding these uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in our markets, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, our business could suffer, and the trading price of our securities may decline. 21 It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business.
If our assumptions regarding these uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in our markets, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, our business could suffer, and the trading price of our securities may decline.
We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure will continue to increase our costs and the risk of non-compliance. 51 We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law.
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law.
In addition, concerns about terrorism, the effects of a terrorist attack, political turmoil, labor strikes, war (including the Ukrainian - Russia and the Israel - Hamas conflicts) or the outbreak of epidemic diseases (including the outbreak of COVID-19 and variants) could have a negative effect on our operations and sales. 38 Risks Related to Operations We operate primarily at one facility location, and any disruption at our facility could adversely affect our business and operating results.
In addition, concerns about terrorism, the effects of a terrorist attack, political turmoil, labor strikes, war (including the Ukrainian - Russia and the Israel - Hamas conflicts) or the outbreak of epidemic diseases (including the outbreak of COVID-19 and variants) could have a negative effect on our operations and sales.
Our failure to comply with these laws and regulations could subject us to civil, criminal and administrative penalties and harm our reputation. • We are subject to environmental, health and safety laws and regulations related to our operations and the use of our additive manufacturing systems and consumable materials, which could subject us to compliance costs and/or potential liability in the event of non-compliance. • Aspects of our business are subject to privacy, data use and data security regulations, which could increase our costs.
We are subject to environmental, health and safety laws and regulations related to our operations and the use of our additive manufacturing systems and consumable materials, which could subject us to compliance costs and/or potential liability in the event of non-compliance.
These customers may be more susceptible to negative impacts from economic downturns, recession, inflation, supply chain shortages or the outbreak of epidemic diseases than larger, more established businesses, and if they fail to raise enough capital, they may have to shut down operations.
These customers may be more susceptible to negative impacts from economic downturns, recession, inflation, supply chain shortages or the outbreak of epidemic diseases than larger, more established businesses, and if they fail to raise enough capital, they may have to shut down operations. 20 We expect to require additional capital to fund our operations in the near-term, and this capital might not be available on acceptable terms, if at all.
Furthermore, as a result of these restrictions, we may be limited in how we conduct and grow our business, or unable to compete effectively or to take advantage of new business opportunities.
A default would also significantly diminish the market price of our common stock and our public warrants. As a result of these restrictions, we may be limited in how we conduct and grow our business, or unable to compete effectively or to take advantage of new business opportunities.
As a result of doing business in foreign countries and with foreign customers, we are exposed to a heightened risk of violating anti-corruption and trade control laws and sanctions regulations.
As a result of doing business in foreign countries and with foreign customers, we are exposed to a heightened risk of violating anti-corruption and trade control laws and sanctions regulations. In February 2025, President Donald J. Trump issued an executive order directing the U.S.
To the extent any of our outstanding warrants are exercised, it will increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
To the extent any of our outstanding warrants are exercised, it will increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. As of December 31, 2024, we have 5,504,118 outstanding warrants to purchase an equal number of shares of common stock.
To this end, we have made, and expect to continue to make investments in our business, including investments in our infrastructure, technology, marketing and sales efforts. If our business does not generate the level of revenue required to support our investment, our net sales and profitability will be adversely affected. 30 We may not manage our growth effectively.
If our business does not generate the level of revenue required to support our investment, our net sales and profitability will be adversely affected. We may not manage our growth effectively.
None of the private placement warrants will be redeemable by us, subject to certain circumstances, so long as they are held by the Sponsor or its permitted transferees.
None of the private placement warrants will be redeemable by us, subject to certain circumstances, so long as they are held by the Sponsor or its permitted transferees. A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.
Of the top three customers for the year ended December 31, 2023, all three customer was different from the top three customers for the comparable period in 2022. We continue to diversify our customer base.
For the years ended December 31, 2024 and 2023, sales to the top three customers accounted for 47.0% and 24.5% of our revenue, respectively. Of the top three customers for the year ended December 31, 2024, all three customers were different from the top three customers for the comparable period in 2023. We continue to diversify our customer base.
Future competition may arise from the development of allied or related techniques for equipment, materials and services that are not encompassed by our patents, from the issuance of patents to other companies that may inhibit our ability to develop certain products and from improvements to existing technologies.
We may lose market share to, or fail to gain market share from, producers of products that can be substituted for our products, which may have an adverse effect on our results of operations and financial condition. 26 Future competition may arise from the development of allied or related techniques for equipment, materials and services that are not encompassed by our patents, from the issuance of patents to other companies that may inhibit our ability to develop certain products and from improvements to existing technologies.
Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline.
Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline.
In addition, various state and municipal governments, universities and other investors maintain prohibitions or restrictions on investments in companies that do business with sanctioned countries, persons and entities, which could adversely affect our reputation, business, financial condition and results of operations. 40 We are subject to environmental, health and safety laws and regulations related to our operations and the use of our additive manufacturing systems and consumable materials, which could subject us to compliance costs and/or potential liability in the event of non-compliance.
In addition, various state and municipal governments, universities and other investors maintain prohibitions or restrictions on investments in companies that do business with sanctioned countries, persons and entities, which could adversely affect our reputation, business, financial condition and results of operations.
If we grow as anticipated but fail to manage our growth and expand our operations accordingly, our business may be harmed and our results of operation may suffer. From January 1, 2021 through September 30, 2023 we experienced rapid growth each quarter, and we are attempting to continue to grow our business substantially.
If we grow as anticipated but fail to manage our growth and expand our operations accordingly, our business may be harmed and our results of operation may suffer.
Any such lawsuit, regardless of merit, could result in material expense, diversion of management time and efforts and damage to our reputation, and could cause us to fail to retain or attract customers, which could adversely affect our results of operations.
Any such lawsuit, regardless of merit, could result in material expense, diversion of management time and efforts and damage to our reputation, and could cause us to fail to retain or attract customers, which could adversely affect our results of operations. 34 We depend on independent contractors and third parties to provide key services in our product development and operations, and any disruption of their services, or an increase in cost of these services, could negatively impact our financial condition and results of operations.
Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock. Securities research analysts may establish and publish their own periodic projections for us. These projections may vary widely and may not accurately predict the results we actually achieve.
Securities research analysts may establish and publish their own periodic projections for us. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur VP of IT oversees information technology (" IT ") strategy, operations, cybersecurity, compliance, and business applications. They are dedicated to accelerating and scaling our company by implementing innovative technology across the company.
Biggest changeOur IT personnel oversees information technology (" IT ") strategy, operations, cybersecurity, compliance, and business applications. They are dedicated to accelerating and scaling our company by implementing innovative technology across the company. Additionally, they are an accomplished IT expert with over 15 years of experience driving transformative change across diverse industries, including manufacturing, financial services, and software as a service.
Collaborative Approach: We have implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also executing controls and procedures that provide for the prompt escalation of certain material cybersecurity incidents so that decisions regarding the public disclosure and reporting of such material incidents can be made by management in a timely manner. 54 Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
Collaborative Approach: We have implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also executing controls and procedures that provide for the prompt escalation of certain material cybersecurity incidents so that decisions regarding the public disclosure and reporting of such material incidents can be made by management in a timely manner. 50 Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
Although we are subject to ongoing and evolving cybersecurity threats, we are not aware of any material risks from cybersecurity threats in 2023 that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
Although we are subject to ongoing and evolving cybersecurity threats, we are not aware of any material risks from cybersecurity threats in 2024 that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of 51 operations or financial condition.
Our VP of IT, in coordination with our executive management team, works collaboratively across the company to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans.
Our IT personnel, in coordination with our executive management team, works collaboratively across the company to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans.
Risk Management and Strategy As one of the critical elements of our overall risk management approach, our cybersecurity program is focused on the following key areas: Governance: The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board, which receives, at a minimum, quarterly reports and presentations from our risk management function, our Vice President Information Technology (our " VP of IT ") and other members of management.
Risk Management and Strategy As one of the critical elements of our overall risk management approach, our cybersecurity program is focused on the following key areas: Governance: The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board, which receives, at a minimum, quarterly reports and presentations from our risk management function, our Information Technology department and other members of management .
Through ongoing communications with our entire employee basis and appropriate third-party contractors, the VP of IT, and our Head of Information Security, as well as the management team monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report threats and incidents to the Audit Committee, as needed.
Through ongoing communications with our entire employee basis and appropriate third-party contractors, as well as the management team monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report threats and incidents to the Audit Committee , as needed.
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Additionally, they are an accomplished IT executive with over 20 years of leadership experience driving transformative change across diverse industries, including manufacturing, supply 55 chain, and software as a service. The VP of IT is a skilled technical leader proficient in technology strategy, enterprise architecture, and program management.
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Our Head of Information Security, Governance, Risk and Compliance is CISA certified and has over 20 years of leadership experience in IT audit and governance, risk and compliance (" GRC ") at companies like Google, Cisco, Federal Reserve Bank, & Vodafone.
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They have substantial expertise in implementing SOX compliance, NIST compliance, COSO / COBIT framework, GDPR compliance, privacy compliance, regulatory compliance, internal IT audit, ITIL/ ITSM standards and risk assessment. Additionally, they have established our enterprise risk management program and leads our infosec steering committee.
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They have also been instrumental in automating GRC and continuous control monitoring to drive efficiency at our company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur lease for the two Campbell locations will terminate in the second half of 2024.
Biggest changeOur lease for the two Campbell locations was terminated in the second half of 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. From time to time, we may be involved in various disputes and litigation matters that arise in the ordinary course of business. We are currently not a party to any material legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 56 PART II
Biggest changeItem 3. Legal Proceedings. From time to time, we may be involved in various disputes and litigation matters that arise in the ordinary course of business. We are currently not a party to any material legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 52 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock has been traded on the NYSE under the symbol “VLD” since September 30, 2021. Prior to that, our Class A ordinary shares traded on the NYSE under the symbol "SPFR".
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is currently quoted on the OTC Pink under the symbol “VLDX”. Our common stock was previously traded on the OTCQX under the symbol “VLDX”, and prior to that, on the NYSE under the symbol "VLD".
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023, and is incorporated herein by reference. Sales of Unregistered Securities None. Use of Proceeds. None.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024, and is incorporated herein by reference. Sales of Unregistered Securities None. Use of Proceeds. None.
Issuer Purchases of Equity Securities None. Item 6. Reserved
Issuer Purchases of Equity Securities None. Item 6. Reserved 53
Holders of Record As of March 27, 2024, there were over 20,000 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock represented by these record holders.
Holders of Record As of March 27, 2025, there were over 195 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock represented by these record holders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs of December 31, 2023 and 2022, there were immaterial foreign income taxes or liabilities. 65 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022: The following table summarizes our historical results of operations and as a percentage of revenue for the periods presented: Year Ended December 31, 2023 2022 Change % (In thousands, except for percentages) Revenue 3D Printer $ 68,938 89.0 % $ 69,295 88.0 % $ (357) (0.5) % Recurring payment 1,676 2.2 % 4,161 5.3 % (2,485) (59.7) % Support services 6,829 8.8 % 5,250 6.7 % 1,579 30.1 % Total Revenue 77,443 100.0 % 78,706 100.0 % (1,263) (1.6) % Cost of revenue 3D Printer 94,448 122.0 % 68,253 86.7 % 26,195 38.4 % Recurring payment 1,291 1.7 % 2,612 3.3 % (1,321) (50.6) % Support services 7,971 10.3 % 6,998 8.9 % 973 13.9 % Total cost of revenue 103,710 133.9 % 77,863 98.9 % 25,847 33.2 % Gross profit (26,267) (33.9) % 843 1.1 % (27,110) (3215.9) % Operating expenses Research and development 42,031 54.3 % 46,266 58.8 % (4,235) (9.2) % Selling and marketing 23,229 30.0 % 23,907 30.4 % (678) (2.8) % General and administrative 41,727 53.9 % 36,982 47.0 % 4,745 12.8 % Total operating expenses 106,987 138.1 % 107,155 136.1 % (168) (0.2) % Loss from operations (133,254) (172.1) % (106,312) (135.1) % (26,942) 25.3 % Interest expense (9,722) (12.6) % (372) (0.5) % (9,350) 2513.4 % Gain (loss) on fair value of warrants 2,338 3.0 % 19,129 24.3 % (16,791) (87.8) % Gain on fair value of contingent earnout liabilities 15,958 20.6 % 94,073 119.5 % (78,115) (83.0) % Gain on fair value of debt derivatives 8,485 11.0 % — — % 8,485 100.0 % Loss on debt extinguishment (19,450) (25.1) % — — % (19,450) (100.0) % Other income (expense), net 506 0.7 % 1,451 1.8 % (945) (65.1) % Income (loss) before provision for income taxes (135,139) (174.5) % 7,969 10.1 % (143,108) (1795.8) % Provision for income taxes — — % — — % — — % Net income (loss) $ (135,139) (174.5) % $ 7,969 10.1 % $ (143,108) (1795.8) % 66 Revenue The following table presents the revenue disaggregated by products and service type, as well as the percentage of total revenue.
Biggest changeAs of December 31, 2024 and 2023, there were immaterial foreign income taxes or liabilities. 60 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023: The following table summarizes our historical results of operations and as a percentage of revenue for the periods presented: Year Ended December 31, 2024 2023 Change % (In thousands, except for percentages) Revenue 3D Printer $ 25,368 61.9 % $ 68,938 89.0 % $ (43,570 ) (63.2 )% Recurring payment 1,054 2.6 % 1,676 2.2 % (622 ) (37.1 )% Support services 9,581 23.4 % 6,829 8.8 % 2,752 40.3 % Other 5,000 12.2 % — — % 5,000 NS Total Revenue 41,003 100.0 % 77,443 100.0 % (36,440 ) (47.1 )% Cost of revenue 3D Printer 34,159 83.3 % 94,448 122.0 % (60,289 ) (63.8 )% Recurring payment 866 2.1 % 1,291 1.7 % (425 ) (32.9 )% Support services 8,063 19.7 % 7,971 10.3 % 92 1.2 % Total cost of revenue 43,088 105.1 % 103,710 133.9 % (60,622 ) (58.5 )% Gross loss (2,085 ) (5.1 )% (26,267 ) (33.9 )% 24,182 (92.1 )% Operating expenses Research and development 17,108 41.7 % 42,031 54.3 % (24,923 ) (59.3 )% Selling and marketing 13,808 33.7 % 23,229 30.0 % (9,421 ) (40.6 )% General and administrative 49,346 120.3 % 41,727 53.9 % 7,619 18.3 % Total operating expenses 80,262 195.7 % 106,987 138.1 % (26,725 ) (25.0 )% Loss from operations (82,347 ) (200.8 )% (133,254 ) (172.1 )% 50,907 (38.2 )% Interest expense (15,968 ) (38.9 )% (9,722 ) (12.6 )% (6,246 ) 64.2 % Gain on fair value of warrants 32,094 78.3 % 2,338 3.0 % 29,756 1272.7 % Gain on fair value of contingent earnout liabilities 1,445 3.5 % 15,958 20.6 % (14,513 ) (90.9 )% Gain on fair value of debt derivatives — — % 8,485 11 % (8,485 ) (100.0 )% Loss on debt extinguishment (4,904 ) (12.0 )% (19,450 ) (25 )% 14,546 (74.8 )% Other income (expense), net (3,637 ) (8.9 )% 506 0.7 % (4,143 ) (818.8 )% Loss before provision for income taxes (73,317 ) (178.8 )% (135,139 ) (174.5 )% 61,822 (45.7 )% Provision for income taxes 20 NS — — % 20 NS Net loss $ (73,297 ) (178.8 )% $ (135,139 ) (174.5 )% $ 61,842 (45.8 )% 61 Revenue The following table presents the revenue disaggregated by products and service type, as well as the percentage of total revenue.
Investing Activities Net cash provided by investing activities during the year ended December 31, 2023 was $38.9 million, consisting of $35.1 million of proceeds from maturity of available for sale investments and $10.7 million in sales of available for sale securities, offset by property and equipment purchases of $1.0 million, purchases of available-for-sale investments of $3.7 million consisting primarily of high quality investment-grade securities, and production of equipment for lease to customers of $2.2 million.
Net cash provided by investing activities during the year ended December 31, 2023 was $38.9 million, consisting of $35.1 million of proceeds from maturity of available for sale investments and $10.7 million in sales of available for sale securities, offset by property and equipment purchases of $1.0 million, purchases of available-for-sale investments of $3.7 million consisting primarily of high quality investment-grade securities, and production of equipment for lease to customers of $2.2 million.
We expect that we will need to engage in additional financings to fund our operations and satisfy our obligations in the near-term as well as to respond to business challenges and opportunities, including the need to repay the Secured Notes, provide working capital, develop new features or enhance our products, expand our manufacturing capacity, improve our operating infrastructure, or acquire complementary businesses and technologies.
We expect that we will need to engage in additional financings to fund our operations and satisfy our obligations in the near-term as well as to respond to business challenges and opportunities, including the need to repay the Secured Convertible Notes, provide working capital, develop new features or enhance our products, expand our manufacturing capacity, improve our operating infrastructure, or acquire complementary businesses and technologies.
Cost of 3D Printers also includes allocated overhead costs from headcount-related costs, such as salaries, stock-based compensation, depreciation of manufacturing related equipment and facilities, and information technology costs. Cost of Recurring Payment includes depreciation of the leased equipment over the useful life of five years less the residual value, and an allocated portion of Cost of Support Services.
Cost of 3D Printers also includes allocated overhead costs from headcount-related costs, such as salaries, stock-based compensation, depreciation of manufacturing related equipment and facilities, and information technology costs. 58 Cost of Recurring Payment includes depreciation of the leased equipment over the useful life of five years less the residual value, and an allocated portion of Cost of Support Services.
Significant judgment is used to identify and account for each of the two performance obligations. 3D Printer Sales The Company bills its customers beginning at the time of acceptance of the purchase order (which represents a deposit), with the second billing at the time of shipment and final billing upon site acceptance test completion.
Significant judgment is used to identify and account for each of the two performance obligations. 70 3D Printer Sales The Company bills its customers beginning at the time of acceptance of the purchase order (which represents a deposit), with the second billing at the time of shipment and final billing upon site acceptance test completion.
As a result, the loss of any key customers to adopt our solutions or any significant delay in commercialization of our products could impact our business and future revenue. Customer Concentration Our operating results for the foreseeable future will continue to depend on sales to a small group of customers.
As a result, the loss of any key customers to adopt our solutions or any significant delay in commercialization of our products could impact our business and future revenue. 56 Customer Concentration Our operating results for the foreseeable future will continue to depend on sales to a small group of customers.
As these meet the definition of a derivative, we recorded these warrants within Warrant liabilities on the consolidated balance sheet at fair value, with subsequent changes in their 80 respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.
As these meet the definition of a derivative, we recorded these warrants within Warrant liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.
A subsequent Extended Support Agreement (" ESA ") is available for renewal after the initial period based on the then fair value of the service. 78 Support Services revenue are recognized evenly over the contract period beginning with customer performance test acceptance.
A subsequent Extended Support Agreement (" ESA ") is available for renewal after the initial period based on the then fair value of the service. Support Services revenue are recognized evenly over the contract period beginning with customer performance test acceptance.
The timeframe from order to completion of the site acceptance test occurs typically over three to six months. Revenue 77 for the 3D Printer is recognized at a point-in time, which occurs upon transfer of control to the customer at shipment.
The timeframe from order to completion of the site acceptance test occurs typically over three to six months. Revenue for the 3D Printer is recognized at a point-in time, which occurs upon transfer of control to the customer at shipment.
Our gross profit and gross margin are influenced by a number of factors, including: • Product mix of Sapphire, Sapphire XC, Sapphire 1MZ and Sapphire XC 1MZ systems; • Average selling prices for our systems; • Trends in materials and shipping costs; • Production volumes that may impact factory overhead absorption; • System reliability performance; and • Impact of product mix changes, including new product introductions, and other factors on our Cost of Support Services We expect to accelerate production cycle times and improving efficiencies on the production floor to lower our cost of revenue, which we expect will improve our gross profit and gross margins in the second half of 2024.
Our gross profit and gross margin are influenced by a number of factors, including: • Product mix of Sapphire, Sapphire XC, Sapphire 1MZ and Sapphire XC 1MZ systems; • Average selling prices for our systems; • Trends in materials and shipping costs; • Production volumes that may impact factory overhead absorption; • System reliability performance; and • Impact of product mix changes, including new product introductions, and other factors on our Cost of Support Services We expect to accelerate production cycle times and further improving efficiencies on the production floor to lower our cost of revenue, which we expect will improve our gross profit and gross margins in the second half of 2025.
During the year ended December 31, 2023, there were no Public Warrants or Private Placement Warrants exercised. The Public Warrants are publicly traded and are exercisable for cash, unless certain conditions occur, such as redemption by the Company under certain circumstances, at which time the Public Warrants may be exercised on a cashless basis.
During the year ended December 31, 2024, there were no Public Warrants or Private Placement Warrants exercised. The Public Warrants are publicly traded and are exercisable for cash, unless certain conditions occur, such as redemption by the Company under certain circumstances, at which time the Public Warrants may be exercised on a cashless basis.
See “Risk Factors - Risks Related to Our Business and Industry—Market conditions, economic uncertainty or downturns could adversely affect our business and operating results” and “—We may be adversely affected by the effects of inflation or possible stagflation.” Climate Change Material pending or existing climate change-related legislation, regulations, and international accords, including the SEC's recently adopted climate disclosure rules, could have an adverse effect on our business, financial condition, and results of operations, including: (1) material past and/or future capital expenditures for climate-related projects, (2) material indirect consequences of climate-related regulation or business trends, such as the following: decreased/increased demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources; increased competition to develop innovative new products that result in lower emissions; increased demand for generation and transmission of energy from alternative energy sources; and any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions and (3) material increased compliance costs related to climate change.
See “Risk Factors - Risks Related to Our Business and Industry—Market conditions, economic uncertainty or downturns could adversely affect our business and operating results” and “—We may be adversely affected by the effects of inflation or possible stagflation.” Climate Change Material pending or existing climate change-related legislation, regulations, and international accords could have an adverse effect on our business, financial condition, and results of operations, including: (1) material past and/or future capital expenditures for climate-related projects, (2) material indirect consequences of climate-related regulation or business trends, such as the following: decreased/increased demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources; increased competition to develop innovative new products that result in lower emissions; increased demand for generation and transmission of energy from alternative energy sources; and any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions and (3) material increased compliance costs related to climate change.
Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material 79 impact on the valuation of our common stock. An increase of 100-basis points in interest rates would not have a material impact on our stock-based compensation.
Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations 72 as of each valuation date and may have a material impact on the valuation of our common stock. An increase of 100-basis points in interest rates would not have a material impact on our stock-based compensation.
During the year ended December 31, 2023, the cost of the Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems included lower factory overhead costs to scale up operations, production engineering development costs, and lower costs to expedite shipping for manufacturing materials and assemblies related to supply chain disruption in the global markets.
During the year ended December 31, 2024, the cost of the Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems included lower factory overhead costs to scale up operations, production engineering development costs, and lower costs to expedite shipping for manufacturing materials and assemblies related to supply chain disruption in the global markets.
Other Revenue Revenue is recognized for parts sold to customers independent of the 3D Printer sales or Support Services contract is included with 3D Printer sales. Such revenue is recognized upon transfer of control to the customer. Revenue from parts was not material for the years ended December 31, 2023 and 2022.
Other Revenue Revenue is recognized for parts sold to customers independent of the 3D Printer sales or Support Services contract is included with 3D Printer sales. Such revenue is recognized upon transfer of control to the customer. Revenue from parts was not material for the years ended December 31, 2024 and 2023.
Income Taxes No provision for federal and state income taxes was recorded for any periods presented due to projected losses, and we maintained a full valuation allowance on the deferred tax assets as of December 31, 2023 and 2022.
Income Taxes No provision for federal and state income taxes was recorded for any periods presented due to projected losses, and we maintained a full valuation allowance on the deferred tax assets as of December 31, 2024 and 2023.
We shipped our first Sapphire system to our largest customer in 2018, and as of December 31, 2023, we have shipped to this customer 26 in total (Sapphire and Sapphire XC systems). We expect our largest customer to remain an important relationship going forward.
We shipped our first Sapphire system to our largest customer in 2018, and as of December 31, 2024, we have shipped to this customer 26 in total (Sapphire and Sapphire XC systems). We expect our largest customer to remain an important relationship going forward.
In conjunction with the joinder and fourth loan modification agreement on July 25, 2022, we issued to Silicon Valley Bank warrants to purchase up to 70,000 shares of the Company’s common stock at an exercise price of $2.56 per warrant share (the “2022 Private Warrant”).
In conjunction with the joinder and fourth loan modification agreement on July 25, 2022, we issued to Silicon Valley Bank warrants to purchase up to 2,000 shares of the Company’s common stock at an exercise price of $89.60 per warrant share (the “2022 Private Warrant”).
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. Sales with variable consideration represented 3% of revenue during the year ended December 31, 2023 and 6% of our revenue during year ended December 31, 2022.
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. Sales with variable consideration represented 0% of revenue during the year ended December 31, 2024 and 3% of our revenue during year ended December 31, 2023.
Gain (Loss) on Fair Value of Warrants Gain (loss) on valuation of warrant liabilities relates to the changes in the fair value of warrant liabilities, including liabilities related to the public warrants and private placement warrants, which are subject to remeasurement at each balance sheet date.
Gain (Loss) on Fair Value of Warrants Gain (loss) on valuation of warrant liabilities relates to the changes in the fair value of warrant liabilities, including liabilities related to the public warrants and private placement warrants, which are subject to remeasurement at each balance sheet date. 59 Gain (Loss) on Fair value of Contingent Earnout Liabilities Gain (loss) on valuation of contingent earnout liabilities relates to the changes in the fair value of contingent earnout liabilities related to the Earnout Shares, which are subject to remeasurement at each balance sheet date.
We expect our interest expense will continue to increase as a result of the Secured Notes (for further information, see “ —Liquidity and Capital Resources ” and Note 9, Long-Term Debt , in the notes to the audited consolidated financial statements included elsewhere in this Annual Report).
We expect our interest expense will decrease as a result of reduced debt (for further information, see “ —Liquidity and Capital Resources ” and Note 9, Long-Term Debt , in the notes to the audited consolidated financial statements included elsewhere in this Annual Report).
Recurring Payment, structured as an operating lease, was $1.7 million and $4.2 million for the years ended December 31, 2023 and 2022, respectively. The decrease was primarily attributed to a decrease in the number of 3D Printer systems in service generating Recurring Payment revenue for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Recurring Payment, structured as an operating lease, was $1.1 million and $1.7 million for the years ended December 31, 2024 and 2023, respectively. The decrease was primarily attributed to a decrease in the number of 3D Printer systems in lease generating Recurring Payment revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023.
As of December 31, 2023, over 50% of our customers have multiple Sapphire family of systems. 67 Cost of Revenue The following table presents the Cost of Revenue disaggregated by product and service type, as well as the percentage of total cost of revenue.
As of December 31, 2024, over 50% of our customers have multiple Sapphire family of systems. 62 Cost of Revenue The following table presents the Cost of Revenue disaggregated by product and service type, as well as the percentage of total cost of revenue.
We also expect our Cost of Support Services will increase with the delivery of more 3D Printer systems to customers. Cost of revenue as a percentage of revenue was 133.9% and 98.9% for the years ended December 31, 2023 and 2022, respectively.
We also expect our Cost of Support Services will increase with the delivery of more 3D Printer systems to customers. Cost of revenue as a percentage of revenue was 105.1% and 133.9% for the years ended December 31, 2024 and 2023, respectively.
As we gain experience with Sapphire XC production, we expect to further lower our material costs and reduce labor and overhead expenses per unit. Cost of Recurring Payment was $1.3 million and $2.6 million for the years ended December 31, 2023 and 2022, respectively.
As we gain experience with Sapphire XC production, we expect to further lower our material costs and reduce labor and overhead expenses per unit. Cost of Recurring Payment was $0.9 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and related personnel costs for individuals associated with our executive, administrative, finance, legal, information technology and human resources functions, including stock-based compensation, professional fees for legal, audit and compliance, accounting and consulting services, general corporate costs, facilities, rent, information technology costs, insurance, bad debt expenses and an allocated portion of overhead costs, including equipment and depreciation and other general and administrative expenses. 64 Interest Expense Interest expense primarily consists of interest incurred under our outstanding debt and finance leases.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and related personnel costs for individuals associated with our executive, administrative, finance, legal, information technology and human resources functions, including stock-based compensation, professional fees for legal, audit and compliance, accounting and consulting services, general corporate costs, facilities, rent, information technology costs, insurance, bad debt expenses and an allocated portion of overhead costs, including equipment and depreciation and other general and administrative expenses.
Total revenue for the year ended December 31, 2023 decreased by $1.3 million, or 1.6% from the year ended December 31, 2022. 3D Printer sales were $68.9 million and $69.3 million for the years ended December 31, 2023 and 2022, respectively, which was primarily attributed to an overall decrease in system sales and backlog in the fourth quarter of 2023, offset in part by sales of the higher priced Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ systems throughout the first three quarters of 2023.
Total revenue for the year ended December 31, 2024 decreased by $36.4 million, or 47.1%, from the year ended December 31, 2023. 3D Printer sales were $25.4 million and $68.9 million for the years ended December 31, 2024 and 2023, respectively, which was primarily attributed to an overall decrease in system sales and backlog in the fourth quarter of 2023, offset in part by sales of the higher priced Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ systems throughout the first three quarters of 2023.
In the year ended December 31, 2023, there was a decrease of $4.3 million in research and development expenses primarily due to the completion of the development of the Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems in 2022 and reduction of new research and development projects in 2023 due to our Strategic Realignment.
In the year ended December 31, 2024, there was a decrease of $24.9 million in research and development expenses primarily due to the completion of the development of the Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems in 2023 and reduction of new research and development projects in 2024 due to our Strategic Realignment.
Without such additional funding, we will not be able to continue operations. 60 Key Financial and Operational Metrics We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report titled “ Risk Factors .” We regularly evaluate several metrics, including the metrics presented in the table below, to measure our performance, identify trends affecting our business, prepare financial projections, make strategic decisions and establish performance goals for compensation and we periodically review and revise these metrics to reflect changes in our business. 2023 2022 Revenue ($ in millions) for the year ended December 31 $ 77 $ 79 Bookings ($ in millions) for the year ended December 31 56 71 Backlog ($ in millions) as of December 31 13 43 Bookings ($ in millions): Bookings ($ in millions) are defined as a confirmed order for a 3D printer system in contracted dollars.
Key Financial and Operational Metrics We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report titled “ Risk Factors .” We regularly evaluate several metrics, including the metrics presented in the table below, to measure our performance, identify trends affecting our business, prepare financial projections, make strategic decisions and establish performance goals for compensation and we periodically review and revise these metrics to reflect changes in our business. 2024 2023 Revenue ($ in millions) for the year ended December 31 $ 41 $ 77 Bookings ($ in millions) for the year ended December 31 31 56 Backlog ($ in millions) as of December 31 16 13 Bookings ($ in millions): Bookings ($ in millions) are defined as a confirmed order for a 3D printer system in contracted dollars.
Support services are included with a 3D Printer sale transaction and a recurring payment transaction. For 3D Printer sale transactions where the support service period have expired, customers have purchased extended support service contracts. 3D Printer sale transactions - fall into two categories: a structured fixed purchase price for the system or a sale and utilization (variable consideration) fee model.
For 3D Printer sale transactions where the support service period have expired, customers have purchased extended support service contracts. 3D Printer sale transactions - fall into two categories: a structured fixed purchase price for the system or a sale and utilization (variable consideration) fee model.
Non-cancellable purchase commitments (purchase orders) of $13.0 million for parts and assemblies are due upon receipt and will primarily be delivered in the first half of 2024. If inventory is shipped, we will accrue a liability under accrued expenses. We have no other commitment and contingencies, except 71 for the operating leases.
Non-cancellable purchase commitments (purchase orders) of $3.2 million for parts and assemblies are due upon receipt and will primarily be delivered in 2025. If inventory is shipped, we will accrue a liability under accrued expenses. We have no other commitment and contingencies, except for the operating leases.
The 2022 Private Warrant is exercisable until July 24, 2034 and allow cashless exercise in whole or part. On December 29, 2023, the Company issued warrants to purchase 36,000,000 shares of the Company's stock at an exercise price of $0.57 per warrant share (the "RDO Warrants").
The 2022 Private Warrant is exercisable until July 24, 2034 and allow cashless exercise in whole or part. On December 29, 2023, the Company issued warrants to purchase 1,028,572 shares of the Company's stock at an exercise price of $19.95 per warrant share (the "RDO Warrants").
Following the Merger, 8,625,000 publicly-traded warrants (the “Public Warrants”) and 4,450,000 private placement warrants (the “Private Placement Warrants”), issued to Spitfire Sponsor, LLC (the “Sponsor”), all of which were issued in connection with JAWS Spitfire’s initial public offering (“IPO”), became exercisable for one share of the Company’s Common Stock at an exercise price of $11.50 per share.
Following the Merger, 246,429 publicly-traded warrants (the “Public Warrants”) and 127,143 private placement warrants (the “Private Placement Warrants”), issued to Spitfire Sponsor, LLC (the “Sponsor”), all of which were issued in connection with JAWS Spitfire’s initial public offering (“IPO”), became exercisable for one share of the Company’s Common Stock at an exercise price of $402.50 per share.
We continue to focus on reducing our material costs through improved purchasing and inventory planning, accelerating production cycle times and improving efficiencies on the production floor to lower our cost of revenue. We expect our cost of revenue to improve as we address the challenges that impact our production.
We continue to focus on reducing our material costs through improved purchasing and inventory planning, accelerating production cycle times and improving efficiencies on the production floor to lower our cost of revenue.
Financing Activities Net cash provided by financing activities during the year ended December 31, 2023 was $59.3 million, consisting of proceeds of $65.7 million from the issuance of the Secured Convertible Notes, net of issuance costs, proceeds of $57.1 million from the Secured Notes, net of issuance costs, proceeds of $22.8 million from the issuance of common stock, net of issuance costs, pursuant to the ATM Offering, proceeds from the Registered Direct Offering, net of issuance costs of $16.3 million, proceeds of $14.0 million drawn from the prior revolver facility under the Loan Agreement, proceeds of $1.6 million drawn from the prior secured equipment loan facility under the Loan Agreement and proceeds of $0.6 million from the issuance of common stock upon exercise of stock options, partially offset by $69.9 million in repayment of the Secured Convertible Notes, $25.0 million in repayment of the Secured Notes, $17.0 million in repayment of the revolver facility, and $7.0 million in repayment of equipment loans.
Net cash provided by financing activities during the year ended December 31, 2023 was $59.3 million, consisting of proceeds of $65.7 million from the issuance of the Secured Convertible Notes, net of issuance costs, proceeds of $57.1 million from the Secured Notes, net of issuance costs, proceeds of $22.8 million from the issuance of common stock, net of issuance costs, pursuant to the ATM Offering, proceeds from the Registered Direct Offering, net of issuance costs of $16.3 million, proceeds of $14.0 million drawn from the prior revolver facility under the Loan Agreement, proceeds of $1.6 million drawn from the prior secured equipment loan facility under the Loan Agreement and proceeds of $0.6 million from the issuance of common stock upon exercise of stock options, partially offset by $69.9 million in repayment of the Secured Convertible Notes, $25.0 million in repayment of the Secured Notes, $17.0 million in repayment of the revolver facility, and $7.0 million in repayment of equipment loans. 68 We expect cash provided by financing activities to increase by issuing new equity or incurring new debt to continue operations, subject to our compliance with the covenants in the Secured Notes.
Selling and Marketing Expenses Selling and marketing expenses were $23.2 million and $23.9 million for the years ended December 31, 2023 and 2022, respectively. There was a decrease of $0.7 million for the year ended December 31, 2023 as compared to 2022.
Selling and Marketing Expenses Selling and marketing expenses were $13.8 million and $23.2 million for the years ended December 31, 2024 and 2023, respectively. There was a decrease of $9.4 million for the year ended December 31, 2024 as compared to 2023.
Other Income (Expense), Net Other income (expense), net was $0.5 million and $1.5 million for the years ended December 31, 2023 and 2022, respectively.
Other Income (Expense), Net Other income (expense), net was $(3.6) million and $0.5 million for the years ended December 31, 2024 and 2023, respectively.
We may also seek to raise additional capital, including from offerings of our equity or debt securities, on an opportunistic basis when we believe there are suitable opportunities for doing so.
We may also seek to raise additional capital, including from offerings of our equity or debt securities, on an opportunistic basis when we believe there are suitable opportunities for doing so. Without such additional funding, we will not be able to continue operations.
We will remain an emerging growth company under the JOBS Act until the earliest of (a) December 31, 2025, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.07 billion, (c) the last date of our fiscal year in which we are deemed to be a “large accelerated filer” under the rules of the SEC or (d) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the previous three years. 76 Implications of Being a Smaller Reporting Company We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
We will remain an emerging growth company under the JOBS Act until the earliest of (a) December 31, 2025, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the last date of our fiscal year in which we 69 are deemed to be a “large accelerated filer” under the rules of the SEC or (d) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the previous three years.
Additionally, the Company issued warrants to purchase 1,800,000 shares of the Company's stock at an exercise price of $0.62 per warrant share (the "Placement Agent Warrants" and together with the Public Warrants, the Private Placement Warrants, the 2022 Private Warrant, and the RDO Warrants the “Common Stock Warrants”).
Additionally, the Company issued warrants to purchase 51,429 shares of the Company's stock at an exercise price of $21.70 per warrant share (the "Placement Agent Warrants" and together with the Public Warrants, the Private Placement Warrants, the 2022 Private Warrant, and the RDO Warrants the “Common Stock Warrants”).
Other revenue was not material for the years ended December 31, 2023 and 2022. 63 Cost of Revenue Our cost of revenue includes the “ Cost of 3D Printers ,” “ Cost of Recurring Payment ” and “ Cost of Support Services .” Cost of 3D Printers includes the manufacturing cost of our components and subassemblies purchased from vendors for the assembly, as well as raw materials and assemblies, shipping costs and other directly associated costs.
Cost of Revenue Our cost of revenue includes the “ Cost of 3D Printers ,” “ Cost of Recurring Payment ” and “ Cost of Support Services .” Cost of 3D Printers includes the manufacturing cost of our components and subassemblies purchased from vendors for the assembly, as well as raw materials and assemblies, shipping costs and other directly associated costs.
Equipment leased to customers are considered long-lived assets and are tested for impairment as described below under the heading “ Impairment of Long-lived Assets . ” Support Services Support Services are field service engineering, phone and email support, preventative maintenance, and limited on and off-site consulting support.
Warranty accruals were not material as of December 31, 2024 or December 31, 2023. 71 Equipment leased to customers are considered long-lived assets and are tested for impairment as described below under the heading “ Impairment of Long-lived Assets . ” Support Services Support Services are field service engineering, phone and email support, preventative maintenance, and limited on and off-site consulting support.
The cash used from operating assets was primarily comprised of increases in inventories of $47.0 million for Sapphire and Sapphire XC system production, contract liabilities of $7.1 million, contract assets of $6.5 million, and an increase from other net operating assets of $4.0 million, partially offset by accrued expenses and other current liabilities of $6.4 million, prepaid expenses and other current assets of $6.1 million related to insurance and vendor prepayments, accounts receivable of $3.2 million due to timing of customer payments, and accounts payable of $2.3 million.
The cash used from operating assets was primarily comprised of accounts payable of $0.1 million, accrued expenses and other current liabilities of $2.6 million, and other noncurrent liabilities of $2.2 million, partially offset by a decrease in inventories of $13.3 million for Sapphire and Sapphire XC system production, contract assets of $7.0 million, accounts receivable of $5.9 million, contract liabilities of $5.2 million, other assets of $4.0 million, and prepaid expenses and other current assets of $1.8 million related to insurance and vendor prepayments.
The decrease in research and development expenses in 2023 were related to a $0.7 million decrease for headcount, salaries and employee-related expenses, a $3.4 million decrease in product development expenses for the Sapphire family of systems, and a $1.8 million decrease in components design and engineering testing and 69 validation for the Sapphire XC and development expenses for the product development of the 1MZ larger build volumes for our Sapphire systems, offset by a $1.6 million increase in stock-based compensation.
The decrease in research and development expenses in 2024 were related to a $8.2 million decrease for headcount, salaries and employee-related expenses, a $7.1 million decrease in stock-based compensation, a $5.0 million decrease in product development expenses for the Sapphire family of systems, and a $1.3 million decrease in components design and engineering testing and validation for the Sapphire XC and development expenses for the product development of the 1MZ larger build volumes for our Sapphire systems, a $1.2 million decrease in professional fees and a $2.1 million decrease in other miscellaneous expenses.
Cost of 3D Printers was $94.4 million and $68.3 million, for the years ended December 31, 2023 and 2022, respectively.
Cost of 3D Printers was $34.2 million and $94.4 million, for the years ended December 31, 2024 and 2023, respectively.
Cost of Support Services was $8.0 million and $7.0 million, for the years ended December 31, 2023 and 2022, respectively. This increase of $1.0 million was primarily attributable to the costs for preventative maintenance, costs incurred to enhance system reliability performance, and field service engineering labor costs due to more 3D Printers in service in 2023 compared to 2022.
This increase of $0.1 million was primarily attributable to the costs for preventative maintenance, costs incurred to enhance system reliability performance, and field service engineering labor costs due to more 3D Printers in service in 2024 compared to 2023.
Research and Development Expenses Research and development expenses were $42.0 million and $46.3 million for the years ended December 31, 2023 and 2022, respectively.
Research and Development Expenses Research and development expenses were $17.1 million and $42.0 million for the years ended December 31, 2024 and 2023, respectively.
General and Administrative General and administrative expenses were $41.7 million and $37.0 million for the years ended December 31, 2023 and 2022, respectively.
General and Administrative General and administrative expenses were $49.3 million and $41.7 million for the years ended December 31, 2024 and 2023, respectively.
Gain on Fair Value of Warrants The change in fair value of warrants resulted in a gain of $2.3 million, and $19.1 million for the years ended December 31, 2023 and 2022, respectively, and were related to the non-cash fair value change of the warrant liabilities. 70 Gain on Fair value of Contingent Earnout Liabilities The change in fair value of the contingent earnout liability was a gain of $16.0 million and $94.1 million for the year ended December 31, 2023 and 2022, respectively, and were related to the non-cash fair value change of the contingent earnout liabilities.
Gain on Fair value of Contingent Earnout Liabilities The change in fair value of the contingent earnout liability was a gain of $1.4 million and $16.0 million for the year ended December 31, 2024 and 2023, respectively, and were related to the non-cash fair value change of the contingent earnout liabilities.
Most of our leases have a 12-month term, though in certain cases the lease term is longer. The Recurring Payment transactions, which are structured as operating leases, were 2.2% and 5.3% of revenue for the years ended December 31, 2023 and 2022, respectively.
For usage above that level, the customer typically pays an hourly usage fee. Most of our leases have a 12-month term, though in certain cases the lease term is longer. The Recurring Payment transactions, which are structured as operating leases, were 2.6% and 2.2% of revenue for the years ended December 31, 2024 and 2023, respectively.
The Company has elected not to recognize shipping to customers as a separate performance obligation. Revenue from shipping billed to customers for the years ended December 31, 2023 and 2022 was not material.
As of December 31, 2024, the Company has discontinued the Variable Consideration revenue model on a go-forward basis. The Company has elected not to recognize shipping to customers as a separate performance obligation. Revenue from shipping billed to customers for the years ended December 31, 2024 and 2023 was not material.
To the extent that our actual operating results or other developments differ from our expectations, our liquidity could be adversely affected. As described above, we are undertaking expense reduction and cash savings initiatives as part of a company-wide restructuring and strategic realignment plan to help conserve working capital.
To the extent that our actual operating results or other developments differ from our expectations, our liquidity could be adversely affected. We continue to undertake expense reduction and cash savings initiatives as part of an on-going company-wide initiative to help conserve working capital.
Income Taxes No provision for federal and state income taxes was recorded because we incurred income tax losses for the years ended December 31, 2023 and 2022 and maintained a full valuation allowance on the deferred tax assets as of December 31, 2023 and 2022.
Income Taxes No provision for federal and state income taxes was recorded because we incurred income tax losses for the years ended December 31, 2024 and 2023 and maintained a full valuation allowance on the deferred tax assets as of December 31, 2024 and 2023. 65 We will continue to review our conclusions about the appropriate amount of the valuation allowance on a quarterly basis.
The increase of $4.7 million in the year ended December 31, 2023 in general and administrative expenses as compared to 2022 was attributable to, a $2.8 million increase in additional headcount, salaries and employee-related benefits, a $1.8 million increase in public company related expenses for advisory, legal and accounting fees and insurance, and a $0.1 million increase in facilities expenses.
The increase of $7.6 million in the year ended December 31, 2024 in general and administrative expenses as compared to 2023 was attributable to a $13.2 million increase in bad debt expense and a $4.4 million increase in public company related expenses for advisory, legal and accounting fees and insurance, offset by a $5.3 million decrease in headcount, salaries and employee-related benefits, a $0.5 million decrease in travel expenses, a $0.3 million decrease in depreciation, a $3.6 million decrease in facilities expenses and a $0.3 million decrease in miscellaneous expenses.
Gross Profit and Gross Margin Total gross profit was $(26.3) million and $0.8 million for the years ended December 31, 2023 and 2022, respectively. As a percentage of revenue, the gross margin was (33.9)% and 1.1% for the years ended December 31, 2023 and 2022, respectively.
As a percentage of revenue, the gross margin was (5.1)% and (33.9)% for the years ended December 31, 2024 and 2023, respectively.
Notwithstanding the recent debt and equity transactions, as described in “ —Liquidity and Capital Resources ” and in Note 1 Description of Business and Basis of Presentation—Going Concern, Financial Condition and Liquidity and Capital Resources in the notes to the audited consolidated financial statements included elsewhere in this Annual Report, there continues to be a substantial doubt about our ability to continue as a going concern.
We consider this approach a “land and expand” strategy, oriented around a demonstration of our value proposition followed by increasing penetration with key customers. 54 Recent Developments Recent Debt and Equity Transactions and Change in Majority Ownership Notwithstanding the recent debt and equity transactions, as described in “ —Liquidity and Capital Resources ” and in Note 1 Description of Business and Basis of Presentation—Going Concern, Financial Condition and Liquidity and Capital Resources in the notes to the audited consolidated financial statements included elsewhere in this Annual Report, there continues to be a substantial doubt about our ability to continue as a going concern.
The increase of $26.2 million was due a $27 million increase in Cost of 3D printers related to the valuation of inventory for the year ended December 31, 2023, offset by a decrease in the number of 3D Printers sold, which included both Sapphire and Sapphire XC systems, compared to the number of 3D Printers sold for the year ended December 31, 2022.
The decrease of $60.3 million was primarily due to a decrease in the number of 3D Printers sold, which included both Sapphire and Sapphire XC systems, compared to the number of 3D Printers sold for the year ended December 31, 2023.
The warrant agreement governing the Public Warrants and Private Placement Warrants includes a provision, the application of which could result in a different settlement value for the Common Stock Warrants depending on their holder.
The Company evaluated the Common Stock Warrants, and concluded that they all do not meet the criteria to be classified within stockholders’ equity. The warrant agreement governing the Public Warrants and Private Placement Warrants includes a provision, the application of which could result in a different settlement value for the Common Stock Warrants depending on their holder.
We expect our Support Service revenue to increase as the number of systems we have in the field increases. As of December 31, 2023, our backlog for firm orders was $13 million for 3D Printers.
We expect Recurring Payment revenue to remain flat or decrease as we continue to shift our focus to 3D Printer system sales. We expect our Support Service revenue to increase as the number of systems we have in the field increases. As of December 31, 2024, our backlog for firm orders was $16 million for 3D Printers.
The contingent earnout liability is categorized as a Level 3 fair value measurement (see “Fair Value Measurements” as described above) because the Company estimates projections during the Earnout Period utilizing unobservable inputs. Contingent earnout liabilities involve certain assumptions requiring significant judgment and actual results may differ from assumed and estimated amounts.
The contingent earnout liability is categorized as a Level 3 fair value measurement (see “Fair Value Measurements” as described above) because the Company estimates projections during the Earnout Period utilizing unobservable inputs.
We define our Recurring Payment transactions as operating leases. Under the leased 3D Printer transaction, the customer typically pays an amount for a lease which entitles the customer to a base number of hours of usage. For usage above that level, the customer typically pays an hourly usage fee.
This allocation involves judgement and is periodically updated as new relevant information becomes available. Recurring payment transactions - are our leased 3D Printer transactions. We define our Recurring Payment transactions as operating leases. Under the leased 3D Printer transaction, the customer typically pays an amount for a lease which entitles the customer to a base number of hours of usage.
We expect a benefit to be recorded in the period the valuation allowance reversal is recorded and a higher effective tax rate in periods following the valuation allowance reversal.
If we were to generate profits in 2024 and beyond, the U.S. valuation allowance position could be reversed in the foreseeable future. We expect a benefit to be recorded in the period the valuation allowance reversal is recorded and a higher effective tax rate in periods following the valuation allowance reversal.
We continue to focus on our company-wide initiatives to reduce operating costs for 2024 as we continue to implement our Strategic Realignment by reducing our general and administrative expenses through reducing our reliance on outside consultants, managing facility costs and negotiating with vendors for improved pricing.
We continue to focus on our company-wide initiatives to reduce operating costs for 2025 as we reduce our general and administrative expenses through reducing our reliance on outside consultants, managing facility costs and negotiating with vendors for improved pricing. Interest Expense Interest expense was $16.0 million and $9.7 million, for the years ended December 31, 2024 and 2023, respectively.
For the years ended December 31, 2023 and 2022, sales to the top three customers accounted for 24.5% and 48.5% of our revenue, respectively.
For the years ended December 31, 2024 and 2023, sales to the top three customers accounted for 47.0% and 24.5% of our revenue, respectively. Of the top three customers for the year ended December 31, 2024, all three customers were different from the top three customers for the comparable period in 2023.
In 2022, supply chain challenges increased our material and shipping costs, resulted in shipping delays and impacted our gross margins. In 2023, we implemented a number of supply chain and manufacturing improvements in response and intend to continue to focus on driving further operational improvements during 2024 as well as our Strategic Realignment to reduce operating costs.
In 2024, we implemented a number of supply chain and manufacturing improvements in response and intend to continue to focus on driving further operational improvements during 2025 to reduce operating costs.
Interest Expense Interest expense was $9.7 million and $0.4 million, for the years ended December 31, 2023 and 2022, respectively. In the year ended December 31, 2023, there was an increase of $9.3 million attributable to increases in outstanding debt balances, attributable to the Notes.
In the year ended December 31, 2024, there was an increase of $6.3 million attributable to increases in outstanding debt balances, attributable to the Notes.
Off-Balance Sheet Arrangements As of December 31, 2023 and 2022, we did not have any off-balance sheet arrangements. 75 Contractual Obligations The table below summarizes our contractual obligations as of December 31, 2023: Payments Due by Period Less than 1 year 1 – 3 years 3 – 5 years Total (In thousands) Operating leases $ 2,806 $ 7,162 $ 11,269 $ 21,237 Debt principal, interest and fees 31,500 12,500 — 44,000 Purchase commitments 13,000 — — 13,000 Total contractual cash obligations $ 47,306 $ 19,662 $ 11,269 $ 78,237 Purchase commitments (purchase orders) of $13.0 million for parts and assemblies are non-cancellable and are due upon receipts with standard payment terms and will be delivered throughout 2024.
Contractual Obligations The table below summarizes our contractual obligations as of December 31, 2024: Payments Due by Period Less than 1 year 1 – 3 years 3 – 5 years Total (In thousands) Operating leases $ 2,390 $ 7,320 $ 8,779 $ 18,489 Debt principal, interest and fees 5,993 — — 5,993 Purchase commitments 3,200 — — 3,200 Total contractual cash obligations $ 11,583 $ 7,320 $ 8,779 $ 27,682 Purchase commitments (purchase orders) of $3.2 million for parts and assemblies are non-cancellable and are due upon receipts with standard payment terms and will be delivered throughout 2025.
We expect general and administrative expenses to decrease as a result of one-time charges incurred in 2023 related to personnel and other charges of $1.2 million from our reduction in force and charges to consolidate our facilities of approximately $2.5 million.
We expected general and administrative expenses to increase as a result of one-time charges incurred in 2024 related to bad debt of $13.2 million, which would offset a decrease from our reduction in force, and facilities expenses.
Contracts for 3D Printers also include post-sale customer support services (“ Support Services ”), except for our distributor partners, which are qualified to perform support services. 62 We sell our fully integrated hardware and software AM solutions through two types of transaction models: a 3D Printer sale transaction and a recurring payment transaction (" Recurring Payment ").
We sell our fully integrated hardware and software AM solutions through two types of transaction models: a 3D Printer sale transaction and a recurring payment transaction (" Recurring Payment "). Support services are included with a 3D Printer sale transaction and a recurring payment transaction.
Sapphire, Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ metal AM printer using our L-PBF technology and Assure quality validation software (collectively referred to as the “ 3D Printer ”).
Sapphire, Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ metal AM printer using our L-PBF technology and Assure 57 quality validation software (collectively referred to as the “ 3D Printer ”). Contracts for 3D Printers also include post-sale customer support services (“ Support Services ”), except for our distributor partners, which are qualified to perform support services.
Net cash used in operating activities for the year ended December 31, 2022 was $124.0 million, consisting primarily of a net income of $10.0 million, cash used from net operating assets of $46.6 million, and non cash charges of $87.4 million.
Net cash used in operating activities for the year ended December 31, 2023 was $105.6 million, consisting primarily of a net loss of $135.1 million, cash used from net operating assets of $1.2 million, and noncash charges of $28.3 million.
During the year ended December 31, 2023, we experienced less revenue growth than expected due to the impact of delayed shipments and customer order delays, resulting in an overall decrease in system sales and backlog in the fourth quarter of 2023.
See Note 8, Leases , in the notes to the audited consolidated financial statements included elsewhere in this Annual Report for further discussion. During the year ended December 31, 2024, we experienced less revenue than expected due to the impact of delayed shipments and customer order delays, resulting in an overall decrease in system sales.
Net cash provided by financing activities during the year ended December 31, 2022 was $1.3 million, consisting of repayments of $8.1 million for loan refinance, and repayments of $0.9 million for property and equipment loans, partially offset by $6.7 million of proceeds from the loan refinance, $2.4 million proceeds from new equipment loans, and $1.2 million of proceeds from the issuance of common stock upon exercise of stock options.
Financing Activities Net cash provided by financing activities during the year ended December 31, 2024 was $1.5 million, consisting of proceeds of $10.7 million from capital raise, net of issuance costs, $1.7 million proceeds from the August Warrant Inducement capital raise, $0.5 million of proceeds from secured notes, net of issuance costs, and $0.3 million of proceeds from issuance of common stock upon exercise of stock options, partially offset by $11.7 million from the repayment of Secured Notes.
Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited consolidated financial statements. We may continue to be a smaller reporting company even after we are no longer an emerging growth company.
Implications of Being a Smaller Reporting Company We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited consolidated financial statements.
The variable payments are recognized when the event determining the amount of variable consideration to be paid occurs. Sales with variable consideration represented 3% of revenue during the year ended December 31, 2023 and 6% of our revenue during year ended December 31, 2022. For more information, see “ —Critical Accounting Policies and Significant Estimates—Revenue – Variable Consideration ” below.
The variable payments are recognized when the event determining the amount of variable consideration to be paid occurs. Sales with variable consideration represented 0% of revenue during the year ended December 31, 2024 and 3% of our revenue during year ended December 31, 2023. Starting in 2023, we have phased out the sale and utilization fee model.
This decrease of $1.3 million was due to a decrease in depreciation of the equipment on lease and allocable Cost of Support Services as a result of less 3D Printers in service in 2023 compared to 2022. Additionally, as discussed previously, three Recurring Payment revenue systems were converted to 3D Printer sales during 2023.
This decrease of $0.4 million was due to a decrease in depreciation of the equipment on lease and allocable Cost of Support Services as a result of less 3D Printers in service in 2024 compared to 2023. Cost of Support Services was $8.1 million and $8.0 million, for the years ended December 31, 2024 and 2023, respectively.
For more information, see Note 9, Long-Term Debt , in the notes to the audited consolidated financial statements included elsewhere in this Annual Report for further discussion. 73 Cash Flow Summary The following table summarizes our cash flows for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Change (In thousands) Net cash used in operating activities $ (105,636) $ (123,962) $ 18,326 Net cash provided by (used in) investing activities 38,891 (53,022) 91,913 Net cash provided by financing activities 59,261 1,342 57,919 Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $105.6 million, consisting primarily of a net loss of $135.1 million, cash used from net operating assets of $1.2 million, and non cash charges of $28.3 million.
Cash Flow Summary The following table summarizes our cash flows for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Change (In thousands) Net cash used in operating activities $ (32,677 ) $ (105,636 ) $ 72,959 Net cash provided by investing activities 7,767 38,891 (31,124 ) Net cash provided by financing activities 1,460 59,261 (57,801 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $32.7 million, consisting primarily of a net loss of $73.3 million, cash used from net operating assets of $31.5 million, and non cash charges of $9.1 million.
Year Ended December 31, 2023 2022 Change % Cost of Revenue (in thousands, except percentages) Cost of 3D Printers $ 94,448 91.1 % $ 68,253 87.6 % $ 26,195 38.4 % Cost of Recurring Payment 1,291 1.2 % 2,612 3.4 % (1,321) (50.6) % Cost of Support Services 7,971 7.7 % 6,998 9.0 % 973 13.9 % Total Cost of Revenue $ 103,710 100.0 % $ 77,863 100.0 % $ 25,847 33.2 % Total cost of revenue for the years ended December 31, 2023 and 2022 was $103.7 million and $77.9 million, respectively, an increase of $25.8 million, or 33.2%.
Year Ended December 31, 2024 2023 Change % Cost of Revenue (in thousands, except percentages) Cost of 3D Printers $ 34,159 79.3 % $ 94,448 91.1 % $ (60,289 ) (63.8 )% Cost of Recurring Payment 866 2.0 % 1,291 1.2 % (425 ) (32.9 )% Cost of Support Services 8,063 18.7 % 7,971 7.7 % 92 1.2 % Total Cost of Revenue $ 43,088 100.0 % $ 103,710 100.0 % $ (60,622 ) (58.5 )% Total cost of revenue for the years ended December 31, 2024 and 2023 was $43.1 million and $103.7 million, respectively, a decrease of $60.6 million, or 58.5%.
Year Ended December 31, 2023 2022 Change % (in thousands, except percentages) 3D Printer sales $ 68,938 89.0 % $ 69,295 88.0 % $ (357) (0.5) % Recurring payment 1,676 2.2 % 4,161 5.3 % (2,485) (59.7) % Support services 6,829 8.8 % 5,250 6.7 % 1,579 30.1 % Total Revenue $ 77,443 100.0 % $ 78,706 100.0 % $ (1,263) (1.6) % Total revenue for the years ended December 31, 2023 and 2022 was $77.4 million and $78.7 million respectively.
Year Ended December 31, 2024 2023 Change % (in thousands, except percentages) 3D Printer sales $ 25,368 61.9 % $ 68,938 89.0 % $ (43,570 ) (63.2 )% Recurring payment 1,054 2.6 % 1,676 2.2 % (622 ) (37.1 )% Support services 9,581 23.4 % 6,829 8.8 % 2,752 40.3 % Other 5,000 12.1 % — — % 5,000 NS Total Revenue $ 41,003 99.9 % $ 77,443 100.0 % $ (36,440 ) (47.1 )% Total revenue for the years ended December 31, 2024 and 2023 was $41.0 million and $77.4 million, respectively.
The increase was primarily attributed to an increase in the number of 3D Printer systems in service as of December 31, 2023 compared to the number of 3D Printers in service as of December 31, 2022. As part of our Strategic Realignment, we have implemented new go-to-market and service strategies to rebuild our bookings and backlog pipeline.
As part of our Strategic Realignment, we have implemented new go-to-market and service strategies to rebuild our bookings and backlog pipeline. As we rebuild our bookings and backlog, we expect the demand for the Sapphire, Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ to increase our revenue in the future.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item. 81
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.

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