10q10k10q10k.net

What changed in Velo3D, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Velo3D, Inc.'s 2024 and 2025 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 2025 report.

+519 added−417 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Velo3D, Inc.'s 2025 10-K

519 paragraphs added · 417 removed · 299 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

53 edited+43 added−42 removed29 unchanged
Biggest changeAs 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.
Biggest changeAccelerate 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 addition to acquiring new customers, we believe a significant driver of international expansion will be the geographic growth of our existing customer base.
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.
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.
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.
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.
We believe that our future success depends on our ability to provide high-quality solutions, introduce new products and services to meet evolving customer needs, market opportunities, and extend our technologies to new applications. Accordingly, our ongoing R&D programs are intended to enable us to continue technology advancement and develop innovative new solutions for the marketplace.
We 12 believe that our future success depends on our ability to provide high-quality solutions, introduce new products and services to meet evolving customer needs, market opportunities, and extend our technologies to new applications. Accordingly, our ongoing R&D programs are intended to enable us to continue technology advancement and develop innovative new solutions for the marketplace.
Additionally, we have increased headcount of our customer service and quality teams to provide on-site support in all major metropolitan areas. Through reliability improvements, system uptime for key customers has increased and we have reduced the time it takes to resolve customer issues.
Through reliability improvements, system uptime for key customers has increased and we have reduced the time it takes to resolve customer issues. We have increased headcount of our customer service and quality teams to provide on-site support in all major metropolitan areas.
Intelligent Fusion Intelligent Fusion is the underlying manufacturing process that binds and facilitates all aspects of the Velo3D fully integrated solution, which includes our print preparation software (Flow), advanced metal 3D printers (Sapphire line), and quality assurance software (Assure).
Intelligent Fusion Intelligent Fusion is the underlying manufacturing process that binds and facilitates all aspects of the Velo3D fully integrated solution, which includes our print preparation software (Flow), advanced metal 3D printers (Sapphire line), and quality assurance 15 software (Assure).
Bribery Act and the anti-corruption laws of other countries; • laws pertaining to the hiring, treatment, safety and discharge of employees; and • import and trade restrictions and export control regulations, including the U.S. International Traffic in Arms Regulations and the U.S. Export Administration Regulations.
Bribery Act and the anti-corruption laws of other countries; 18 • laws pertaining to the hiring, treatment, safety and discharge of employees; and • import and trade restrictions and export control regulations, including the U.S. International Traffic in Arms Regulations and the U.S. Export Administration Regulations.
The content of our websites and information that we may post on or provide to online and social media channels, including those mentioned above, and information that can be accessed through our websites or these online and social media channels are not incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any references to our websites or these online and social media channels are intended to be inactive textual references only. 18
The content of our websites and information that we may post on or provide to online and social media channels, including those mentioned above, and information that can be accessed through our websites or these online and social media channels are not incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any references to our websites or these online and social media channels are intended to be inactive textual references only. 20
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 rely on our own sales team, as well as multiple distribution partners, including Taiyo Nippon Sanso (Japan), and SBO (Austria). These relationships have helped to extend our reach into overseas markets and essentially function as extensions of our sales team.
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.
Human Capital Resources We have a strong team of employees who contribute to our success. As of December 31, 2025 and 2024, we had 134 and 105 full-time employees, respectively, the majority of them based at our headquarters and manufacturing facility in Fremont, California.
Sapphire, Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ The Sapphire printer system is our first generation production machine. Sapphire uses L-PBF technology and supports a build module of 315 millimeter diameter by 400 millimeter tall, and volume of up to 31 liters. Sapphire XC is our second generation of printers and started shipping at the end of 2021.
Sapphire, Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ The Sapphire printer system is our first generation production machine. Sapphire uses L-PBF technology and supports a build module of 315 millimeter diameter by 400 millimeter tall, and volume of up to 31 liters. Sapphire XC is our second generation of printers.
Our own manufacturing operations are primarily limited to final assembly, testing and shipment. Further, we believe our units are higher value and lower volume relative to other AM solutions providers, which reduces the burden on our supply chain as we expand. Our final assembly process does not require expensive clean rooms but instead occurs within an assembly facility.
Further, we believe our units are higher value and lower volume relative to other AM solutions providers, which reduces the burden on our supply chain as we expand. Our final assembly process does not require expensive clean rooms but instead occurs within an assembly facility.
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 .
Information contained on our website or connected thereto does not constitute part of, and is not incorporated by reference into, this Annual Report. 19 Available Information We file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the " SEC ").
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.
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 Sapphire XC printer system is designed with the intent that all recipes and parts designed for the original Sapphire printers are fully compatible with the Sapphire XC printer systems, as the new system line is designed to carry over processes and metrologies.
The Sapphire XC printer system is designed so that all recipes and parts designed for the original Sapphire printers are fully compatible with the Sapphire XC printer systems, as the new system line is designed to carry over processes and metrologies. The Sapphire 1MZ and Sapphire XC 1MZ systems have the same functionality as the Sapphire and Sapphire XC, respectively.
We have built these relationships by demonstrating the value that our differentiated technology can achieve and integrating our solutions into their operations, resulting in repeat sales to multiple customers within a short span of time. Our success in partnering with existing customers has also validated our differentiated technology for other potential customers.
We have built these relationships by demonstrating the value that our differentiated technology can achieve and integrating our solutions into their operations, resulting in repeat sales to multiple customers within a short span of time.
In addition to greater design freedom, our technology allows customers to consolidate assemblies of multiple metal parts into a single part that delivers a consistently stronger, lighter, better performing part at a lower cost than possible through traditional metal manufacturing techniques, while consistently maintaining the applicable density requirement for industrial metal portions of metallic 3D objects.
In addition to greater design freedom, our technology allows customers to consolidate assemblies of multiple metal parts into a single part that delivers a consistently stronger, lighter, better performing part at a lower cost than possible through traditional metal manufacturing techniques.
The acronym XC stands for “extra capacity” and as compared to Sapphire, has a larger build module of 600 millimeter diameter by 550 millimeter tall, and volume of up to 155 liters. Sapphire XC is based on the same fundamental design of our original Sapphire 3D printers.
The acronym XC stands for “extra capacity” and as compared to Sapphire, has a larger build module of 600 millimeter diameter by 550 millimeter tall, and volume of up to 155 liters.
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.
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 believe principal competitive factors include technology capabilities, materials, process and application know-how, total cost of operation of solution, product reliability and the ability to provide a full range of products and services to meet customer needs.
Additionally, certain of our competitors are well established and may have greater financial resources than us. We believe principal competitive factors include technology capabilities, materials, process and application know-how, total cost of operation of solution, product reliability and the ability to provide a full range of products and services to meet customer needs.
Ensuring customer success We adopt a two-step approach to customer relationships, whereby we first aim to validate our technology with customers before working to more fully integrate our technology into customers’ designs and/or production processes.
Instead, we prioritize applications where customers require both technical complexity and production scalability, which we believe supports long-term customer relationships and sustainable margins. Ensuring customer success We adopt a two-step approach to customer relationships, whereby we first aim to validate our technology with customers before working to more fully integrate our technology into customers’ designs and/or production processes.
We compete with these suppliers, as well as channel partners, for customers, and for certain of our products. We also compete with businesses and service bureaus that use such equipment to produce models, prototypes, molds and end-user parts. Development of new technologies or techniques not encompassed by the patents that we own may result in additional future competition.
We also compete with businesses and service bureaus that use such equipment to produce models, prototypes, molds and end-user parts. Development of new technologies or techniques not encompassed by the patents that we own may result in additional future competition. Our competitors operate both globally and regionally, and many of them have well-recognized brands and product lines.
Intellectual Property Our leadership in the high-value metal parts AM segment depends largely on our differentiated technology, which we seek to protect through a multi-layered IP approach.
We manage our inventory based on sales and production forecasts and anticipated lead times for sourcing components and assembly. 17 Intellectual Property Our leadership in the high-value metal parts AM segment depends largely on our differentiated technology, which we seek to protect through a multi-layered IP approach.
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.
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.
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. Support services are included with a 3D Printer sale transaction and a recurring payment transaction.
Customers frequently expand deployments over time as additive manufacturing becomes embedded within production programs. 10 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. Support services are included with both transaction types.
Sales and Marketing We sell our AM solutions directly, as well as through a network of multiple distribution partners. Together, these relationships span much of the world, including the United States, the EU, Australia, Japan, South Korea and Southeast Asia.
For the years ended December 31, 2025 and 2024, our R&D expenses were approximately $10.7 million and $15.5 million, respectively. Sales and Marketing We sell our AM solutions directly, as well as through a network of multiple distribution partners. Together, these relationships span much of the world, including the United States, the EU, Australia, and Japan.
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.
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. Our machines have the ability to make parts from various metals including aluminum, titanium, nickel-alloys, nickel super alloys, copper alloys, stainless steel and steel alloys.
Our sales team remains engaged with customers after initial validation of our technology with a goal of integrating our technology into other customer processes. Thus far, we believe this strategy has proven successful.
Our sales and customer service team consists of 28 employees remains engaged with customers after initial validation of our technology with a goal of integrating our technology into other customer processes.
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. 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.
To that end, our engineers engage with customers to identify the specific parts and processes where our solutions can add the most immediate value.
Our marketing strategy is oriented around building deep and lasting relationships with leading global manufacturers. We seek to compete by maximizing the value we create for our customers. To that end, our engineers engage with customers to identify the specific parts and processes where our solutions can add the most immediate value.
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.
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. Focus on uncontested segments of the market We focus our sales efforts on customers with a need for high-performance metal parts that require both complex geometries and reliable production scalability.
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. 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.
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. 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.
We maintain legal title of our software systems for products sold under both our 3D printer sale transactions and recurring payment transactions. Flow Flow software powers the whole family of Sapphire AM printers. Our systems rely on a similar manufacturing process for all of our printer solutions.
Sapphire is a fully integrated solution including the Flow design software and Assure quality validation software. Our software is fully integrated into the design, production and quality validation platform with our Sapphire family of systems. We maintain legal title of our software systems for products sold under both our 3D printer sale transactions and recurring payment transactions.
We then conduct a series of process tests culminating in a final factory acceptance test. We have internal teams focused on technology development, engineering and manufacturing. The teams coordinate the design, construction, assembly, testing and shipment of our products. We currently rely on numerous external suppliers, which we believe have ample capacity to increase supply of our critical components.
The teams coordinate the design, construction, assembly, testing and shipment of our products. We currently rely on numerous external suppliers, which we believe have ample capacity to increase supply of our critical components. For the majority of these suppliers, we believe we can readily source components from competing suppliers on short notice.
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, 2025, we owned 57 issued patents of which 45 are issued U.S. patents, and 12 are issued foreign patents. We also have 34 publicly pending patent applications of which 32 are pending U.S. patent applications and two are pending foreign patent applications. Our trademarks include six registered U.S. trademarks, and 46 registered foreign trademarks.
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 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 eight trademark types worldwide include six registered U.S. trademarks and 46 registered foreign trademarks. We also have one U.S. registered copyright.
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.
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. 14 Assure Assure is an advanced quality validation software platform that includes process metrologies to ensure repeatable, consistent part quality.
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.
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, semiconductor and other industrial markets.
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.
Certain of these distribution partners also provide maintenance services to customers in their specified territories. Business Segments We operate in a single reporting segment. 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.
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.
We also have 34 publicly pending patent applications of which 32 are pending U.S. patent applications and two pending foreign patent applications. Our issued patents will expire at different times in the future, with the earliest expiring in 2035 and the latest expiring in 2047.
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.
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.
With this access, users can import proven parameters they have developed, optimize default parameters for specific application needs, and develop parameter sets supporting new material development for novel solutions and specific applications.
With this access, users can import proven parameters, optimize default settings for specific applications and develop parameter sets to support new materials and novel solutions, while maintaining the ability to scale production across multiple Sapphire systems and locations.
Assure Assure is an advanced quality control software platform that includes process metrologies to ensure repeatable, consistent part quality. The platform works with a myriad of complex sensors, which allow prompt control modulation of the laser systems of the Sapphire printer line, to calibrate production outcomes within prescribed tolerances.
The platform works with a myriad of complex sensors, which enables a path towards control modulation also known as “Closed Loop Control” of the laser systems of the Sapphire printer line, to calibrate production outcomes within prescribed tolerances. Flow Flow software powers the whole family of Sapphire AM printers.
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.
Our address is 2710 Lakeview Court, Fremont, CA 94538. Our telephone number is (408) 610-3915. Our website address is https://www.velo3d.com.
Extend competitive advantage with higher quality and new products We plan to enhance the quality of newly manufactured Sapphire printers in the future to further extend our technological advantage relative to our competitors. Due to the success of our operational initiatives and product improvements, we have significantly reduced the installation time of Sapphire printers over the last year.
In addition to our U.S. and European sales teams, we maintain distribution relationships in the Asia-Pacific region and Austria, which support international customer engagement and service capabilities. Extend competitive advantage with higher quality and new products We plan to enhance the quality of newly manufactured Sapphire printers in the future to further extend our technological advantage relative to our competitors.
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.
Competition We compete with other suppliers of 3D printers and parts, materials and software, as well as with suppliers of traditional metal manufacturing solutions. We compete with these suppliers, as well as channel partners, for customers, and for certain of our products.
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.
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. Our ability to match process parameters Machine to Machine ensures repeatability and eliminates the variability that often plagues traditional AM platforms.
Production of our systems requires approximately 8 to 15 weeks depending on the Sapphire product within our family of systems. We employ several third-party vendors to supply our core hardware subsystems and components. Following receipt of these subsystems and components, we assemble and calibrate the system.
We employ several third-party vendors to supply our core hardware subsystems and components. Following receipt of these subsystems and components, we assemble and calibrate the system. We then conduct a series of process tests culminating in a final factory acceptance test. We have internal teams focused on technology development, engineering and manufacturing.
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.
We believe the combination of equipment sales and services enables customers to adopt additive manufacturing in a manner aligned with technical readiness and economic requirements. 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.
Flow Developer Flow Developer is available for users of Flow 7.0, the latest version of our print preparation software that turns traditional design files into print files. Developer grants editor-level access to print parameters, giving companies maximum flexibility and control when working with our additive manufacturing solution.
It uses advanced computational algorithms to prescribe specific manufacturing laser tool paths and processes specific to the Sapphire production systems, ensuring that the 3D object is produced within the required specifications. Flow Developer is available for users of Flow 7.0, the latest version of our print preparation software that turns traditional design files into print files.
Our machines have the ability to make parts with thousands of composite structures made from various metals including aluminum, titanium, nickel-alloys, nickel super alloys, copper alloys, stainless steel and steel alloys. In principle, any metal that is cold-weldable is able to be used as a base layer in our machines.
In principle, any metal that is cold-weldable is able to be used as a base metal alloy in our machines. We currently have recipes to print from 16 different metals (e.g., alloys) and add recipes for additional metals based on 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.
We also have one U.S. registered copyright. 13 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 own manufacturing operations are primarily limited to final assembly, testing and shipment.
For the majority of these suppliers, we believe we can readily source components from competing suppliers on short notice. For several critical subsystems, we have developed multiple suppliers to ensure surety of supply. We manage our inventory based on sales and production forecasts and anticipated lead times for sourcing components and assembly.
For several critical subsystems, we have developed multiple suppliers to ensure surety of supply.
Removed
Item 1. Business. Overview We seek to fulfill the promise of additive manufacturing (“ AM ”), also referred to as three-dimensional printing (“ 3D printing ”), to deliver breakthroughs in performance, cost, and lead time in the production of high-value metal parts.
Added
Item 1. Business. Overview We are a production-focused metal additive manufacturing technology company that develops and manufactures advanced metal additive manufacturing systems and provides production and engineering services that enable customers to manufacture high-value metal parts at scale. Additive manufacturing (“AM”), also referred to as three-dimensional printing (“3D printing”), has historically been used primarily for prototyping and limited production applications.
Removed
We produce a fully integrated hardware and software solution based on our proprietary laser powder bed fusion (“ L-PBF ”) technology, which greatly reduces and often eliminates the need for support structures. Our technology enables the production of highly complex, mission-critical parts that existing AM solutions cannot produce without the need for redesign or additional assembly.
Added
We believe the industry is transitioning toward production-scale deployment, particularly in defense, aerospace, energy and other industrial markets where supply chain resilience, rapid innovation cycles and complex engineering requirements are critical.
Removed
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.
Added
Our business combines two complementary operating models: • Equipment sales, consisting primarily of our Sapphire family of metal additive manufacturing systems and associated software; and • Production and engineering services, delivered through our Rapid Production Solutions (“RPS”) offering and Expert Services organization.
Removed
This affords a wide breadth of design freedom for creating new metal parts and it enables replication of existing parts without the need to redesign the part to be manufacturable with AM. Because of these features, we believe our technology and product capabilities are highly valued by our customers.
Added
Together, these models allow customers to adopt additive manufacturing through printer ownership, service-based production or hybrid manufacturing deployments driven by program requirements, capital availability and manufacturing readiness. We 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 RPS offering.
Removed
Our customers are primarily original equipment manufacturers (" OEMs ") and contract manufacturers (" CMs ") who look to AM to solve issues with traditional manufacturing technologies for metal parts. Those traditional manufacturing technologies rely on processes, including casting, stamping and forging, that typically require high volumes to drive competitive costs and have long lead times for production.
Added
Our technology supports production of mission-critical components such as propulsion hardware, hypersonic engine parts, thermal management systems, airframe components, and advanced munitions. These capabilities contribute to reduced lead times, minimized labor costs, and enhanced readiness while ensuring secure domestic manufacturing free of foreign technology dependencies.
Removed
Our customers look to AM solutions to produce assemblies that are lighter, stronger, and more reliable than those manufactured with traditional technologies. Our customers also expect AM solutions to drive lower costs for low-volume parts and substantially shorter lead times.
Added
Our strategy is to serve as a production enabler, helping customers move from early design exploration through qualified manufacturing and into sustained full-rate production using a consistent technology platform.
Removed
However, many of our customers have found that legacy AM technologies failed to produce the required designs for the high-value metal parts and assemblies that our customers wanted to produce with AM. As a result, other AM solutions often require that parts be redesigned so that they can be produced and frequently incur performance losses for high-value applications.
Added
Our platform combines: • Flow print preparation software • The Sapphire family of metal additive manufacturing systems • Assure quality assurance software • Our proprietary Intelligent Fusion manufacturing process These technologies are supported by our Expert Services engineering teams and RPS production capabilities, forming an integrated manufacturing platform designed to deliver scalable, repeatable and economically viable production outcomes.
Removed
In contrast, our technology can deliver complex high value metal parts with the design advantages, lower costs and faster lead times associated with AM, and generally avoids the need to redesign the parts. As a result, our customers have increasingly adopted our technology into their design and production processes.
Added
A key capability underlying our production services and commercial model is our ability to produce repeatable manufacturing outcomes across multiple systems and locations. Through validated manufacturing instructions, sometimes referred to internally as “Golden Print Files,” we capture process parameters, calibration conditions and build instructions required to manufacture a qualified 8 part.
Removed
We believe our value is reflected in our sales patterns, as most customers purchase a single machine to validate our technology and purchase additional systems over time as they embed our technology in their product roadmap and manufacturing infrastructure.
Added
Once established, these validated build files enable customers to reproduce parts across different Sapphire systems while targeting consistent geometry, material properties and performance outcomes.
Removed
We consider this approach a “land and expand” strategy, oriented around a demonstration of our value proposition followed by increasing penetration with key customers.
Added
We believe this repeatability enables a flexible production model in which customers may begin with first article and qualification builds through Velo3D-operated RPS and Expert Services and subsequently scale production through printer ownership, continued production services with Velo3D or deployment across a distributed network of contract manufacturers operating Sapphire systems.
Removed
We offer customers a fully integrated solution, which includes the following key components: • Flow print preparation software conducts a sophisticated analysis of the features of the metal part and specifies a production process that significantly reduces and often eliminates the need for support structures. • Sapphire metal AM printers produce the part using our proprietary L-PBF technology.
Added
We believe that our part producibility is ahead of our competitors as a result of our tool path generation software namely “Flow” which comprises custom low angle and within part feature based process customization.
Removed
Our technology produces metal parts by fusing many thousands of very thin layers of metal powder with a precisely controlled laser beam in a sophisticated software defined sequence (or “recipe”) prescribed by our Flow software. • Assure quality assurance software validates the product made by Sapphire printers to confirm that each layer is made to the specifications required by the original design. • Intelligent Fusion is the underlying manufacturing process that binds software and hardware together into a complete manufacturing solution that produces repeatable outcomes across different family of Sapphire systems.
Added
Industry Background Traditional metal manufacturing methods such as casting, forging and machining are optimized for high-volume production but can involve long-lead times, tooling constraints and geographically complex supply chains. These limitations have become increasingly visible in industries supporting national security, aerospace systems and energy infrastructure, where program timelines and supply continuity are critical.
Removed
Legacy AM technologies often rely on internal supports to prevent deformation of the metal part during the 3D printing process. These supports inhibit the production of parts with complex internal geometries, which are often required in high-performance applications, because there is limited or no access to remove them after production.
Added
In addition, aerospace and defense manufacturers often face significant and unpredictable costs associated with poor quality in traditional manufacturing processes. Initial casting and tooling quotations may appear economically attractive relative to additive manufacturing; however, once tooling is developed and first articles are delivered, systematic defects can emerge across production batches.
Removed
Our technological advances enable our Sapphire family of systems to print metal parts that significantly reduce and often eliminates the need for internal supports, which enables our customers to produce designs that would otherwise be infeasible to make with conventional AM technology.

… 58 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

101 edited+96 added−42 removed304 unchanged
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.
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 and disclosures that would not be prevented or detected.
We have historically invested in research and development efforts that further enhance our products. Such investments may affect our operating results and liquidity, and, if the return on these investments is lower or develops more slowly than we expect, our revenue and operating results may suffer. We have historically invested in research and development efforts that further enhance our products.
Such investments may affect our operating results and liquidity, and, if the return on these investments is lower or develops more slowly than we expect, our revenue and operating results may suffer. We have historically invested in research and development efforts that further enhance our products.
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.
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.
Other risks and uncertainties we face from our global operations include: • limited protection for the enforcement of contract and IP rights in certain countries where we may sell our products or work with suppliers or other third parties; • potentially longer sales and payment cycles and potentially greater difficulties in collecting accounts receivable; • costs and difficulties of customizing products for foreign countries; • challenges in providing solutions across a significant distance, in different languages and among different cultures; • laws and business practices favoring local competition; • being subject to a wide variety of complex foreign laws, treaties and regulations and adjusting to any unexpected changes in such laws, treaties and regulations; • compliance with U.S. laws affecting activities of U.S. companies abroad, including the U.S.
Other risks and uncertainties we face from our global operations include: • limited protection for the enforcement of contract and IP rights in certain countries where we may sell our products or work with suppliers or other third parties; • potentially longer sales and payment cycles and potentially greater difficulties in collecting accounts receivable; 31 • costs and difficulties of customizing products for foreign countries; • challenges in providing solutions across a significant distance, in different languages and among different cultures; • laws and business practices favoring local competition; • being subject to a wide variety of complex foreign laws, treaties and regulations and adjusting to any unexpected changes in such laws, treaties and regulations; • compliance with U.S. laws affecting activities of U.S. companies abroad, including the U.S.
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.
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 • political or civil unrest or instability, terrorism or epidemics and other similar outbreaks or events.
However, we may not be able to: • develop cost effective new products and technologies that address the increasingly complex needs of prospective customers; • enhance our existing products and technologies; • respond to technological advances and emerging industry standards and certifications on a cost-effective and timely basis; • adequately protect our IP as we develop new products and technologies; • identify the appropriate technology or product to which to devote our resources; or • ensure the availability of cash resources to fund R&D.
However, we may not be able to: • develop cost effective new products and technologies that address the increasingly complex needs of prospective customers; • enhance our existing products and technologies; • respond to technological advances and emerging industry standards and certifications on a cost-effective and timely basis; • adequately protect our IP as we develop new products and technologies; 30 • identify the appropriate technology or product to which to devote our resources; or • ensure the availability of cash resources to fund R&D.
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.
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 expensing of certain capital expenditures, and putting into effect the migration from a “worldwide” system of taxation to a more territorial system.
Furthermore, even if we do successfully demonstrate our products’ capabilities, potential customers may be more comfortable doing business with another larger and more established company or may take longer than expected to make the decision to order our products. Significant revenue from new product investments may not be achieved for a number of years, if at all.
Furthermore, even if we do successfully demonstrate our products’ capabilities, potential customers may be more comfortable doing business with another larger and more established company or may take longer than expected 25 to make the decision to order our products. Significant revenue from new product investments may not be achieved for a number of years, if at all.
Further, in connection with its withdrawal from the EU, the United Kingdom has implemented the GDPR as of January 1, 2021 (as it existed on December 31, 2020 but subject to certain UK-specific amendments). These laws create new individual privacy rights and impose increased obligations, including disclosure obligations, on companies handling personal data.
Further, in connection with its withdrawal from the EU, the United Kingdom has implemented the GDPR as of January 1, 2021 44 (as it existed on December 31, 2020 but subject to certain UK-specific amendments). These laws create new individual privacy rights and impose increased obligations, including disclosure obligations, on companies handling personal data.
The warrant agreement governing the public warrants and the private placement warrants designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our public warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
The warrant agreement governing the public warrants and the private placement warrants designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of 53 actions and proceedings that may be initiated by holders of our public warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
While we expect research analyst coverage of our company, if no analysts commence coverage of us, the market price and volume for our shares of common stock could be adversely affected. 47 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.
While we expect research analyst coverage of our company, if no analysts commence coverage of us, the market price and volume for our shares of common stock could be adversely affected. 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.
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.
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.
In addition, others may obtain knowledge of our trade secrets through independent development or other access by legal means. The applicable governmental authorities may not approve our pending service mark and trademark applications. A failure to obtain trademark registrations in the U.S. and in other countries could limit our ability to obtain and retain our trademarks in those jurisdictions.
In addition, others may obtain knowledge of our trade secrets through independent development or other access by legal means. 45 The applicable governmental authorities may not approve our pending service mark and trademark applications. A failure to obtain trademark registrations in the U.S. and in other countries could limit our ability to obtain and retain our trademarks in those jurisdictions.
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.
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.
Some of our arrangements for additive manufacturing solutions contain customer-specific provisions that may impact the period in which we recognize the related revenues under GAAP. Certain customers that purchase additive manufacturing solutions from us require specific, customized factors relating to their intended use of the solution or the installation of the product in the customers’ facilities.
Some of our arrangements for additive manufacturing solutions contain customer-specific provisions that may impact the period in which we recognize the related revenues under GAAP. 35 Certain customers that purchase additive manufacturing solutions from us require specific, customized factors relating to their intended use of the solution or the installation of the product in the customers’ facilities.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by nonaffiliates exceeds $250 million as of the prior June 30 or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30 or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
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 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.
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.
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 Iran, the war in Israel, and the war in Ukraine-Russia and the economic sanctions related thereto). 50 These market and industry factors may materially reduce the market price of our common stock and our public warrants regardless of our operating performance.
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.
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, 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.
However, such activities require time for development and capital expenditures before commencement of commercial operations, and key assumptions underpinning a decision to make such an investment may prove incorrect, including assumptions regarding construction costs and timing, which could harm our business, financial condition, results of operations and cash flows.
However, such activities require time for development and capital expenditures before commencement of commercial operations, and key assumptions underpinning a decision to make such 41 an investment may prove incorrect, including assumptions regarding construction costs and timing, which could harm our business, financial condition, results of operations and cash flows.
In addition, many countries in Europe and a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax obligations in the countries where we do or intend to do business or require us to change the manner in which we operate our business.
In addition, many countries in Europe and a number of other countries and organizations, 37 have recently proposed or recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax obligations in the countries where we do or intend to do business or require us to change the manner in which we operate our business.
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.
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.
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.
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.
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.
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.
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.
In addition, concerns about terrorism, the effects of a terrorist attack, political turmoil, labor strikes, war (including Iran, 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.
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.
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.
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.
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.
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 develop effective strategies to raise 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.
To the extent the demand for our products slows, or the additive manufacturing market contracts, we may be faced with excess manufacturing capacity and related costs that cannot readily be reduced, which will adversely impact our financial condition and results of operations.
To the extent the demand for our products slows, or the additive manufacturing market contracts, we 28 may be faced with excess manufacturing capacity and related costs that cannot readily be reduced, which will adversely impact our financial condition and results of operations.
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.
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.
We do not plan to integrate our proprietary software with open-source software in ways that would require the release of our proprietary software's source code to the public; however, our use and distribution of open-source software may entail greater risks than use of third-party commercial software.
We do not plan to integrate our proprietary software with open-source software 47 in ways that would require the release of our proprietary software's source code to the public; however, our use and distribution of open-source software may entail greater risks than use of third-party commercial software.
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.
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.
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.
Moreover, 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.
We may be unable to hire, train, retain and manage the necessary personnel or to identify, manage and exploit potential strategic relationships and market opportunities, which will negatively impact our business, financial condition, results of operations and prospects.
We may be unable to hire, train, retain and manage the necessary personnel or to 33 identify, manage and exploit potential strategic relationships and market opportunities, which will negatively impact our business, financial condition, results of operations and prospects.
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.
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. 42 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 and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the 51 underlying securities for sale under all applicable state securities laws.
In response to the Public Statement, we reevaluated the accounting treatment of our public warrants and private placement warrants and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
In response to the Public Statement, we reevaluated the accounting treatment of our public warrants and private placement warrants and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair 49 value each period reported in earnings.
Additionally, the introduction of new products or services may further heighten quarterly fluctuations in gross profit and gross profit margins due to manufacturing ramp-up and start-up costs as well as new product introduction pricing strategies.
Additionally, the introduction of new products or services may further heighten quarterly fluctuations in gross profit and gross profit margins due to manufacturing ramp-up and start-up costs as well as new 27 product introduction pricing strategies.
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.
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. 39 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.
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.
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 46 provisions under various license arrangements.
Our ability to raise additional capital when needed may be adversely affected by external factors beyond our control, including changes in the political climate, geopolitical actions, changes in market interest rates or foreign exchange rates, market volatility in the trading prices for our common stock and other technology companies, a recession, depression, high inflation or other sustained adverse market event, and the outbreak of epidemic disease.
Our ability to raise additional capital may be adversely affected by external factors beyond our control, including changes in the political climate, geopolitical actions, changes in market interest rates or foreign exchange rates, market volatility in the trading prices for our common stock and other technology companies, a recession, depression, high inflation or other sustained adverse market event, and the outbreak of epidemic disease.
In addition, we could also face unknown liabilities or write-offs due to our acquisitions, which could result in a significant charge to our earnings in the period in which they occur.
In addition, we could also face unknown liabilities or write-offs due to our acquisitions, which could 26 result in a significant charge to our earnings in the period in which they occur.
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.
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.
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.
As a result, included on our balance sheet as of December 31, 2023 contained were derivative liabilities related to embedded features contained within these warrants.
Accordingly, subject to our compliance with the covenants in the Secured Notes, we expect we will need to engage in equity or debt financings to secure additional funds, including seeking additional capital from public or private offerings of our equity or debt securities, electing to repay, restructure or refinance our existing indebtedness, or electing to borrow additional amounts under new credit lines or from other sources.
Accordingly, subject to our compliance with the covenants in the Secured Notes, we need to engage in equity or debt financings to secure additional funds, including seeking additional capital from public or private offerings of our equity or debt securities, electing to repay, restructure or refinance our existing indebtedness, or electing to borrow additional amounts under new credit lines or from other sources.
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.
Should any of these suppliers become unavailable or inadequate, or impose terms unacceptable 40 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.
For example, we lease our 3D printers to certain customers and we also use a sale and utilization fee (variable consideration) model with certain other customers. Our sale and utilization fee model is still relatively new to some of our customers and may not be attractive to them, especially in regions where the model is less common.
For example, we lease our 3D printer to certain customers and we also use a sale and utilization fee (variable consideration) model with certain other customers. Our sale and utilization fee model is still relatively new to some of our customers and may not be attractive to them, especially in regions where the model is less common.
Revenue growth and growth in our customer base may not be sustainable, and we may not achieve sufficient revenue to achieve or maintain profitability. 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.
Revenue growth and growth in our customer base may not be sustainable, and we may not achieve sufficient revenue to achieve or maintain profitability. For example, during the year ended December 31, 2025, we experienced less annual revenue growth than expected due to the impact of delayed shipments and customer order delays.
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.
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, either by us or our shareholders.
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.
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 1.000 shares of common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
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.
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, the ongoing conflict with Iran, 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.
Accordingly, the sudden loss of SpaceX or one or more of our other significant customers, the renegotiation of a significant customer contract, a substantial reduction in their orders, their failure to exercise customer options, their unwillingness to extend contractual deadlines if we are unable to meet production requirements, their inability to perform under their contracts or a significant deterioration in their financial condition could harm our business, results of operations and financial condition.
Accordingly, the loss of one or more of our significant customers, the renegotiation of a significant customer contract, a substantial reduction in their orders, their failure to exercise customer options, their unwillingness to extend contractual deadlines if we are unable to meet production requirements, their inability to perform under their contracts or a significant deterioration in their financial condition could harm our business, results of operations and financial condition.
We have the ability to redeem outstanding public warrants at any time prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our common stock equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders.
We have the ability to redeem outstanding public warrants at any time prior to their expiration, at a price of $0.15 per warrant, provided that the last reported sales price of our common stock equals or exceeds $270.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders.
These changes, if implemented, may result in our being required to obtain additional approvals and/or licenses to sell 3D printers in the global market. Our failure to effectively manage the risks and uncertainties associated with our global operations could limit the future growth of our business and adversely affect our business and operating results.
These changes, if implemented, may result in our being required to obtain additional approvals and/or licenses to sell 3D printer and parts in the global market. Our failure to effectively manage the risks and uncertainties associated with our global operations could limit the future growth of our business and adversely affect our business and operating results.
Among other things, our Certificate of Incorporation and Amended and Restated Bylaws include provisions regarding: • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders after such date and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; • the requirement that a special meeting of stockholders may be called only by a majority of the entire Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; • the ability of the Board to amend the bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, our Certificate of Incorporation and Amended and Restated Bylaws include provisions regarding: 52 • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; • the requirement that a special meeting of stockholders may be called only by a majority of the entire Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; • the ability of the Board to amend the bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
In addition, we may redeem the public warrants at any time prior to their expiration at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption for a number of shares of our common stock determined based on the redemption date and the fair market value of our common stock.
In addition, we may redeem the public warrants at any time prior to their expiration at a price of $1.50 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption for a number of shares of our common stock determined based on the redemption date and the fair market value of our common stock.
To the extent shares are sold into the market by our stockholders pursuant to the Resale Shelf Registration Statement, under Rule 144 under the Securities Act or otherwise, particularly in substantial quantities, the market price of our common stock could decline.
To the extent shares are sold into the market by our stockholders pursuant to the Resale Registration Statements, under Rule 144 under the Securities Act or otherwise, particularly in substantial quantities, the market price of our common stock could decline.
Department of Justice to pause enforcement of the FCPA and to issue new enforcement guidelines that take into consideration U.S. national security and the competitiveness of U.S. companies abroad. It is unclear how this presidential directive may affect our industry as a whole or our business in particular.
Department of Justice to pause enforcement of the FCPA and to issue new enforcement guidelines that take into consideration U.S. national security and the competitiveness of U.S. companies abroad. It is unclear how this presidential directive may affect our industry as a whole or our business in particular. On June 10, 2025, the U.S.
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 actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected.
It is difficult for us 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 actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial condition could be materially adversely affected.
Additionally, 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.
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.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
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 our senior secured notes due 2026, as amended (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 substantial debt obligations in the near-term as well as to respond to business challenges and opportunities, including the need to repay our Secured Notes, provide working capital, continuing to fund payroll, develop new features or enhance our products, expand our manufacturing capacity, improve our operating infrastructure or acquire complementary businesses and technologies.
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 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, 2025, we have 36,892 outstanding warrants to purchase an equal number of shares of common stock.
These material weaknesses also resulted in the revision of our consolidated financial statements for the year ended December 31, 2022 and as of and for the interim periods ended March 31, 2022, June 30, 2022, September 30, 2022, March 31, 2023, June 30, 2023, and September 30, 2023.
These material weaknesses resulted in the revision of our consolidated financial statements for the year ended December 31, 2024 and as of and for the interim periods ended March 31, 2025 and 2024, June 30, 2025 and 2024, and September 30, 2025 and 2024.
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.
For the years ended December 31, 2025 and 2024, sales to the top three customers accounted for 33.2% and 47.0% of 22 our revenue, respectively. Of the top three customers for the year ended December 31, 2025, all three customers were different from the top three customers for the comparable period in 2024. We continue to diversify our customer base.
We have entered, or have agreed to enter into, certain registration rights agreements that provide for the registration of the resale of substantially all of our issued and outstanding shares of common stock, as well as shares of common stock underlying certain promissory notes.
Substantial sales of our common stock could cause the price of our common stock to decline. 48 We have entered, or have agreed to enter into, certain registration rights agreements that provide for the registration of the resale of substantially all of our issued and outstanding shares of common stock, as well as shares of common stock underlying certain promissory notes.
Risks Related to Our Financial Position and Need for Additional Capital We are an early-stage company with a history of operating losses and may not maintain profitability in the future. We experienced loss from operations of $82.3 million and $133.3 million for the years ended December 31, 2024 and 2023, respectively.
Risks Related to Our Financial Position and Need for Additional Capital We are an early-stage company with a history of operating losses and may not maintain profitability in the future. We experienced loss from operations of $54.9 million and $78.8 million for the years ended December 31, 2025 and 2024, respectively.
Continued market uncertainty or volatility, or any broader economic challenges resulting from adverse developments in internal trade policies, could adversely affect the price of our stock and our ability to raise additional capital, which could have a material adverse effect on our business and financial condition. We may be adversely affected by the effects of inflation or possible stagflation.
Continued market uncertainty or volatility, or any broader economic challenges resulting from adverse developments in internal trade policies, could adversely affect the price of our stock and our ability to raise additional capital, which could have a material adverse effect on our business and financial condition.
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.
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.
Specifically, we did not design and maintain effective controls over the appropriate classification and presentation of accounts and disclosures in the consolidated financial statements.
Specifically, we did not design and maintain effective controls over the appropriate classification and presentation of accounts and disclosures in the consolidated financial statements. • We did not design and maintain effective controls over the accounting for stock-based compensation.
For current and potential international customers whose contracts are denominated in U.S. dollars, the relative change in local currency values creates relative fluctuations in our product pricing. These changes in international end-user costs may result in lost orders and reduce the competitiveness of our products in certain foreign markets.
Accordingly, we face significant operational risks from doing business internationally. For current and potential international customers whose contracts are denominated in U.S. dollars, the relative change in local currency values creates relative fluctuations in our product pricing. These changes in international end-user costs may result in lost orders and reduce the competitiveness of our products in certain foreign markets.
We also rely on information technology systems maintained by third parties, including third-party cloud computing services and the computer systems of our suppliers for both our internal operations and our customer-facing infrastructure related to our additive manufacturing solutions.
Any such disruption could adversely affect our reputation and financial condition. We also rely on information technology systems maintained by third parties, including third-party cloud computing services and the computer systems of our suppliers for both our internal operations and our customer-facing infrastructure related to our additive manufacturing solutions.
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.
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.
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.
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.
Our terms and conditions with SpaceX are consistent with all other customers and permit the customer to terminate our services at any time (subject to notice and certain other provisions).
Our terms and conditions permit the customer to terminate services at any time (subject to notice and certain other provisions).
We cannot guarantee that we have incorporated open-source software in our software in a manner that will not subject us to liability or in a manner that is consistent with our current policies and procedures. Risks Related to Our Notes The terms of the Notes restrict our current and future operations.
We cannot guarantee that we have incorporated open-source software in our software in a manner that will not subject us to liability or in a manner that is consistent with our current policies and procedures.
In addition, competition for acquisitions in the markets in which we operate during recent years has increased, and may continue to increase, which may result in an increase in the costs of acquisitions or cause us to refrain from making certain acquisitions.
In addition, competition for acquisitions in the markets in which we operate during recent years has increased, and may continue to increase, which may result in an increase in the costs of acquisitions or cause us to refrain from making certain acquisitions. We may not be able to complete future acquisitions on favorable terms, if at all.
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.
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 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.
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.
Our business is subject to risks associated with selling machines and other products in non-United States locations. Our products and services, and product outputs from CMs who use our 3D printer systems, are distributed in more than 25 countries around the world. Accordingly, we face significant operational risks from doing business internationally.
Our business is subject to risks associated with selling machines and other products in non-United States locations. Our products and services, and product outputs from CMs who use our 3D printer and parts systems, are distributed in more than a dozen countries around the world, primarily in North America and Europe.

… 159 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−0 removed14 unchanged
Biggest changeCollaborative 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.
Biggest changeCollaborative 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.
We engage in an annual assessment and testing of our policies, standards, processes and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, focused on evaluating the effectiveness of our cybersecurity measures and planning. Governance Our Board, supported by the Audit Committee, oversees our risk management process.
We engage in an annual assessment and testing of our policies, standards, processes and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, focused on evaluating the effectiveness of our cybersecurity measures and planning. 55 Governance Our Board, supported by the Audit Committee, oversees our risk management process.
Item 1C. Cybersecurity. We recognize the critical importance of maintaining the trust and confidence of all our stakeholders. Our Board is actively involved in oversight of our risk management program, and cybersecurity represents an important component of our overall approach to risk management.
Item 1C. Cybersecurity. We recognize the critical importance of maintaining the trust and confidence of all our stakeholders. Our Board is actively involved in oversight of our risk management program, and cybersecurity represents an important component of our overall approach to risk 54 management.
For more information on our cybersecurity risks, see " Risk Factors—Risks Related to Compliance Matters—Aspects of our business are subject to privacy, data use and data security regulations, which could increase our costs " and " —Risks Related to Our Business and Industry—We rely on our information technology systems to manage numerous aspects of our business and a disruption of these systems could adversely affect our business .”
For more information on our cybersecurity risks, see " Risk Factors—Risks Related to Compliance Matters—Aspects of our business are subject to privacy, data use and data security regulations, which could increase our costs " and " —Risks Related to Our Business and Operations—We rely on our information technology systems to manage numerous aspects of our business and a disruption of these systems could adversely affect our business .”
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.
Although we are subject to ongoing and evolving cybersecurity threats, we are not aware of any material risks from cybersecurity threats in 2025 that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
Added
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.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−1 removed1 unchanged
Biggest changeLocation City, Country Description Square Footage Owned/ Leased 511 Division* Campbell, CA, USA Research and Development 17,200 Leased Lakeview Fremont, CA, USA Global Headquarters & Manufacturing Facility 80,000 Leased 530 Division* Campbell, CA, USA Research and Development 5,000 Leased * See Note 8, Leases in the notes to our audited consolidated financial statements included elsewhere in this Annual Report for additional information on our leased properties.
Biggest changeLocation City, Country Description Square Footage Owned/ Leased 2710 Lakeview Ct Fremont, CA, USA Global Headquarters & Manufacturing Facility 80,000 Leased See Note 8, Leases in the notes to our audited consolidated financial statements included elsewhere in this Annual Report for additional information on our leased properties.
Item 2. Properties. Our global corporate headquarters is located in Fremont, California, and we conduct final assembly and test of our machines in a manufacturing facility that is located at our headquarters. The lease term, including options to extend, expirations range from 2024 to 2032.
Item 2. Properties. Our global corporate headquarters is located in Fremont, California, and we conduct final assembly and test of our machines in a manufacturing facility that is located at our headquarters. The lease term expires in March 2027, and includes an options to extend the lease to 2032.
Removed
Our lease for the two Campbell locations was terminated in the second half of 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
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
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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+3 added−0 removed2 unchanged
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".
Biggest changeOur common stock was previously quoted on the OTC Pink under the symbol “VLDX,” and prior to that, our common stock was previously quoted on the OTCQX Best Market under the symbol “VLDX.” Prior to that, our common stock was traded on the NYSE under the symbol "VLD".
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.
Holders of Record As of March 31, 2026, 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.
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.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2025, and is incorporated herein by reference.
Issuer Purchases of Equity Securities None. Item 6. Reserved 53
Use of Proceeds. None. Issuer Purchases of Equity Securities None. Item 6. Reserved 57
Added
Item 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 listed on the Nasdaq Capital Market under the symbol “VELO” since August 19, 2025.
Added
Sales of Unregistered Securities On March 4, 2026, the Company issued 394,517 shares of common stock upon conversion of a Senior Secured Convertible Promissory Note dated January 7, 2025, in the principal amount of $5,000,000, together with accrued and unpaid interest thereon, at a conversion price of $16.38 per share, pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act.
Added
On March 4, 2026, the Company issued 1,145,830 shares of common stock upon conversion of a Senior Secured Convertible Promissory Note dated February 10, 2025, in the principal amount of $10,000,000, together with accrued and unpaid interest thereon, at a conversion price of $10.50 per share, pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act.

Item 7. Management's Discussion & Analysis

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

133 edited+77 added−33 removed77 unchanged
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.
Biggest changeWe 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. 66 Results of Operations Comparison of the Years Ended December 31, 2025 and 2024: The following table summarizes our historical results of operations and as a percentage of revenue for the periods presented: Year Ended December 31, 2025 2024 Change % (In thousands, except for percentages) Revenue 3D Printer and parts $ 39,183 85.2 % $ 25,368 61.9 % $ 13,815 54.5 % Recurring payment 70 0.2 % 1,054 2.6 % (984 ) (93.4 )% Support services 6,196 13.5 % 9,581 23.4 % (3,385 ) (35.3 )% Other 524 1.1 % 5,000 12.2 % (4,476 ) (89.5 )% Total Revenue 45,973 100.0 % 41,003 100.0 % 4,970 12.1 % Cost of revenue 3D Printer and parts 47,211 102.7 % 34,159 83.3 % 13,052 38.2 % Recurring payment 12 0.0 % 866 2.1 % (854 ) (98.6 )% Support services 6,154 13.4 % 8,063 19.7 % (1,909 ) (23.7 )% Total cost of revenue 53,377 116.1 % 43,088 105.1 % 10,289 23.9 % Gross loss (7,404 ) (16.1 )% (2,085 ) (5.1 )% (5,319 ) 255.1 % Operating expenses Research and development 10,653 23.2 % 15,482 37.8 % (4,829 ) (31.2 )% Selling and marketing 6,766 14.7 % 12,858 31.4 % (6,092 ) (47.4 )% General and administrative 30,097 65.5 % 48,369 118.0 % (18,272 ) (37.8 )% Total operating expenses 47,516 103.4 % 76,709 187.1 % (29,193 ) (38.1 )% Loss from operations (54,920 ) (119.5 )% (78,794 ) (192.2 )% 23,874 (30.3 )% Interest expense (4,364 ) (9.5 )% (15,968 ) (38.9 )% 11,604 (72.7 )% (Loss) gain on fair value of warrants (1,140 ) (2.5 )% 32,094 78.3 % (33,234 ) (103.6 )% Gain on fair value of contingent earnout liabilities 10 0.0 % 1,445 3.5 % (1,435 ) (99.3 )% Loss on warrant cancellation (11,357 ) (24.7 )% — — % (11,357 ) — Loss on debt extinguishment — — % (4,904 ) (12 )% 4,904 (100.0 )% Other income (expense), net 526 1.1 % (3,637 ) (8.9 )% 4,163 (114.5 )% Loss before provision for income taxes (71,245 ) (155.0 )% (69,764 ) (170.1 )% (1,481 ) 2.1 % Provision (benefit) for income taxes (117 ) (0.3 )% 20 0 % (137 ) (685.0 )% Net loss $ (71,362 ) (155.2 )% $ (69,744 ) (170.1 )% $ (1,618 ) 2.3 % 67 Revenue The following table presents the revenue disaggregated by products and service type, as well as the percentage of total revenue.
Furthermore, on December 9, 2024, the Company and the Note Holders entered into a forbearance agreement where the Note Holders forbore from taking any enforcement action as a result of the occurrence and/or continuation of any specified events of default.
Furthermore, on December 9, 2024, the Company and the Note Holders entered into a forbearance agreement where the Note Holders forbore from taking any enforcement action as a result of the occurrence and/or continuation of any specified events of default.
On February 10, 2025, the Company issued a Senior Secured Convertible Promissory Note in the principal amount of $10,000,000 (the "February Note") to Thieneman Construction, Inc, an Indiana corporation, to be funded in two tranches of $5,000,000.
On February 10, 2025, the Company issued a Senior Secured Convertible Promissory Note in the principal amount of $10,000,000 (the "February Note") to Thieneman Construction, Inc, an Indiana corporation, to be funded in two tranches of $5,000,000.
Investing Activities Net cash provided by investing activities during the year ended December 31, 2024 was $7.8 million, consisting of $3.5 million of proceeds from maturity of available for sale investments and $3.2 million in sales of available for sale securities, and reimbursement of previously incurred leasehold expenditures of $1.1 million.
Net cash provided by investing activities during the year ended December 31, 2024 was $7.8 million, consisting of $3.5 million of proceeds from maturity of available-for-sale investments and $3.2 million in sales of available-for-sale securities, and reimbursement of previously incurred leasehold expenditures of $1.1 million.
We estimate the fair value of restricted share unit awards using the value of the Company’s common stock on the date of grant. We estimate the fair value of Earnout Shares awards underlying stock options to employees, which is considered a compensatory award and accounted for under ASC 718, Share-Based Compensation , using the Monte-Carlo simulation model .
We estimate the fair value of restricted share unit awards using the value of the Company’s common stock on the date of grant. We estimate the fair value of Earnout Shares awards underlying stock options to employees, which is considered a compensatory award and accounted for under ASC 718, Stock-Based Compensation , using the Monte-Carlo simulation model .
The Monte-Carlo simulation model was selected as the valuation methodology for the Earnout Shares due to the path-dependent nature of triggering events. Under ASC 718, the award is measured at fair value at the grant date and expense is recognized over the time-based vesting period (the triggering event is a market condition and does not impact expense recognition).
The Monte-Carlo simulation model was selected as the valuation methodology for the Earnout Shares due to the path-dependent nature of triggering events. Under ASC 718, the award is measured at fair value at the grant date and expense is recognized over the time-based vesting 78 period (the triggering event is a market condition and does not impact expense recognition).
Our Sapphire Family of Printers give our customers who are in space, aviation, defense, automotive, energy and industrial markets the freedom to design and produce metal parts with complex internal features and geometries that had previously been considered impossible for AM. We believe our technology is years ahead of competitors.
Our Sapphire Family of Printers give our customers who are in space, aviation, defense, automotive, energy and industrial markets the freedom to design and produce metal parts with complex internal features and geometries that had previously been considered impossible for AM. We believe our technology is ahead of competitors.
Support Services are included during the lease term. Equipment under lease contracts is reclassified from inventory at its basis and depreciated over five years to a salvage value. Income from the lessee is recorded as revenue using the straight-line method over the term of the lease. Support services are a non-lease component.
Support Services are included during the lease term. Equipment under lease contracts is reclassified from inventory at its basis and depreciated over five to ten years to a salvage value. Income from the lessee is recorded as revenue using the straight-line method over the term of the lease. Support services are a non-lease component.
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.
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 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.
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 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.
The Company determines revenue recognition through the following five- step model for recognizing revenue: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfies its performance obligation.
The Company determines revenue recognition through the following five-step model for recognizing revenue: (1) identification of the contract with a customer; (2) identification of 76 the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfies its performance obligation.
Recurring Payment (operating lease revenue from customers) The Company enters into operating leases (“ Recurring Payment ”) for customers who do not purchase the 3D Printers (“ equipment ”). The contracts explicitly specify the equipment which is a production system with defined components and services including the printer itself, services, and accessories.
Recurring Payment (operating lease revenue from lessors) The Company enters into operating leases (“ Recurring Payment ”) for customers who do not purchase the 3D Printers (“ equipment ”). The contracts explicitly specify the equipment which is a production system with defined components and services including the printer itself, services, and accessories.
The Investors may exercise the 2024 Private Warrants by paying the exercise in cash or by reducing the outstanding principal amount under the Secured Notes by an amount equal to the quotient of (A) the amount of the exercise price divided by (B) 1.20. The 2024 Private Warrants may also be exercised on a cashless basis under certain circumstances.
The Investors may exercise the 2024 Private Warrants by paying the exercise in cash or by reducing the outstanding principal amount under the Secured Notes by an amount equal to the quotient of (A) the amount 79 of the exercise price divided by (B) 1.20. The 2024 Private Warrants may also be exercised on a cashless basis under certain circumstances.
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.
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 2026.
A typical contract with customers for the 3D Printer and bundled software includes the Support Services. The Company provides one price for all deliverables including the 3D Printer and bundled software, and for the Support Services. Typically, the Company has one distinct obligation to transfer the 3D Printers and bundled software, and another distinct obligation to provide the Support Services.
A typical contract with customers for the 3D Printer and bundled software includes the Support Services. The Company provides one price for all deliverables including the 3D Printer and bundled software, and for the Support Services. Typically, the Company has one distinct obligation to transfer the 3D Printer and bundled software, and another distinct obligation to provide the Support Services.
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.
In 2024 and 2025, we implemented a number of supply chain and manufacturing improvements in response and intend to continue to focus on driving further operational improvements during 2026 to reduce operating costs.
Macroeconomic Conditions and Other World Events 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 ongoing military conflicts in Israel and in Ukraine and the economic sanctions related thereto), have added uncertainty in timing of customer orders and supply chain constraints.
Macroeconomic Conditions and Other World Events 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 ongoing military conflicts in the Middle East, including Israel, and in Ukraine and the economic sanctions related thereto), have added uncertainty in timing of customer orders and supply chain constraints.
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.
We consider this approach a “land and expand” strategy, oriented around a demonstration of our value proposition followed by increasing penetration with key customers. 58 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 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.
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.
During the year ended December 31, 2025, 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.
Arrayed continues to hold $5.0 million in principal amount of the Notes, and as a result of the exchange transaction, became the owner of approximately 95% of the Company’s issued and outstanding common stock. The Company's strategic review was concluded on December 24, 2024, at the close of the debt for equity exchange transaction.
Arrayed continues to hold $5.0 million in principal amount of the Notes, and as a result of the exchange transaction, became the owner of approximately 95% of the Company’s issued and outstanding common stock as of such date. The Company's strategic review was concluded on December 24, 2024, at the close of the debt for equity exchange transaction.
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.
Significant judgment is used to identify and account for each of the two performance obligations. 3D Printer and Parts 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.
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.
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 and parts ”). 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.
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).
We expect our interest expense may 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).
The February Note is payable in full on the date that is six months from the date such tranche was funded, in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid.
The February Note was payable in full on the date that is six months from the date such tranche was funded, in the amount of $5,750,000 and if not paid on or prior to such date, would continue to accrue interest at the same rate until paid.
While we expect system sales to improve and revenue from parts printing to increase in 2025, we do not have sufficient working capital to meet our financial needs for the twelve-month period following the filing date of this Annual Report.
While we expect system sales to improve and revenue from parts printing to increase in 2026, we do not have sufficient working capital to meet our financial needs for the twelve-month period following the filing date of this Annual Report.
The February Note is payable in full on the date that is six months from the date such tranche was funded, in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid.
The February Note was payable in full on the date that is six months from the date such tranche was funded, in the amount of $5,750,000 and if not paid on or prior to such date, would continue to accrue interest at the same rate until paid.
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.
Other Revenue Other 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, 2025 and 2024.
In connection with the Third Note Amendment, on July 1, 2024, the Company also entered into a letter agreement with the Investors pursuant to which the Company issued to the Investors warrants (the “July 2024 Private Warrants”) to purchase up to an aggregate of 1,650,000 shares of Common Stock.
In connection with the Third Note Amendment, on July 1, 2024, the Company also entered into a letter agreement with the Investors pursuant to which the Company issued to the Investors warrants (the “July 2024 Private Warrants”) to purchase up to an aggregate of 110,000 shares of Common Stock.
Other factors affecting our gross profit include changes to our material costs, assembly costs that are themselves dependent upon improvements to yield, and any increase in assembly overhead to support a greater number of 3D Printers sold and markets served.
Other factors affecting our gross profit include changes to our material costs, assembly costs that are themselves dependent upon improvements to yield, and any increase in assembly overhead to support a greater number of 3D Printer sold and markets served.
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.
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. 65 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.
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.
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, 2025 and 2024.
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.
The timeframe from order to completion of the site acceptance test occurs typically over three to six months. Revenue for the 3D Printer and parts is recognized at a point-in time, which occurs upon transfer of control to the customer at shipment.
The 2024 Private Warrants became exercisable 45 days after the original issuance date (the “Initial Exercise Date”), are exercisable at an exercise price of $15.946 per share and will expire on the one year anniversary of the later of (i) the Initial Exercise Date and (ii) the date on which the Resale Registration Statement (as defined in the Letter Agreement) is declared effective by the SEC.
The 2024 Private Warrants became exercisable 45 days after the original issuance date (the “Initial Exercise Date”), are exercisable at an exercise price of $199.35 per share and will expire on the one year anniversary of the later of (i) the Initial Exercise Date and (ii) the date on which the Resale Registration Statement (as defined in the Letter Agreement) is declared effective by the SEC.
Backlog ($ in millions): Backlog ($ in millions) is defined as the unfulfilled 3D printer systems to be delivered to customers in contracted dollars as of period end. Commercial Launch of the Sapphire XC 1MZ System We shipped our first Sapphire XC 1MZ system at the end of 2022, one year after the Sapphire XC launch.
Backlog ($ in millions): Backlog ($ in millions) is defined as the unfulfilled 3D printer systems and printed parts to be delivered to customers in contracted dollars as of period end. Commercial Launch of the Sapphire XC 1MZ System We shipped our first Sapphire XC 1MZ system at the end of 2022, one year after the Sapphire XC launch.
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 Printer and Parts ,” “ Cost of Recurring Payment ” and “ Cost of Support Services .” Cost of 3D Printer and parts 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.
The outstanding principal amount of the February Note is convertible into shares of the Company's common stock upon the occurrence of the Company’s successful listing of shares of its common stock on a national securities exchange or the occurrence and during the continuation of an event of default, into common stock at a fixed conversion price of $1.00 per share.
The outstanding principal amount of the February Note was convertible into shares of the Company's common stock upon the occurrence of the Company’s successful listing of shares of its common stock on a national securities exchange or the occurrence and during the continuation of an event of default, into common stock at a fixed conversion price of $15.00 per share.
The outstanding principal amount of the February Note is convertible upon the occurrence of the Company’s successful listing of shares of its common stock on a national securities exchange or the occurrence and during the continuation of an Event of Default, into Common Shares at a fixed conversion price of $1.00 per share.
The outstanding principal amount of the February Note was convertible upon the occurrence of the Company’s successful listing of shares of its common stock on a national securities exchange or the occurrence and during the continuation of an Event of Default, into Shares of common stock at a fixed conversion price of $15.00 per share.
In connection with the Second Note Amendment, on April 1, 2024, the Company also entered into a letter agreement (the “Letter Agreement”) with the Investors pursuant to which the Company issued to the Investors warrants (the “2024 Private Warrants”) to purchase up to an aggregate of 627,117 shares of Common Stock.
In connection with the Second Note Amendment, on April 1, 2024, the Company also entered into a letter agreement (the “Letter Agreement”) with the Investors pursuant to which the Company issued to the Investors warrants (the “2024 Private Warrants”) to purchase up to an aggregate of 41,808 shares of Common Stock.
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.
Recurring Payment, structured as an operating lease, was $0.1 million and $1.1 million for the years ended December 31, 2025 and 2024, 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, 2025, compared to the year ended December 31, 2024.
On February 24, 2025, the Company entered into Warrant Exchange Agreements with each of: (i) Highbridge Tactical Credit Master Fund, L.P. (“HM”); (ii) Highbridge Tactical Credit Institutional Fund, Ltd.
On February 24, 2025, the Company entered into Warrant Exchange Agreements with each of: (i) Highbridge Tactical Credit Master Fund, L.P. (“ HM ”); (ii) Highbridge Tactical Credit Institutional Fund, Ltd.
The January Note is payable in full on April 7, 2025 in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid.
The January Note was payable in full on April 7, 2025 in the amount of $5,750,000 and if not paid on or prior to such date, would continue to accrue interest at the same rate until paid.
The January Note is payable in full on April 7, 2025 in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid.
The January Note was payable in full on April 7, 2025 in the amount of $5,750,000 and if not paid on or prior to such date, would continue to accrue interest at the same rate until paid.
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.
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 any outstanding debt, provide working capital, develop new features or enhance our products, expand our manufacturing capacity, improve our operating infrastructure, or acquire complementary businesses and technologies.
The expense reduction and cash saving initiatives include streamlining facilities, managing working capital, and reducing overall general and administrative expenses. Debt Facilities As of December 31, 2024, our debt arrangements comprised the Secured Notes, of which we had approximately $5.0 million aggregate principal amount outstanding as of December 31, 2024. 66 On December 9, 2024, Arrayed Notes Acquisition Corp.
The expense reduction and cash saving initiatives include streamlining facilities, managing working capital, and reducing overall general and administrative expenses. Debt Facilities As of December 31, 2025, our debt arrangements comprised the Secured Notes, of which we had approximately $3.2 million aggregate principal amount outstanding as of December 31, 2025. On December 9, 2024, Arrayed Notes Acquisition Corp.
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.
As of December 31, 2025, over 50% of our customers have multiple Sapphire family of systems. 68 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.
Loss on Debt Extinguishment The loss on debt extinguishment was $4.9 million and $19.5 million for the years ended December 31, 2024 and 2023, respectively, and was related to the July 2024 Loan Modification in accordance with the warrant issuance, slightly offset by a gain recorded on the December 2024 Exchange Agreement..
Loss on Debt Extinguishment The loss on debt extinguishment was $0.0 million and $4.9 million for the years ended December 31, 2025 and 2024, respectively, and was related to the July 2024 Loan Modification in accordance with the warrant issuance, slightly offset by a gain recorded on the December 2024 Exchange Agreement.
The RDO Warrants and Placement Agent Warrants are exercisable until December 29, 2028. In connection with the BEPO Offering, the Company issued BEPO Warrants to purchase up to an aggregate of 979,592 shares of common stock.
The RDO Warrants and Placement Agent Warrants are exercisable until December 29, 2028. In connection with the BEPO Offering, the Company issued BEPO Warrants to purchase up to an aggregate of 65,307 shares of common stock.
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 cash used from operating assets was primarily comprised of accounts payable of $0.7 million, accrued expenses and other current liabilities of $2.6 million, and other noncurrent liabilities of $2.2 million, partially offset by an increase from inventories of $6.1 million for Sapphire and Sapphire XC system production, contract assets of $7.0 million, accounts receivable of $3.1 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 noncash charges primarily consisted of amortization of debt discount and deferred financing costs of $13.6 million, 67 stock-based compensation of $15.4 million, loss on debt extinguishment of $7.5 million, depreciation and amortization of $4.9 million, warrant issuance in connection with the August warrant inducement of $2.4 million, and cost of issuance of common stock warrants on BEPO Offering of $1.3 million, partially offset by the fair value related to the warrants of $32.1 million, gain on exchange of debt for common stock of $2.6 million and the change in fair value related to the contingent earnout liabilities of $1.4 million.
The noncash charges primarily consisted of amortization of debt discount and deferred financing costs of $13.6 million, stock-based compensation of $11.8 million, loss on debt extinguishment of $7.5 million, depreciation and amortization of $4.8 million, warrant issuance in connection with the August warrant inducement of $2.4 million, cost of issuance of common stock warrants on BEPO Offering of $1.3 million, and reserve for excess and obsolete inventory of $7.2 million, partially offset by the fair value related to the warrants of $32.1 million, gain on exchange of debt for common stock of $2.6 million and the change in fair value related to the contingent earnout liabilities of $1.4 million.
Our future cash requirements and the adequacy of available funds will depend on many factors, including our operating performance, competitive and industry developments, and financial market conditions. Off-Balance Sheet Arrangements As of December 31, 2024 and 2023, we did not have any off-balance sheet arrangements.
Our future cash requirements and the adequacy of available funds will depend on many factors, including our operating performance, competitive and industry developments, and financial market conditions. Off-Balance Sheet Arrangements As of December 31, 2025 and 2024, we did not have any off-balance sheet arrangements, other than described below.
On December 24, 2024, the Company and Arrayed entered into a debt for equity exchange transaction where the Company issued 185,151,333 shares of the Company’s common stock, in exchange for the cancellation of $22.4 million in principal amount of the Company’s Secured Notes plus $0.4 million of accrued interest on the Notes.
On December 24, 2024, the Company and Arrayed entered into a debt for equity exchange transaction where the Company issued 12,343,423 shares of the Company’s common stock, in exchange for the cancellation of $22.4 million in principal amount of the Company’s Secured Notes plus $0.4 million of accrued interest on the Notes.
On December 24, 2024, the Company and Arrayed entered into a debt for equity exchange transaction where the Company issued 185,151,333 shares of the Company’s common stock, in exchange for the cancellation of $22.4 million in principal amount of the Company’s Secured Notes plus $0.4 million of accrued interest on the Notes.
On December 24, 2024, the Company and Arrayed entered into a debt for equity exchange transaction where the Company issued 12,343,423 shares of the Company’s common stock, in exchange for the cancellation of $22.4 million in principal amount of the Company’s Secured Notes plus $0.4 million of accrued interest on the Notes.
Gain on Fair Value of Warrants The change in fair value of warrants resulted in a gain of $32.1 million, and $2.3 million for the years ended December 31, 2024 and 2023, respectively, and were related to the non-cash fair value change of the warrant liabilities.
Gain on Fair Value of Warrants The change in fair value of warrants resulted in a loss of $1.1 million and a gain of $32.1 million for the years ended December 31, 2025 and 2024, respectively, and were related to the non-cash fair value change of the warrant liabilities.
The reverse stock split was effected by the filing of a certificate of amendment (the “Amendment”) to our Certificate of Incorporation with the Secretary of State of the State of Delaware, without any change to par value. The Amendment became effective upon such filing.
The reverse stock split was effected by the filing of a certificate of amendment (the “June 2024 Amendment”) to our Certificate of Incorporation with the Secretary of State of the State of Delaware, without any change to par value. The June 2024 Amendment became effective upon such filing.
The BEPO Agent Warrants are exercisable at an exercise price of $13.475 per share and will expire on the five year anniversary of the date of issuance.
The BEPO Agent Warrants are exercisable at an exercise price of $202.20 per share and will expire on the five year anniversary of the date of issuance.
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”).
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 134 shares of the Company’s common stock at an exercise price of $1,344 per warrant share (the “2022 Private Warrant”).
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.
Following the Merger, 16,429 publicly-traded warrants (the “Public Warrants”) and 8,477 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 $6,037.50 per share.
The negative revenue performance was due to lower systems sold, mix of lower production volumes and discounted system pricing offset by our change in product mix to include more higher priced systems as discussed previously, resulting in a decrease in the average selling price. The 3D Printer sales also included parts and consumables revenue.
The revenue performance increased due to timing of systems sold, mix of lower production volumes and discounted system pricing offset by our change in product mix to include more higher priced systems as discussed previously, resulting in an increase in the average selling price. The 3D Printer and parts sales also included parts and consumables revenue.
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.
The decrease in research and development expenses in 2025 were related to a $2.8 million decrease for headcount, salaries and employee-related expenses, a $0.8 million decrease in stock-based compensation, and a $1.2 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, and other miscellaneous expenses.
The BEPO Warrants are immediately exercisable at an exercise price of $12.25 per share and will expire on the five year anniversary of the date of issuance. In connection with the BEPO Placement Agency Agreement, we also issued BEPO Agent Warrants to purchase up to 48,980 shares of common stock.
The BEPO Warrants are immediately exercisable at an exercise price of $183.75 per share and will expire on the five year anniversary of the date of issuance. In connection with the BEPO Placement Agency Agreement, we also issued BEPO Agent Warrants to purchase up to 3,266 shares of common stock.
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.
For the years ended December 31, 2025 and 2024, sales to the top three customers accounted for 33.2% and 47.0% of our revenue, respectively. Of the top three customers for the year ended December 31, 2025, all three customers were different from the top three customers for the comparable period in 2024.
Additionally, the Company agreed to issue registered warrants with an exercise price of $2.28 per share to purchase 1,485,714 shares of Common Stock (the “August Inducement Warrants”) and will expire on the five year anniversary of the issuance date. The August Inducement Warrants may also be exercised on a cashless basis under certain circumstances.
Additionally, the Company agreed to issue registered warrants with an exercise price of $34.20 per share to purchase 99,048 shares of Common Stock (the “August Inducement Warrants”) and will expire on the five year anniversary of the issuance date. The August Inducement Warrants may also be exercised on a cashless basis under certain circumstances.
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.
Gain on Fair value of Contingent Earnout Liabilities The change in fair value of the contingent earnout liability was less than $0.1 million and a gain of $1.4 million for the years ended December 31, 2025 and 2024, respectively, and were related to the non-cash fair value change of the contingent earnout liabilities.
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”).
Additionally, the Company issued warrants to purchase 3,429 shares of the Company's common stock at an exercise price of $326.29 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”).
As a result, our customers have increasingly adopted our technology into their design and production processes. We believe our value is reflected in our sales patterns, as most customers purchase a single machine to validate our technology and purchase additional systems over time as they embed our technology in their product roadmap and manufacturing infrastructure.
We believe our value is reflected in our sales patterns, as most customers purchase a single machine to validate our technology and purchase additional systems over time as they embed our technology in their product roadmap and manufacturing infrastructure.
The January Note may be prepaid in whole or in part at any time without penalty or premium and is convertible in the event of default into shares of the Company’s common stock, at a fixed conversion price of $1.56 per share.
The January Note could be prepaid in whole or in part at any time without penalty or premium and was convertible in the event of default into shares of the Company’s common stock, at a fixed conversion price of $23.40 per share.
The January Note may be prepaid in whole or in part at any time without penalty or premium and is convertible in the event of default into shares of the Company’s common stock, at a fixed conversion price of $1.56 per share.
The January Note could be prepaid in whole or in part at any time without penalty or premium and was convertible in the event of default into shares of the Company’s common stock, at a fixed conversion price of $23.40 per share.
As a percentage of revenue, the gross margin was (5.1)% and (33.9)% for the years ended December 31, 2024 and 2023, respectively.
As a percentage of revenue, the gross margin was (16.1)% and (5.1)% for the years ended December 31, 2025 and 2024, respectively.
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").
The 2022 Private Warrant is exercisable until July 24, 2034 and allows cashless exercise in whole or part. On December 29, 2023, the Company issued warrants to purchase 68,572 shares of the Company's common stock at an exercise price of $299.25 per warrant share (the "RDO Warrants").
We expect research and development costs to increase in 2025 and beyond due to a refreshed technology roadmap to meet our customers' demand in rapidly bring and scale parts in production and to enhance and advance our portfolio of AM solutions.
We expect research and development costs to increase in 2026 and beyond due to a refreshed technology roadmap to meet our customers' demand in RPS and to bring and scale parts production with improvements in utilization efficiency and to enhance and advance our portfolio of AM solutions.
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.
See “Risk Factors - Risks Related to Our Business and Operations—Our existing and planned global operations subject us to a variety of risks and uncertainties that could adversely affect our business, our suppliers and our operating results.” 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.
The practical expedient has been elected to include rents and this non-lease component as one revenue stream recognized over the lease term on a straight-line basis. Costs associated with this component are classified as cost of revenue and recognized as incurred.
The practical expedient has been elected to include rents and this non-lease component as one revenue stream recognized over the lease term on a straight-line basis.
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.
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.
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.
The aggregate gross proceeds to the Company from the Private Placement was approximately $30 million, before deducting placement agent fees and other offering expenses. 61 Key Financial and Operational Metrics We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report titled “ Risk Factors .” We regularly evaluate several metrics, including the metrics presented in the table below, to measure our performance, identify trends affecting our business, prepare financial projections, make strategic decisions and establish performance goals for compensation and we periodically review and revise these metrics to reflect changes in our business. 2025 2024 Revenue ($ in millions) for the year ended December 31 $ 46 $ 41 Bookings ($ in millions) for the year ended December 31 59 31 Backlog ($ in millions) as of December 31 31 16 Bookings ($ in millions): Bookings ($ in millions) are defined as a confirmed order for a 3D printer system and printed parts in contracted dollars.
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.
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 0.2% and 2.6% of revenue for the years ended December 31, 2025 and 2024, respectively.
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.
Selling and Marketing Expenses Selling and marketing expenses were $6.8 million and $12.9 million for the years ended December 31, 2025 and 2024, respectively. There was a decrease of $6.1 million for the year ended December 31, 2025 as compared to 2024.
Liquidity and Capital Resources As of December 31, 2024 and 2023, we had $1.2 million and $31.1 million in cash, cash equivalents and short-term investments, respectively, and an accumulated deficit of $430.3 million and $357.0 million, respectively.
Liquidity and Capital Resources As of December 31, 2025 and 2024, we had $39.0 million and $1.2 million in cash, cash equivalents and short-term investments, respectively, and an accumulated deficit of $498.1 million and $426.8 million, respectively.
See “ Risk Factors–Risks Related to Our Financial Position and Need for Additional Capital – We expect to rely on a limited number of customers for a significant portion of our near-term revenue ” , and see Note 2, Summary of Significant Accounting Policies–Concentration of Credit Risk and Other Risks and Uncertainties , in the notes to the audited consolidated financial statements included elsewhere in this Annual Report .
See “ Risk Factors–Risks Related to Our Financial Position and Need for Additional Capital – We rely on a limited number of customers for a significant portion of our revenue, and adverse developments affecting those customers or their 62 industries could materially harm our business, financial condition and results of operations", and see Note 2, Summary of Significant Accounting Policies–Concentration of Credit Risk and Other Risks and Uncertainties , in the notes to the audited consolidated financial statements included elsewhere in this Annual Report .
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.
Cost of Recurring Payment was less than $0.1 million and $0.9 million for the years ended December 31, 2025 and 2024, respectively. This decrease of $0.9 million was due to fewer equipment on lease and allocable Cost of Support Services as a result of less 3D Printer and parts in service in 2025 compared to 2024.
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.
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, 2025 and 2024 was not material.

… 163 more changes not shown on this page.

Other VELO 10-K year-over-year comparisons