Company: VLDXW
Filing Date: 2025-08-07
Form Type: S-1
Source: 0001641172-25-022475
Chunk: 117

Company: Velo3D, Inc.
Filing Date: 2025-08-07
Form: S-1
Chunk 117
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in active markets that are observable for the asset or liability, either directly or indirectly; and

Level 3 — Significant unobservable market
inputs for the asset or liability.

The carrying amounts of cash equivalents,
accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term maturities. The long-term
debt (including convertible notes) with variable interest at market rates is carried at amortized cost, which approximates its fair value
and was classified as Level 2. See Note 9, Long-Term Debt for further information.

| 72 |

Material Weaknesses in Internal Control over Financial Reporting

As described Part II, Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we identified material weaknesses in our internal control over financial reporting. These material weaknesses have not been remediated as of June 30, 2025. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis. 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. Additionally, the lack of a sufficient      
 complement of personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit          
 of our financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance            
 and accounting functions. This material weakness contributed to the following additional material weaknesses.                               |
| ● | We                                                                                                                                          
 did not design and maintain effective controls over the segregation of duties related to journal entries and account reconciliations.       
 Specifically, certain personnel have the ability to both (i) create and post journal entries within our general ledger system and           
 (ii) prepare and review account reconciliations.                                                                                            |
| ● | We                                                                                                                                          
 did not design and maintain effective controls over the accounting and disclosure for debt and equity instruments. Specifically,            
 we did not design and maintain effective controls over the accounting for the issuance and extinguishment of convertible note arrangements, 
 warrants, common stock, and the accounting for earnout liabilities.