The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our results of operations and financial condition. This discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and our unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report. This discussion contains forward-looking statements based upon our current expectations, estimates and projections, and involves numerous risks and uncertainties. Actual results may differ materially from those contained in any forward-looking statements due to, among other considerations, the matters discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-looking Statements” herein. During the fiscal year ended December 31, 2025, we identified immaterial errors in our previously issued financial statements. We have corrected the amounts as presented in this Item 2 accordingly. Refer to Note 2, Summary of Significant Accounting Policies to the unaudited condensed consolidated interim financial statements included in Part I of this Quarterly Report for additional information regarding the prior-period corrections.
Overview
We seek to fulfill the promise of additive manufacturing, also referred to as 3D printing ("AM"), to deliver breakthroughs in performance, cost, and lead time in the production of high-value metal parts.
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.
Our Sapphire Family of Printers gives 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.
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 Rapid Production Solutions ("RPS") offering. RPS utilizes our deep engineering expertise, cutting-edge technology and a fleet of Sapphire XC large-format metal 3D printer and parts to accelerate path to production for our customers.
Our technology is novel compared to other AM technologies because of its ability to deliver high-value metal parts that have complex internal channels, structures, and geometries. 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. Our customers are primarily original equipment manufacturers ("OEMs") and contract manufacturers ("CMs") who look to AM to solve issues with traditional metal parts manufacturing technologies. 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. 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. However, many of our customers have found that other 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.
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. We believe our value is reflected in our sales patterns, as most of our customers initially purchased a single machine to validate our technology and have purchased additional systems over time as they have embedded our technology in their product roadmap and manufacturing infrastructure. We consider this approach a “land and expand” strategy, oriented around a demonstration of our value proposition followed by increasing penetration with key customers.
Recent Developments
Recent Debt and Equity Transactions
On January 7, 2025, the Company issued a Senior Secured Convertible Promissory Note in the principal amount of $5,000,000 (the "January Note") to Thieneman Properties, LLC, an Indiana limited liability company. The January Note bore interest at a rate of 60.0% per annum, 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 could be prepaid in whole or in part at any time without penalty or premium
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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. On April 7, 2025, the Company made a payment of $750,000, covering the first three months of interest on the January Note.
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. The February Note bore interest at a rate of 30.0% per annum, was payable in full on the date that is six months from the date such tranche was funded (the first tranche and second tranche were received by the Company on February 10, 2025 and March 20, 2025, respectively), in the amount of $5,750,000 and given it was not paid on or prior to such date, would continue to accrue interest at the same rate until paid. 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.
On February 24, 2025, the Company entered into February Warrant Exchange Agreements with each of: (i) Highbridge Tactical Credit Master Fund, L.P. (“HM”); (ii) Highbridge Tactical Credit Institutional Fund, Ltd. (collectively with HM, the “Highbridge Holders”); (iii) Anson Investments Master Fund LP (“AMF”); (iv) Anson East Master Fund LP (collectively with AMF, the “Anson Holders”); (v) High Trail Investments ON LLC (“HTI”), and (vi) HB SPV I Master LLC (together with HTI, the “High Trail Holders”), pursuant to which: (a) the Highbridge Holders and the Anson Holders agreed to exchange an aggregate of 60,150 registered warrants issued in April 2024 and an aggregate of 99,048 registered warrants issued in August 2024, and (b) the High Trail Holders agreed to exchange an aggregate of 151,808 unregistered warrants issued in April 2024 and July 2024, and an aggregate of 19,048 registered warrants issued in December 2023, for an aggregate of 990,159 shares (the “Acquired Shares”) of the Company’s common stock, respectively, equating in each case to an exchange ratio of three Acquired Shares for each warrant.
On August 14, 2025, the Company amended the January Note (the "January Note Amendment"), which amended certain provisions of the January Note, including: an extension of the maturity date under the January Note to February 14, 2027; a reduction of the interest rate under the January Note to 12%; and an adjustment of the fixed conversion price to $16.38 per share. On August 14, 2025, the Company also amended the February Note (the “February Note Amendment”) which, amended certain provisions of the February Note, including: an extension of the maturity dates for each tranche under the February Note to February 14, 2027; a reduction of the interest rate under the February Note to 12%; and an adjustment of the fixed conversion price to $10.50 per share. The Company has evaluated that the note amendments are both treated as a debt modification under ASC Topic 470, Debt.
Immediately prior to the further amendment to the January Note described below, Thieneman Properties, LLC transferred the January Note to Arrayed Notes Acquisition Corp. ("Arrayed"), a Delaware corporation controlled by Arun Jeldi, the Chief Executive Officer and a director of the Company, pursuant to a Convertible Promissory Note Transfer Agreement between Thieneman Properties, LLC (as transferor) and Arrayed (as transferee).
On March 4, 2026, the Company and Arrayed entered into a further amendment to the January Note, which amended certain provisions of the January Note to, among other things, provide that, at any time and from time to time, Arrayed (as holder) has the right, at its option, to convert all or any portion of the outstanding principal amount of the January Note, together with accrued and unpaid interest thereon, into shares of the Company’s common stock.
On March 4, 2026, the Company and Thieneman Construction, Inc. entered into a further amendment to the February Note, which amended certain provisions of the February Note to, among other things, provide that, subject to the existing terms of the February Note, accrued and unpaid interest thereon, in addition to the outstanding principal amount, may be convertible into common stock at the holder’s option.
On March 4, 2026, the Company issued 394,517 shares of common stock to Arrayed upon conversion of the January Note, in the principal amount of $5,000,000, together with accrued and unpaid interest thereon, at a conversion price of $16.38 per share, a premium to the Company’s share price on March 4, 2026. As of such date, the January Note (including principal and interest) was fully converted into shares of common stock of the Company.
On March 4, 2026, the Company issued 1,145,830 shares of common stock to Thieneman Construction, Inc. upon conversion of the February Note, in the principal amount of $10,000,000, together with accrued and unpaid interest thereon, at a conversion price of $10.50 per share. As of such date, the February Note (including principal and interest) was fully converted into shares of common stock of the Company.
2025 Reverse Stock Split
Effective July 28, 2025, we implemented a 1-for-15 reverse stock split of our issued and outstanding common stock. The reverse stock split was effected by the filing of a certificate of amendment (the “Amendment”) to our Certificate of Incorporation with the
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Secretary of State of the State of Delaware, without any change to par value or the number of authorized shares of common stock. The Amendment became effective upon such filing. No fractional shares were issued in connection with the reverse stock split as all fractional shares were rounded up to the next whole share. All share and per share amounts of our common stock listed in this Quarterly Report have been adjusted, as applicable, to give effect to the reverse stock split.
See Note 1, Description of Business and Basis of Presentation, for additional information on the 2025 reverse stock split in the notes to our unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report.
August 2025 Offering
On August 19, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC, as representative of the several underwriters named therein (the “Representative”), relating to the public offering of 5,833,333 shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share, at a purchase price per share of $3.00 (the “Offering Price”). Pursuant to the Underwriting Agreement, the Company also granted the Representative a 30-day option to purchase up to an additional 875,000 shares of common stock at the Offering Price, less any underwriting discounts and commissions, which was exercised in full.
The offering closed on August 20, 2025 (the "August 2025 Offering"). Gross proceeds of $20.1 million was received from the August 2025 Offering of 5,833,333 shares of the Company's common stock ($17.5 million) and the exercise of the Representative option to purchase 875,000 shares of common stock. Net proceeds from the August 2025 Offering were approximately $17.8 million after deducting $2.3 million in the underwriting discounts and commissions, and other estimated offering expenses payable by the Company for legal and audit services. The Company intends to use the net proceeds of this offering for working capital, capital expenditures and general corporate purposes.
Amendment to Company’s Certificate of Incorporation allowing stockholders to act by written consent
On June 27, 2025, the stockholders of the Company, approved an amendment (the “Written Consent Amendment”) to the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to remove Section 1 of Article VIII of the Certificate of Incorporation, which prohibited stockholder action by written consent without a stockholder meeting. On July 1, 2025, the Written Consent Amendment was filed with the Secretary of State of the State of Delaware, and the Written Consent Amendment became effective on such date. As a result of the Written Consent Amendment, stockholders are now permitted to act by written consent to the extent permitted under the Delaware General Corporation Law.
2025 Equipment Loan
On December 8, 2025, the Company and Varilease Finance, Inc. (“Varilease”) entered into a Sale Leaseback Agreement (the “Sale Leaseback Agreement”) pursuant to which the Company agreed to sell to Varilease, and subject to the conditions set forth therein, Varilease agreed to purchase from the Company, assorted Velo3D Sapphire and Sapphire XC metal 3D printers and post processing tools and equipment owned and used by the Company (the “Equipment”). The aggregate purchase price for the Equipment to be received by the Company is $10 million and reported as debt (the "Equipment Loan"). For more information, see Note 9, Debt, in the notes to the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report.
2025 Private Investment in Public Equity ("2025 PIPE")
On December 22, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional accredited investors (the “Purchasers”), for the issuance and sale in a private placement of an aggregate of 3,636,363 shares of the Company’s common stock, at a purchase price of $8.25 per share. The foregoing transaction is referred to herein as the “Private Placement.” On December 23, 2025, the parties consummated the Private Placement. The aggregate gross proceeds to the Company from the Private Placement was approximately $30 million, before deducting placement agent fees and other offering expenses.
April 2026 Offering
On April 27, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Cantor Fitzgerald & Co., as underwriter (the “Underwriter”), relating to the offer and sale in a firm commitment underwritten registered direct offering (the “Offering”) of 3,571,428 shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share. The Shares were sold at a public offering price per share of $14.00. The gross proceeds from the Offering were approximately $50 million, before deducting underwriting discounts and commissions and other offering expenses of $3.4 million. The Company currently intends to use the net proceeds of the Offering for working capital and general corporate purposes.
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At the Market Offering
On May 15, 2026, the Company entered into a sales agreement (the “Sales Agreement”) with Needham & Company, LLC ("Needham"), Cantor Fitzgerald & Co. ("Cantor") and Craig-Hallum Capital Group, LLC ("Craig-Hallum") (each, a “Sales Agent,” and collectively, the “Sales Agents”), acting as sales agents and/or principals. Pursuant to the terms of the Sales Agreement, the Company may sell from time to time to or through any Sales Agent shares of the Company’s common stock, par value $0.00001 per share (the “Shares”), having an aggregate offering price of up to $100,000,000 (the “Offering”). Sales of Shares, if any, under the Sales Agreement may be made in any transactions permitted by law that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act. See Note 16, At-the-Market Offering for further information.
Notwithstanding the recent debt and equity transactions, as described under “—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 these unaudited condensed consolidated interim financial statements, management concluded that substantial doubt continues to exist about the Company's ability to continue as a going concern. Although the Company significantly improved its liquidity position during the six months ended June 30, 2026 through equity financings, debt conversions and debt repayments, management expects that additional financing will be required to fund operations and satisfy obligations during the assessment period due to continued operating losses, negative operating cash flows and ongoing working capital requirements. There can be no assurance that additional financing will be available on acceptable terms, or at all. If the Company is unable to obtain additional financing or otherwise improve its liquidity, it may be required to significantly reduce or discontinue operations, sell assets, pursue strategic alternatives, restructure its obligations or seek protection under applicable bankruptcy laws.
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 herein and in the section of the 2025 Form 10-K 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.
As of and for the As of and for the
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Revenue ($ in millions) $ 21 $ 14 $ 34 $ 23
Bookings ($ in millions) $ 29 $ 12 $ 37 $ 20
Backlog ($ in millions) $ 31 $ 16 $ 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.
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.
Customer Concentration
Our operating results for the foreseeable future will continue to depend on sales to a small group of customers. For the three months ended June 30, 2026 and 2025, sales to the top three customers accounted for 45.9% and 65.2%, respectively, of our revenue. Of the top three customers for the three months ended June 30, 2026, all three customers were different from the top three customers for the comparable period in 2025. For the six months ended June 30, 2026 and 2025, sales of the top three customers accounted for 33.9% and 54.6%, respectively, of our revenue. Of the top three customers for the six months ended June 30, 2026, all three customers were different from the top three customers for the comparable period in 2025.
While our objective is to diversify our customer base, we continue to be susceptible to risks associated with customer concentration. 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” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Also see Note 5, Revenue—Customer Concentration, in the notes to the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report.
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Continued Investment and Innovation
We continue to be a customer-focused company working to develop innovative solutions to address customers’ needs and focus on our customers to identify the most impactful areas for research and development as we seek to further improve the capabilities of our AM solutions. We believe this process has contributed significantly to our development of the most advanced metal AM systems in the world. We believe that continued investments in our products are important to our future growth and, as a result, we will invest in enhancing our portfolio of AM solutions through certain research and development projects based on customer demand.
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. In 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.
Refer to Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which contains descriptions of significant risks: “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. In addition, extreme weather and other natural disasters may become more intense or more frequent, which may disrupt our operations or the operations of our suppliers and customers.
Components of Results of Operations
Revenue
Our revenue is primarily derived from our AM fully integrated hardware and software solution based on our proprietary L-PBF technology. Our products include 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”). 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 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 (“Recurring Payment”). Support services are included with a 3D Printer sale transaction and a Recurring Payment transaction. For 3D Printer sale transactions where the support service period has expired, customers may purchase extended support service contracts.
3D Printer and parts sale transactions - fixed purchase price model. The timeframe from order to completion of the site acceptance test usually occurs over three to nine months. As we scale our production, we expect to reduce this timeframe. Contract consideration allocated to the 3D Printer is recognized at a point in time, which occurs upon transfer of control to the customer at shipment.
The initial sales of 3D Printers and Support Services are included in one contract and are invoiced together. Contract consideration is allocated between the two performance obligations based on relative fair value. This allocation involves judgment and is periodically updated as new relevant information becomes available.
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Other revenue included under 3D Printer and parts sales includes parts and consumables, such as filters, powder or build plates, that are sold to customers and recognized upon transfer of control to the customer at shipment.
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 the path to production for our customers. RPS revenue is included under 3D Printer and parts revenue.
Recurring Payment transactions - 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.
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 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, cost of RPS solutions, 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 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 specialty gases, shipping costs and other directly associated costs. Cost of RPS is included under 3D Printer and parts cost of revenue.
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 Support Services includes the cost of spare or replacement parts for preventive maintenance, installation costs, headcount-related costs such as salaries, stock-based compensation, depreciation of manufacturing related equipment and facilities, and information technology costs. The headcount-related costs are directly associated with the engineers dedicated to remote and on-site support, training, travel costs and other services costs.
Gross Profit and Gross Margin
Our gross profit is revenue less cost of revenue and our gross margin is gross profit as a percentage of revenue. The gross profit and gross margin for our products are varied and are expected to continue to vary from period to period due to the mix of products and services sold through a 3D Printer sale transaction, a Recurring Payment transaction, RPS offerings, services contracts, new product introductions and efforts to optimize our operational costs. 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.
Research and Development Expenses
Our research and development expenses represent costs incurred to support activities that advance the development of innovative AM technologies, new product platforms and consumables, as well as activities that enhance the capabilities of our existing product platforms. Our research and development expenses consist primarily of salaries and related personnel costs for individuals working in our research and development departments, including stock-based compensation, prototypes, design expenses, information technology costs and software license amortization, consulting and contractor costs, and an allocated portion of overhead costs, including depreciation of property and equipment used in research and development activities.
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Selling and Marketing Expenses
Sales and marketing expenses consist primarily of salaries and related personnel costs for individuals working in our sales and marketing departments, including stock-based compensation, costs related to trade shows and events, advertising, marketing promotions, travel costs and an allocated portion of overhead costs, including information technology costs and costs for customer validation.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related personnel costs for individuals associated with our executive, administrative, finance, legal, information technology and human resources functions, including stock-based compensation, professional fees for legal, audit and compliance, accounting and consulting services, general corporate costs, facilities, rent, information technology costs, insurance, bad debt expenses and an allocated portion of overhead costs, including equipment and depreciation and other general and administrative expenses.
Interest Expense
Interest expense primarily consists of interest incurred under our outstanding debt and finance leases.
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 which are subject to remeasurement at each balance sheet date.
Gain (Loss) on Fair value of Contingent Earnout Liabilities
Gain (loss) on valuation of contingent earnout liabilities relates to the changes in fair value of the contingent earnout liabilities in connection with the earnout shares, which are subject to remeasurement at each balance sheet date.
Loss on warrant cancellation
Loss on warrant cancellation relates to the loss recognized in conjunction with the February 2025 Warrant Exchange Agreements.
Other Income (Expense), Net
Other income (expense), net includes interest earned on our bank sweep account, gains and losses on disposals of fixed assets, transaction costs related to the warrant inducement transaction and other miscellaneous income/expenses.
Income Taxes
There was minimal federal and state income tax expense (benefit) recorded during the periods presented due to projected losses, and we maintained a full valuation allowance on the deferred tax assets as of June 30, 2026 and 2025.
We will continue to review our conclusions about the appropriate amount of the valuation allowance on a quarterly basis. If we were to generate profits, the U.S. valuation allowance position could be reversed in the foreseeable future. We 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.
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Results of Operations
Comparison of the Three Months Ended June 30, 2026 and 2025:
The following table summarizes our historical results of operations for the periods presented:
Three Months Ended June 30,
2026 2025 Change %
(In thousands, except for percentages)
Revenue
3D Printer and parts $18,968 $12,082 $6,886 57.0%
Recurring payment — 70 (70) (100.0)%
Support services 1,494 1,359 135 9.9%
Other 202 61 141 231.1%
Total Revenue 20,664 13,572 7,092 52.3%
Cost of revenue
3D Printer and parts 15,755 13,994 1,761 12.6%
Support services 467 1,166 (699) (59.9)%
Total cost of revenue 16,222 15,160 1,062 7.0%
Gross profit (loss) 4,442 (1,588) 6,030 NM
Operating expenses
Research and development 4,329 2,588 1,741 67.3%
Selling and marketing 2,850 1,468 1,382 94.1%
General and administrative 8,324 5,952 2,372 39.9%
Total operating expenses 15,503 10,008 5,495 54.9%
Loss from operations (11,061) (11,596) 535 (4.6)%
Interest expense (175) (1,572) 1,397 (88.9)%
Loss on fair value of warrants (41) — (41) (100.0)%
Other expense, net (242) (6) (236) 3933.3%
Loss before income taxes (11,519) (13,174) 1,655 (12.6)%
Provision for (benefit from) income taxes (9) 89 (98) (110.1)%
Net loss $(11,510) $(13,263) $1,753 (13.2)%
NM = Not Meaningful
Revenue
The following table presents the revenue disaggregated by products and service type, as well as the percentage of total revenue.
Three Months Ended June 30,
2026 2025 Change %
(In thousands, except for percentages)
Revenue
3D Printer and parts sales $18,968 91.8% $12,082 89.0% $6,886 57.0%
Recurring payment — — 70 0.5% (70) (100.0)%
Support services 1,494 7.2% 1,359 10.0% 135 9.9%
Other 202 1.0% 61 0.4% 141 231.1%
Total Revenue $20,664 100.0% $13,572 100.0% $7,092 52.3%
Total revenue for the three months ended June 30, 2026 and 2025 was $20.7 million and $13.6 million, respectively, an increase of $7.1 million, or 52.3%.
3D Printer and parts sales were $19.0 million and $12.1 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $6.9 million. The increase in revenue was primarily attributed to an increase in the average selling price, product mix,
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and an increase in RPS revenues related to an increase in production volume for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.
Recurring Payment revenue, structured as an operating lease, was $0.0 million for the three months ended June 30, 2026 and less than $0.1 million for the three months ended June 30, 2025.
Our Support Services revenue was $1.5 million and $1.4 million for the three months ended June 30, 2026 and 2025, respectively, an increase of less than $0.1 million. Support Services revenue is primarily due to services provided to customers based on the installed base requiring preventive maintenance and other support services.
Other revenue was $0.2 million and less than $0.1 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $0.1 million.
As part of our Strategic Realignment started in 2025, we have implemented new go-to-market and service strategies to rebuild our bookings and backlog pipeline. As we rebuild our bookings and backlog, we expect the demand for the Sapphire, Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ to increase our revenue in the future. We expect Recurring Payment revenue to decrease as we continue to shift our focus to 3D Printer system sales and RPS for printed parts. We expect our Support Service revenue to increase as the number of systems we have in the field increases. As of June 30, 2026 our backlog for firm orders was $31 million for 3D Printer and printed parts. Our focus for revenue has shifted to ensuring customer success, improving system reliability to strengthen our existing customer network, developing new customer networks to increase demand and expanding our RPS for printed parts.
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.
Three Months Ended June 30,
2026 2025 Change %
(In thousands, except for percentages)
Cost of Revenue
Cost of 3D Printers and parts $15,755 97.1% $13,994 92.3% $1,761 12.6%
Cost of Support Services 467 2.9% 1,166 7.7% (699) (59.9)%
Total Cost of Revenue $16,222 100.0% $15,160 100.0% $1,062 7.0%
Total cost of revenue for the three months ended June 30, 2026 and 2025 was $16.2 million and $15.2 million, respectively, an increase of $1.1 million, or 7.0%. While overall cost of revenue increased consistently with the increase in sales, during the second quarter of 2026, the cost of revenue also reflected the impact of a prospective refinement in the allocation of certain labor and overhead costs between cost of revenue and operating expenses to align with current operational activities, which offset this increase from sales.
Cost of 3D Printer and parts was $15.8 million and $14.0 million for the three months ended June 30, 2026 and 2025, respectively. The increase of $1.8 million primarily reflected differences in product mix and an increase in RPS volume for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. We expect manufacturing costs to improve as a percentage of revenue as a result of overhead and fixed cost reduction initiatives implemented in late 2025 and increased production volumes leading to economies of scale.
Cost of Support Services was $0.5 million and $1.2 million for the three months ended June 30, 2026 and 2025, respectively. Cost of Support Services decreased by $0.7 million, primarily reflected lower direct customer support costs and changes in employee responsibilities supporting existing customers.
Cost of revenue as a percentage of revenue was 78.5% and 111.7% for the three months ended June 30, 2026 and 2025, respectively. The decrease was primarily attributable to a more favorable product mix and the impact of a prospective refinement in the allocation of certain labor and overhead costs between cost of revenue and operating expenses to align with current operational activities.
We may experience increasing component costs from our suppliers due to international tariffs and our current financial situation. We are currently unable to secure credit terms and volume discounts with our suppliers, causing us to pay a premium, in advance, or source from alternate suppliers at unfavorable terms for our products. This has negatively impacted our cost of revenue and will continue to negatively impact our cost of revenue until our financial condition improves and costs associated with tariffs ease.
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We continue to focus on reducing material costs through improved purchasing and inventory planning, accelerating production cycle times and improving efficiencies on the production floor. These operational initiatives are expected to continue reducing manufacturing costs and improve gross margins over time.
Gross Profit and Gross Margin
Total gross profit (loss) was $4.4 million and ($1.6) million for the three months ended June 30, 2026 and 2025, respectively. As a percentage of revenue, the gross margin was 21.5% and (11.7)% for the three months ended June 30, 2026 and 2025, respectively. The improvement primarily reflected the impact of a prospective refinement in the allocation of certain labor and overhead costs between cost of revenue and operating expenses to align with current operational activities, as well as higher average selling prices, a more favorable product mix, increased RPS revenue, and manufacturing efficiencies.
Our gross profit and gross margin are influenced by a number of factors, including:
•Product mix of Sapphire, and Sapphire XC 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 improve efficiencies on the production floor, which we expect will continue to improve gross profit and gross margin during the second half of 2026. Ongoing trends in component costs, tariffs and supplier pricing may continue to negatively impact gross profit until our financial condition improves.
Research and Development Expenses
Research and development expenses were $4.3 million and $2.6 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $1.7 million. The increase in research and development expenses was driven by a $0.6 million increase in headcount, salaries and employee-related expenses, an increase of $0.6 million in stock-based compensation, and an increase of $0.5 million in other costs, primarily reflecting higher facility-related costs and overhead allocations. Research and development projects in 2026 are focused primarily on projects aligned with increasing the reliability experience for customers.
We expect research and development costs to increase for the remainder of 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.
Selling and Marketing Expenses
Selling and marketing expenses were $2.9 million and $1.5 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $1.4 million. The increase was attributable to $0.7 million increase in facility and overhead costs, an increase of $0.3 million in headcount, salaries and employee-related expenses, a $0.3 million increase in stock-based compensation, and a $0.1 million increase in marketing costs and initiatives spending.
We expect selling and marketing expenses to continue to increase for the remainder of 2026 and beyond as we re-ignite sales and marketing efforts by participating in certain markets, such as defense and aerospace, that show interest in additive manufacturing solutions. We expect an increase in selling and marketing expenses for trade show, marketing initiatives and branding expenses.
General and Administrative Expenses
General and administrative expenses were $8.3 million and $6.0 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $2.4 million. The increase was attributable to an increase of $1.2 million in legal and professional services, an increase of $1.0 million in facility and overhead costs and a $0.3 million increase in stock-based compensation, offset by a decrease of $0.1 million in headcount, salaries and employee-related expenses.
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We expect general and administrative expenses to increase as we expand our business. However, we also continue to focus on our company-wide initiatives to reduce operating costs in other areas for 2026 as we reduce our general and administrative expenses through reducing our reliance on outside consultants, managing facility costs and negotiating with vendors for improved pricing and enterprise level efficiency improvements. We expect that related general and administrative expenses for advisory, consulting, legal and accounting fees may increase with Company projects related to the expansion in RPS with a new manufacturing facility.
Interest Expense
Interest expense was $0.2 million and $1.6 million for the three months ended June 30, 2026 and 2025, respectively. The decrease was due to the reduction of the outstanding balances in the Senior Secured Notes and Convertible Secured Notes.
We expect our interest expense will continue to decrease as a result of our lower outstanding debt balances.
Loss on Fair Value of Warrants
The loss on fair value of warrants was less than $0.1 million and $0.0 million for the three months ended June 30, 2026 and 2025, respectively. The change was related to the non-cash fair value change of the warrant liabilities driven by the relative change in our stock price.
Other Expense, Net
Other expense, net was $0.2 million and less than $0.1 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $0.2 million. The increase was primarily driven by a non-recurring other business expense, slightly offset by higher interest income for the second quarter of 2026.
Income Taxes
Less than $0.1 million of a provision for (benefit from) federal and state income taxes was recorded for both the three months ended June 30, 2026 and 2025 due to projected losses, and we maintained a full valuation allowance on the deferred tax assets as of June 30, 2026 and December 31, 2025.
We will continue to review our conclusions about the appropriate amount of the valuation allowance on a quarterly basis. If we were to generate profits in the remainder of 2026 and beyond, the U.S. valuation allowance position could be reversed in the foreseeable future. We 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.
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Results of Operations
Comparison of the Six Months Ended June 30, 2026 and 2025:
The following table summarizes our historical results of operations for the periods presented:
Six Months Ended June 30,
2026 2025 Change %
(In thousands, except for percentages)
Revenue
3D Printer and parts $ 30,989 $ 19,605 $ 11,384 58.1 %
Recurring payment — 70 (70 ) (100.0 )%
Support services 2,763 3,149 (386 ) (12.3 )%
Other 728 68 660 970.6 %
Total Revenue 34,480 22,892 11,588 50.6 %
Cost of revenue
3D Printer and parts 25,980 21,534 4,446 20.6 %
Recurring payment — 12 (12 ) (100.0 )%
Support services 1,677 2,237 (560 ) (25.0 )%
Total cost of revenue 27,657 23,783 3,874 16.3 %
Gross profit (loss) 6,823 (891 ) 7,714 NM
Operating expenses
Research and development 7,025 4,647 2,378 51.2 %
Selling and marketing 4,571 2,554 2,017 79.0 %
General and administrative 13,236 15,028 (1,792 ) (11.9 )%
Total operating expenses 24,832 22,229 2,603 11.7 %
Loss from operations (18,009 ) (23,120 ) 5,111 (22.1 )%
Interest expense (908 ) (2,642 ) 1,734 (65.6 )%
Loss on fair value of warrants (41 ) (1,044 ) 1,003 (96.1 )%
Loss on warrant cancellation — (11,357 ) 11,357 (100.0 )%
Other income (expense), net 467 (17 ) 484 (2847.1 )%
Loss before income taxes (18,491 ) (38,180 ) 19,689 (51.6 )%
Provision for (benefit from) income taxes 17 97 (80 ) (82.5 )%
Net loss $ (18,508 ) $ (38,277 ) $ 19,769 (51.6 )%
NM = Not Meaningful
Revenue
The following table presents the revenue disaggregated by products and service type, as well as the percentage of total revenue.
Six Months Ended June 30,
2026 2025 Change %
(In thousands, except for percentages)
Revenue
3D Printer and parts sales $ 30,989 89.9 % $ 19,605 85.6 % $ 11,384 58.1 %
Recurring payment — — 70 0.3 % (70 ) 100.0 %
Support services 2,763 8.0 % 3,149 13.8 % (386 ) (12.3 )%
Other Revenue 728 2.1 % 68 0.3 % 660 970.6 %
Total Revenue $ 34,480 100.0 % $ 22,892 100.0 % $ 11,588 50.6 %
Total revenue for the six months ended June 30, 2026 and 2025 was $34.5 million and $22.9 million, respectively, an increase of $11.6 million, or 50.6%.
3D Printer and parts sales were $31.0 million and $19.6 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $11.4 million. The increase in revenue was primarily attributed to an increase in the average selling price, product mix, and
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an increase in RPS revenues related to an increase in production volume for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
Recurring Payment revenue, structured as an operating lease, was $0.0 million for the six months ended June 30, 2026 and less than $0.1 million for the six months ended June 30, 2025.
Our Support Services revenue was $2.8 million and $3.1 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of $0.4 million. Support Services revenue is primarily due to services provided to customers based on the installed base requiring preventive maintenance and other support services.
Other revenue was $0.7 million and less than $0.1 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $0.7 million.The increase was primarily attributable to higher software revenue during the six months ended June 30, 2026.
As part of our Strategic Realignment started in 2025, we have implemented new go-to-market and service strategies to rebuild our bookings and backlog pipeline. As we rebuild our bookings and backlog, we expect the demand for the Sapphire, Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ to increase our revenue in the future. We expect Recurring Payment revenue to decrease as we continue to shift our focus to 3D Printer system sales and RPS for printed parts. We expect our Support Service revenue to increase as the number of systems we have in the field increases. As of June 30, 2026, our backlog for firm orders was $31 million for 3D Printer and printed parts. Our focus for revenue has shifted to ensuring customer success, improving system reliability to strengthen our existing customer network, developing new customer networks to increase demand and expanding our RPS for printed parts.
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.
Six Months Ended June 30,
2026 2025 Change %
Cost of Revenue
Cost of 3D Printers and parts $ 25,980 93.9 % $ 21,534 90.5 % $ 4,446 20.6 %
Cost of Recurring Payment — — 12 0.1 % (12 ) (100.0 )%
Cost of Support Services 1,677 6.1 % 2,237 9.4 % (560 ) (25.0 )%
Total Cost of Revenue $ 27,657 100.0 % $ 23,783 100.0 % $ 3,874 16.3 %
Total cost of revenue for the six months ended June 30, 2026 and 2025 was $27.7 million and $23.8 million, respectively, an increase of $3.9 million, or 16.3%. While overall cost of revenue increased consistently with the increase in sales, during the second quarter of 2026, the cost of revenue also reflected the impact of a prospective refinement in the allocation of certain labor and overhead costs between cost of revenue and operating expenses to align with current operational activities, which offset this increase from sales.
Cost of 3D Printer and parts was $26.0 million and $21.5 million for the six months ended June 30, 2026 and 2025, respectively. The increase of $4.4 million primarily reflected differences in product mix and higher RPS volume during the current period. We expect manufacturing costs to improve as a percentage of revenue as a result of overhead and fixed cost reduction initiatives implemented in late 2025 and increased production volumes leading to economies of scale.
Cost of Recurring Payment was $0.0 million and less than $0.1 million for the six months ended June 30, 2026 and 2025, respectively.
Cost of Support Services was $1.7 million and $2.2 million for the six months ended June 30, 2026 and 2025, respectively. Cost of Support Services decreased by $0.6 million, primarily due to lower direct customer support costs and changes in employee responsibilities supporting existing customers.
Cost of revenue as a percentage of revenue was 80.2% and 103.9% for the six months ended June 30, 2026 and 2025, respectively. The decrease was primarily attributable to a more favorable product mix and the impact of a prospective refinement in the allocation of certain labor and overhead costs between cost of revenue and operating expenses to align with current operational activities.
We may experience increasing component costs from our suppliers due to international tariffs and our current financial situation. We are currently unable to secure credit terms and volume discounts with our suppliers, causing us to pay a premium, in advance, or
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source from alternate suppliers at unfavorable terms for our products. This has negatively impacted our cost of revenue and will continue to negatively impact our cost of revenue until our financial condition improves and costs associated with tariffs ease.
We continue to focus on reducing material costs through improved purchasing and inventory planning, accelerating production cycle times and improving production efficiencies to lower cost of revenue. These operational initiatives are expected to continue improving manufacturing efficiency and gross margins over time.
Gross Profit (Loss) and Gross Margin
Total gross profit (loss) was $6.8 million and ($0.9) million for the six months ended June 30, 2026 and 2025, respectively. As a percentage of revenue, the gross margin was 19.8% and (3.9)% for the six months ended June 30, 2026 and 2025, respectively. The improvement primarily reflected the impact of a prospective refinement in the allocation of certain labor and overhead costs between cost of revenue and operating expenses to align with current operational activities, as well as higher average selling prices, a more favorable product mix, increased RPS revenue, and manufacturing efficiencies.
Our gross profit and gross margin are influenced by a number of factors, including:
•Product mix of Sapphire, and Sapphire XC 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 improve efficiencies on the production floor, which we expect will continue to improve gross profit and gross margin during the second half of 2026. Ongoing trends in component costs, tariffs and supplier pricing may continue to negatively impact gross profit and gross margin until our financial condition improves.
Research and Development Expenses
Research and development expenses were $7.0 million and $4.6 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $2.4 million. The increase in research and development expenses was driven by a $1.4 million increase in headcount, salaries and employee-related expenses, an increase of $0.7 million in stock-based compensation, and an increase of $0.3 million in facility and overhead costs. Research and development projects in 2026 are focused primarily on projects aligned with increasing the reliability experience for customers.
We expect research and development expenses to increase during the remainder of 2026 and beyond as we execute our refreshed technology roadmap, expand our RPS capabilities, improve system utilization efficiency and continue to enhance our portfolio of additive manufacturing solutions.
Selling and Marketing Expenses
Selling and marketing expenses were $4.6 million and $2.6 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $2.0 million. The increase was attributable to an increase of $0.8 million in headcount, salaries and employee-related expenses, a $0.5 million increase in stock-based compensation, an increase of $0.4 million in facility and overhead costs, and a $0.3 million increase in marketing initiatives and trade show spending.
We expect selling and marketing expenses to increase during the remainder of 2026 and beyond as we expand our commercial activities, including increased participation in the defense and aerospace markets, and continue investing in trade shows, marketing initiatives and brand awareness.
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General and Administrative Expenses
General and administrative expenses were $13.2 million and $15.0 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of $1.8 million. The decrease was attributable to a $2.2 million decrease in stock-based compensation, and a decrease of $0.4 million in headcount, salaries and employee-related expenses; offset by an increase of $0.6 million in legal and professional services and $0.2 million in facilities and overhead costs.
We expect general and administrative expenses to increase as we support the continued growth of the business, including projects related to the expansion of our RPS manufacturing operations. At the same time, we remain focused on managing operating costs through reduced reliance on outside consultants, ongoing facility cost management and vendor negotiations designed to improve enterprise-wide efficiencies.
Interest Expense
Interest expense was $0.9 million and $2.6 million for the six months ended June 30, 2026 and 2025, respectively. The decrease was due to the reduction of the outstanding balances in the Senior Secured Notes and Convertible Secured Notes.
We expect our interest expense will continue to decrease as a result of our lower outstanding debt balances.
Loss on Fair Value of Warrants
The loss on fair value of warrants was less than $0.1 million and $1.0 million for the six months ended June 30, 2026 and 2025, respectively. The change was related to the non-cash fair value change of the warrant liabilities driven by the relative change in our stock price.
Loss on Warrant Cancellation
Loss on warrant cancellation was $11.4 million for the six months ended June 30, 2025 and related to the loss recognized in conjunction with the February 2025 Warrant Exchange transaction.
Other Income (Expense), Net
Other income (expense), net was income of $0.5 million and expense of less than $0.1 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $0.5 million. The increase was primarily driven by higher interest income for the first half of 2026.
Income Taxes
Less than $0.1 million of a provision for federal and state income taxes was recorded for both the six months ended June 30, 2026 and 2025 due to projected losses, and we maintained a full valuation allowance on the deferred tax assets as of June 30, 2026 and December 31, 2025.
We will continue to review our conclusions about the appropriate amount of the valuation allowance on a quarterly basis. If we were to generate profits in the remainder of 2026 and beyond, the U.S. valuation allowance position could be reversed in the foreseeable future. We 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.
Liquidity and Capital Resources
As of June 30, 2026, we had approximately $91.1 million in cash and cash equivalents on hand and $8.4 million in accounts receivable, net. Our business requires significant cash to fund operating activities, including employee compensation, purchases of components and subassemblies, manufacturing operations, working capital requirements and general corporate expenses.
Our purchase commitments with suppliers are generally cancellable prior to shipment. As of June 30, 2026, we had approximately $31.5 of non-cancellable purchase commitments for components and assemblies, which are expected to be delivered primarily during the remainder of 2026. These purchase commitments support anticipated production requirements and are expected to be funded through operating cash flows and available liquidity. See Note 8, Leases, in the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report for additional information regarding our lease commitments.
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During the six months ended June 30, 2026, we strengthened our liquidity position through the completion of a firm commitment underwritten registered direct offering, sales under our At-the-Market ("ATM") equity program, the conversion of our previously outstanding secured convertible notes into equity by the holders thereof and the repayment of certain debt obligations. Despite these improvements, we continue to incur operating losses and negative operating cash flows, and our business requires significant ongoing working capital to support manufacturing operations and customer deliveries.
Management evaluated the Company's liquidity in accordance with ASC 205-40 and considered current cash balances, historical and projected operating cash flows, recurring working capital requirements, scheduled debt obligations and available financing alternatives. Although our liquidity position improved significantly during the six months ended June 30, 2026, management concluded that substantial doubt continues to exist about our ability to continue as a going concern because we expect to require additional financing to fund operations during the twelve-month period following the issuance of the financial statements included in this Quarterly Report. See Note 1, Description of Business and Basis of Presentation—Going Concern, Financial Condition and Liquidity and Capital Resources, in the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report for additional information.
We intend to continue pursuing additional sources of capital, including equity and debt financings and other strategic financing alternatives. There can be no assurance that additional financing will be available on acceptable terms, or at all. If we are unable to obtain additional financing or otherwise improve our liquidity, we may be required to significantly reduce operating expenditures, delay strategic initiatives, sell assets, restructure obligations or pursue other strategic alternatives.
On April 27, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Cantor Fitzgerald & Co., as underwriter (the “Underwriter”), relating to the offer and sale in a firm commitment underwritten registered direct offering (the “Offering”) of 3,571,428 shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share. The Shares were sold at a public offering price per share of $14.00. The gross proceeds from the Offering were approximately $50 million, before deducting underwriting discounts and commissions and other offering expenses of $3.4 million.
On May 15, 2026, Velo3D, Inc. (the “Company”) entered into a sales agreement (the “Sales Agreement”) with Needham & Company, LLC ("Needham"), Cantor Fitzgerald & Co. ("Cantor") and Craig-Hallum Capital Group, LLC ("Craig-Hallum") (each, a “Sales Agent,” and collectively, the “Sales Agents”), acting as sales agents and/or principals. Pursuant to the terms of the Sales Agreement, the Company may sell from time to time to or through any Sales Agent shares of the Company’s common stock, par value $0.00001 per share (the “Shares”), having an aggregate offering price of up to $100,000,000 (the “Offering”). Sales of Shares, if any, under the Sales Agreement may be made in any transactions permitted by law that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act. See Note 16, At-the-Market Offering for further information.
Our ability to satisfy future liquidity requirements will depend on a number of factors, including our ability to increase revenue, improve gross margins, manage working capital efficiently, control operating expenses, execute our strategic initiatives and access additional sources of capital. Actual results may differ from our current expectations due to market conditions, customer demand, macroeconomic conditions and other factors beyond our control.
Debt Facilities
As of June 30, 2026, our outstanding debt consisted solely of the 2025 Equipment Loan, with an aggregate principal of approximately $8.2 million.
We do not hedge our exposure to changes in interest rates. A 10% change in interest rates may have a material impact on annualized interest expense.
For more information, see Note 9, Debt, in the notes of the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report.
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Cash Flow Summary
The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:
Six Months Ended June 30,
2026 2025 Change
(In thousands)
Net cash used in operating activities $(39,533) $(13,565) $(25,968)
Net cash used in investing activities $(4,458) $(1,799) $(2,659)
Net cash provided by financing activities $99,469 $15,000 $84,469
Operating Activities
Net cash used in operating activities for the six months ended June 30, 2026 was $39.5 million, consisting primarily of a net loss of $18.5 million, non-cash loss of $6.0 million described below, and a decrease in net operating assets of $27.0 million. The cash used from net operating assets was comprised of a decrease from prepaid expenses and other current assets of $11.2 million, a decrease from contract assets of $10.1 million, a decrease from accounts payable of $8.2 million, a decrease from accrued expenses and other current liabilities of $4.3 million, a decrease from account receivable of $2.1 million, and a decrease from other assets of $0.1 million, offset by an increase from inventories of $4.4 million, and increase from other noncurrent liabilities of $2.6 million, and an increase from contract liabilities of $2.0 million. The non-cash loss of $6.0 million primarily consisted of stock-based compensation expense of $4.3 million, and depreciation and amortization of $1.5 million.
Net cash used in operating activities for the six months ended June 30, 2025 was $13.6 million, consisting primarily of a net loss of $38.3 million, non-cash loss of $22.6 million described below, and an increase in net operating assets of less than $2.1 million. The cash used from net operating assets was comprised of a decrease from accounts receivable of $1.7 million, a decrease from contract liabilities of $3.6 million, a decrease from accounts payable of $0.9 million, a decrease from contract assets of $0.9 million, a decrease from other noncurrent liabilities of $0.6 million, and a decrease from prepaid expense and other noncurrent assets of $0.3 million, and offset by an increase from inventories of $5.7 million, an increase from other assets of $2.0 million, and an increase from accrued expenses and other liabilities of $2.5 million. The non-cash loss of $22.6 million primarily consisted of the loss on cancellation of warrants of $11.4 million, stock-based compensation expense of $5.4 million, the loss on the disposal of fixed assets of $2.8 million, depreciation and amortization of $1.8 million, and the loss on fair value of warrants of $1.0 million.
We expect our cash used in operating activities to decrease, driven by our efforts to stabilize our working capital requirements through our expense reduction efforts and overall enterprise efficiency improvement programs.
Investing Activities
Net cash used by investing activities during the six months ended June 30, 2026 was $4.5 million, consisting of purchases of property and equipment.
Net cash used by investing activities during the six months ended June 30, 2025 was $1.8 million, consisting of purchases of property and equipment.
We expect our capital expenditures to increase in 2026 compared to 2025 as we invest in printer capacity and related facilities for the RPS expansion project. Management's expectations for capital expenditures is in the range of $40 million to $50 million. This capital expenditure plan is subject to obtaining sufficient additional financing and may be adjusted based on our liquidity position and market conditions.
Financing Activities
Net cash used by financing activities during the six months ended June 30, 2026 was $99.5 million, consisting of $57.4 million net proceeds from the ATM Offering, $46.6 million net proceeds from the April 2026 Offering, $3.0 million principal repayment of the Secured Notes, and $1.5 million principal repayment of the equipment loans.
Net cash provided by financing activities during the six months ended June 30, 2025 was $15.0 million, consisting of proceeds of $15.0 million from the issuance of the January Note and the February Note.
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We expect cash provided by financing activities to increase by issuing new equity or incurring new debt to continue operations, subject to our compliance with the covenants in the equipment loan. 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 June 30, 2026 and December 31, 2025, we did not have any off-balance sheet arrangements, other than described below.
Our purchase commitments per our terms and conditions with our suppliers and vendors are cancellable in whole or in part prior to shipment. Non-cancellable purchase commitments (purchase orders) of $31.5 million for parts and assemblies are due upon receipt and will primarily be delivered in 2026. If inventory is shipped, we will accrue a liability under accrued expenses. See Note 13, Commitments and Contingencies, in the notes to the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report for further discussion. We have no other commitment and contingencies, except for the operating leases, which represent total undiscounted future minimum lease payments of $45.0 million as of June 30, 2026. See Note 8, Leases, in the notes to the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report for further discussion.
Recent Accounting Pronouncements
For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our unaudited condensed consolidated interim financial statements, see Note 2, Summary of Significant Accounting Policies, in the notes to the unaudited condensed consolidated interim financial statements in this Quarterly Report.
Implications of Being a Smaller Reporting Company
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 will remain a smaller reporting company and may take advantage of certain scaled disclosures available to smaller reporting companies until the last day of the fiscal year in which (a) the market value of our voting and nonvoting common stock held by non-affiliates equals or exceeds $250 million measured on the last business day of that year’s second fiscal quarter and (b) our annual revenue equals or exceeds $100 million during the most recently completed fiscal year and the market value of our voting and nonvoting common stock held by non-affiliates equals or exceeds $700 million measured on the last business day of that year’s second fiscal quarter.
Critical Accounting Policies and Significant Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). We evaluated the development and selection of our critical accounting policies and estimates and believe that the following involve a higher degree of judgment or complexity and are most significant to reporting our results of operations and financial position and are therefore discussed as critical. The following critical accounting policies reflect the significant estimates and judgments used in the preparation of our unaudited condensed consolidated interim financial statements. Actual results could differ materially from those estimates and assumptions, and those differences could be material to our unaudited condensed consolidated interim financial statements. We re-evaluate our estimates on an ongoing basis. For more information, see Note 2, Summary of Significant Accounting Policies, included in the notes to the unaudited condensed consolidated interim financial statements in this Quarterly Report, and Critical Accounting Policies and Significant Estimates in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. During the six months ended June 30, 2026 there were no significant updates to the Company’s critical accounting policies and estimates, except as described in Note 2, Summary of Significant Accounting Policies, included in the notes to the unaudited condensed consolidated interim financial statements in this Quarterly Report.