Company: VLDXW
Filing Date: 2025-08-07
Form Type: S-1
Source: 0001641172-25-022475
Chunk: 74

Company: Velo3D, Inc.
Filing Date: 2025-08-07
Form: S-1
Chunk 74
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 to customers and recognized upon transfer of control
to the customer at shipment.

Recurring Payment transactions - are
our leased 3D Printer transactions. We define our Recurring Payment transactions as operating leases. Under the leased 3D Printer transaction,
the customer typically pays an amount for a lease which entitles the customer to a base number of hours of usage. For usage above that
level, the customer typically pays an hourly usage fee. Most of our leases have a 12-month term, though in some instances the lease term
is longer.

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Under this model, the customer typically pays
a base rent and variable payments based on usage in excess of a defined threshold. Most of our leases have a 12-month term, though in
certain cases the lease term is longer.

Rapid Production Solutions (“RPS”) - RPS utilizes our deep engineering expertise, cutting-edge technology and a fleet of Sapphire XC large-format metal 3D printers
to manufacture custom metal components in order to accelerate path to production for our customers. RPS revenue is included under 3D
Printer revenue.

Support Services - are included with
most 3D Printer sale transactions and Recurring Payment transactions. Support services consist of 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 contract period based on the then-fair value of the service, which is paid for separately. Support Service
revenue is recognized over the contract period beginning with customer performance test acceptance.

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 3D Printers also includes allocated overhead costs from headcount-related costs, such as
salaries, stock-based compensation, depreciation of manufacturing related equipment and facilities, and information technology costs.

Cost of Recurring Payment includes depreciation
of the leased equipment over the useful life of five years less the residual value, and an allocated portion of Cost of Support Services.

Cost of RPS includes cost of raw materials,
typically metal powder feedstock, direct and indirect labor, depreciation of 3D printers and other related equipment and facilities,
utilities such as electricity and