Company: VLDXW
Filing Date: 2025-08-07
Form Type: S-1
Source: 0001641172-25-022475
Chunk: 111

Company: Velo3D, Inc.
Filing Date: 2025-08-07
Form: S-1
Chunk 111
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 on a straight-line basis. Costs associated
with this component are classified as cost of revenue and recognized as incurred.

Costs for warranties for parts and services
for equipment under lease are accrued separately at lease commencement and amortized to cost of revenue over the lease term to the extent
the costs are probable and can be reasonably estimated since the related revenue is being recognized over the lease term. Warranty accruals
were not material as of June 30, 2025, June 30, 2024, December 31, 2024 and December 31, 2023, respectively.

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 include field service engineering,
phone and email support, preventative maintenance, and limited on and off-site consulting support. A subsequent Extended Support Agreement
is available for renewal after the initial period based on the then fair value of the service.

Support Services revenue are recognized evenly
over the contract period beginning with customer performance test acceptance.

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 three and six months ended
June 30, 2025 and 2024. Revenue from parts was also not material for the years ended December 31, 2024 and 2023.

Contracts Assets and Contract Liabilities

Contract assets consist of unbilled receivables
and are recorded when revenue is recognized in advance of scheduled billings to the Company’s customers. A contract asset is recognized
when products or services are transferred to a customer and the right to consideration is conditional on something other than the passage
of time. Contract liabilities include amounts billed or collected which are related to remaining performance obligations. Revenue allocated
to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied,
or partially unsatisfied. It includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods.

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Stock-based Compensation

Stock-based compensation cost for awards is
measured as of the grant date based on its fair value, and the amount is expensed ratably over the service period, which is typically
the vesting period. We have elected to account for forfeitures when they occur, and any