Company: VLDXW
Filing Date: 2025-08-20
Form Type: 424B4
Source: 0001641172-25-024892
Chunk: 110

Company: Velo3D, Inc.
Filing Date: 2025-08-20
Form: 424B4
Chunk 110
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 from shipping billed to customers for the three and six months
ended June 30, 2025 and 2024 was not material. Revenue from shipping billed to customers for the years ended December 31, 2024 and
2023 was not material.

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Recurring Payment (operating lease revenue from customers)

The Company enters into Recurring Payment
transactions for customers who do not purchase the 3D Printers (“equipment”). The contracts specifically describes the equipment,
which is a production system with defined components and services including the printer itself, services, and accessories. The asset
is physically distinct, the supplier does not have substitution rights, and the customer holds the right to direct the use of and obtain
substantially all of the economic benefits from the use of the identified asset. The initial lease terms are for 12 months and the Company
has considered the possibility of renewals when determining the length of the contract. The expectation is that customers will not exercise
any renewal or purchase options at the end of the lease. The Company has evaluated our customer history on renewals, returns and purchase
options and has determined the operating lease period of 12 months is appropriate; the Company will continue to monitor customer expectations.
The arrangements provide for a base rent and usually provide for variable payments based on usage in excess of a defined threshold. 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. 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.

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 “Impair