Velo3D, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
VELO$5.58+15.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-03.
0001825079-24-000008
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0000950170-25-047760
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 224 previous paragraphs and 225 current paragraphs.
151 unchanged; 46 reworded; 28 added; 24 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
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 printers to accelerate path to production for our customers.
Current report
Recent Debt and Equity Transactions and Change in Majority Ownership
Current report
In December 2023, our Board of Directors commenced a strategic business review process to explore alternatives in order to maximize stockholder value. The potential strategic alternatives explored or evaluated by our Board of Directors included a potential merger, business combination or sale. The Company's strategic review was concluded on December 24, 2024 at the close of the debt for equity exchange transaction described below
Current report
On December 9, 2024, Arrayed Notes Acquisition Corp. ("Arrayed"), a subsidiary of Arrayed Additive, Inc. purchased the Senior Secured Notes due 2026 from High Trail Investments ON LLC and HB SPV I Master Sub LLC, the Note Holders. Furthermore, on December 9, 2024, the Company and the Note Holders entered into a forbearance agreement where the Note Holders forbore from taking any enforcement action as a result of the occurrence and/or continuation of any specified events of default.
Current report
On December 24, 2024, the Company and Arrayed entered into a debt for equity exchange transaction where the Company issued 185,151,333 shares of the Company’s common stock, in exchange for the cancellation of $22.4 million in principal amount of the Company’s Secured Notes plus $0.4 million of accrued interest on the Notes. Arrayed continues to hold $5.0 million in principal amount of the Notes, and as a result of the exchange transaction, became the owner of approximately 95% of the Company’s issued and outstanding common stock. The Company's strategic review was concluded on December 24, 2024, at the close of the debt for equity exchange transaction.
Current report
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 is payable in full on April 7, 2025 in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid. The January Note may be prepaid in whole or in part at any time without penalty or premium and is convertible in the event of default into shares of the Company’s common stock, at a fixed conversion price of $1.56 per share.
Current report
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 is payable in full on the date that is six months from the date such tranche was funded, in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid. The outstanding principal amount of the February Note is 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 $1.00 per share.
Current report
On February 24, 2025, the Company entered into 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 902,247 registered warrants issued in April 2024 and an aggregate of 1,485,714 registered warrants issued in August 2024, and (b) the High Trail Holders agreed to exchange an aggregate of 2,277,117 unregistered warrants issued in April 2024 and July 2024, and an aggregate of 285,715 registered warrants issued in December 2023, for an aggregate of 14,852,379 shares (the “Acquired Shares”) of Company’s common stock, respectively, equating in each case to an exchange ratio of three Acquired Shares for each warrant.
Current report
Reverse Stock Split
Current report
Effective June 13, 2024, we implemented a 1-for-35 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 Secretary of State of the State of Delaware, without any change to par value. 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 Annual Report have been adjusted, as applicable, to give effect to the reverse stock split.
Current report
Loss on debt extinguishment relates to the loss recorded in accordance with the Third Note Amendment in July 2024, offset by the gain recorded in accordance with the Exchange Agreement in December 2024,
Current report
Other revenue was $5.0 million and $0 for the years ended December 31, 2024 and 2023, respectively. The increase in other revenue was attributed to a licensing agreement with SpaceX in September 2024, where SpaceX obtained a non-exclusive license to certain Velo3D patents and technologies for its internal uses only.
Current report
Total cost of revenue for the years ended December 31, 2024 and 2023 was $43.1 million and $103.7 million, respectively, a decrease of $60.6 million, or 58.5%.
Current report
Gross (Loss) and Gross Margin
Current report
We expect research and development costs to increase in 2025 and beyond due to a refreshed technology roadmap to meet our customers' demand in rapidly bring and scale parts in production and to enhance and advance our portfolio of AM solutions.
Current report
The loss on debt extinguishment was $4.9 million and $19.5 million for the years ended December 31, 2024 and 2023, respectively, and was related to the July 2024 Loan Modification in accordance with the warrant issuance, slightly offset by a gain recorded on the December 2024 Exchange Agreement..
Current report
Other income (expense), net was $(3.6) million and $0.5 million for the years ended December 31, 2024 and 2023, respectively.
Current report
On December 9, 2024, Arrayed Notes Acquisition Corp. ("Arrayed"), a subsidiary of Arrayed Additive, Inc. purchased the Senior Secured Notes due 2026 from High Trail Investments ON LLC and HB SPV I Master Sub LLC, the Note Holders. Furthermore, on December 9, 2024, the Company and the Note Holders entered into a forbearance agreement where the Note Holders forbore from taking any enforcement action as a result of the occurrence and/or continuation of any specified events of default.
Current report
On December 24, 2024, the Company and Arrayed entered into a debt for equity exchange transaction where the Company issued 185,151,333 shares of the Company’s common stock, in exchange for the cancellation of $22.4 million in principal amount of the Company’s Secured Notes plus $0.4 million of accrued interest on the Notes. Arrayed continues to hold $5.0 million in principal amount of the Notes, and became the owner of 95% of the Company’s issued and outstanding common stock.
Current report
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 is payable in full on April 7, 2025 in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid. The January Note may be prepaid in whole or in part at any time without penalty or premium and is convertible in the event of default into shares of the Company’s common stock, at a fixed conversion price of $1.56 per share.
Current report
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 is payable in full on the date that is six months from the date such tranche was funded, in the amount of $5,750,000 and if not paid on or prior to such date, will continue to accrue interest at the same rate until paid. The outstanding principal amount of the February Note is convertible 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 Shares at a fixed conversion price of $1.00 per share.
Current report
We expect our cash used in operating activities to increase, driven by investments in our RPS model in anticipation of increased demand for production level components and in R&D to maintain technology leadership. Our continued efforts in increasing operational efficiency, reducing overhead and expense reduction would offset operating cash needs.
Current report
Net cash provided by financing activities during the year ended December 31, 2024 was $1.5 million, consisting of proceeds of $10.7 million from capital raise, net of issuance costs, $1.7 million proceeds from the August Warrant Inducement capital raise, $0.5 million of proceeds from secured notes, net of issuance costs, and $0.3 million of proceeds from issuance of common stock upon exercise of stock options, partially offset by $11.7 million from the repayment of Secured Notes.
Current report
In connection with the BEPO Offering, the Company issued BEPO Warrants to purchase up to an aggregate of 979,592 shares of common stock. The BEPO Warrants are immediately exercisable at an exercise price of $12.25 per share and will expire on the five year anniversary of the date of issuance. In connection with the BEPO Placement Agency Agreement, we also issued BEPO Agent Warrants to purchase up to 48,980 shares of common stock. The BEPO Agent Warrants are exercisable at an exercise price of $13.475 per share and will expire on the five year anniversary of the date of issuance.
Current report
In connection with the Second Note Amendment, on April 1, 2024, the Company also entered into a letter agreement (the “Letter Agreement”) with the Investors pursuant to which the Company issued to the Investors warrants (the “2024 Private Warrants”) to purchase up to an aggregate of 627,117 shares of Common Stock. The 2024 Private Warrants became exercisable 45 days after the original issuance date (the “Initial Exercise Date”), are exercisable at an exercise price of $15.946 per share and will expire on the one year anniversary of the later of (i) the Initial Exercise Date and (ii) the date on which the Resale Registration Statement (as defined in the Letter Agreement) is declared effective by the SEC. The Investors may exercise the 2024 Private Warrants by paying the exercise in cash or by reducing the outstanding principal amount under the Secured Notes by an amount equal to the quotient of (A) the amount of the exercise price divided by (B) 1.20. The 2024 Private Warrants may also be exercised on a cashless basis under certain circumstances.
Current report
In connection with the Third Note Amendment, on July 1, 2024, the Company also entered into a letter agreement with the Investors pursuant to which the Company issued to the Investors warrants (the “July 2024 Private Warrants”) to purchase up to an aggregate of 1,650,000 shares of Common Stock. The July 2024 Private Warrants became exercisable 45 days after the original issuance date, are exercisable at an exercise price of $3.00 per share and will expire on the five year anniversary of the issuance date.
Current report
The Investors may exercise the 2024 Private Warrants by paying the exercise in cash or by reducing the outstanding principal amount under the Secured Notes by an amount equal to the quotient of (A) the amount of the exercise price divided by (B) 1.20. The July 2024 Private Warrants may also be exercised on a cashless basis under certain circumstances.
Current report
On August 12, 2024, the Company entered into a warrant inducement with certain warrant holders. Pursuant to the Inducement Agreement, the holders of the Existing Warrants agreed to reduce the exercise price of their Existing Warrants totaling 742,857, from $19.78 per share to $2.28 per share. Additionally, the Company agreed to issue registered warrants with an exercise price of $2.28 per share to purchase 1,485,714 shares of Common Stock (the “August Inducement Warrants”) and will expire on the five year anniversary of the issuance date. The August Inducement Warrants may also be exercised on a cashless basis under certain circumstances.
Removed paragraphs (24)
Previous report
Recent Trends and Strategic Realignment
Previous report
During the second half of 2023, we experienced delayed shipments and customer order delays, resulting in an overall decrease in system sales and backlog in the fourth quarter of 2023 and, as a result, lower annual revenue growth than expected. As a result, we believe that our historical focus on revenue growth came at the expense of our cash flow and profitability and our commitment to the highest level of customer service.
Previous report
Accordingly, in October 2023, we made a strategic decision to realign our operations to pivot from emphasizing revenue growth to optimizing our free cash flow, maximizing customer success, reducing expenditures, and improving our operational efficiency. Since then, we have been undertaking expense reduction and cash savings initiatives as part of a company-wide restructuring and strategic realignment plan (the “Strategic Realignment”) to help conserve working capital. The expense reduction and cash saving initiatives included an October 2023 reduction in force, as well as ongoing efforts to streamline facilities, manage working capital, reduce capital expenditures, and reduce overall selling, general and administrative expenses. In addition, we also implemented new go-to-market and service strategies to rebuild our bookings and backlog pipeline.
Previous report
Notwithstanding these efforts, due to the continuing impact of customer order delays and based our bookings to date, we expect additional contraction of revenue growth in the first quarter of 2024 and likely thereafter.
Previous report
Recent Debt and Equity Transactions
Previous report
As of September 30, 2023, we did not satisfy the minimum revenue covenant for the quarter ended September 30, 2023 in our then outstanding $70.0 million aggregate principal amount of senior secured convertible notes due 2026 (the “Secured Convertible Notes”). Since September 30, 2023 through March 31, 2024, we had taken the following steps to repay and restructure our indebtedness and raise additional capital:
Previous report
•On November 28, 2023, we (i) made a $15.0 million cash payment, together with accrued and unpaid interest, to the holders of the Secured Convertible Notes to repay $12.5 million of aggregate principal amount thereof, (ii) exchanged the remaining Secured Convertible Notes for (A) $57.5 million aggregate principal amount of senior secured notes due 2026 (the “Secured Notes”) and (B) 10,000,000 shares of common stock, and (iii) made a cash payment of accrued and unpaid interest on the remaining Secured Convertible Notes that were exchanged;
Previous report
•During December 2023, we offered and sold approximately 8,941,494 shares of our common stock for gross proceeds of approximately $5.0 million pursuant to our “at-the-market” offering sales agreement (the “ATM Sales Agreement”) with Needham & Company, LLC (“Needham”), as agent;
Previous report
•On December 29, 2023, we issued 36,000,000 shares of common stock and warrants to purchase 36,000,000 shares of common stock (the “RDO warrants”) for gross proceeds of $18.0 million in a registered direct offering (our “Registered Direct Offering”);
Previous report
•We (i) made a $25.0 million cash payment, together with accrued and unpaid interest, to the holders of the Secured Notes to repay approximately $20.8 million of aggregate principal amount thereof, and (ii) amended certain terms of the Secured Notes; and
Previous report
•We issued warrants to purchase 1,800,000 shares of common stock (the “placement agent warrants”) to the placement agent in our Registered Direct Offering.
Previous report
As of March 31, 2024, we had approximately $11.2 million in accounts receivable and $14.3 million in cash and investments. On April 1, 2024, we made a cash payment of $5.5 million to redeem approximately $4.2 million of aggregate principal amount of the Secured Notes, together with accrued and unpaid interest, we agreed to make a cash payment of $5.5 million on April 15, 2024 to repay approximately $4.6 million of principal of the Secured Notes, together with accrued and unpaid interest, we amended certain other terms of the Secured Notes, and we issued the holders of the Secured Notes warrants to purchase up to an aggregate of 21,949,079 shares of common stock. See Note 18 Subsequent Events in the notes to our audited consolidated financial statements included elsewhere in this Annual Report for additional information.
Previous report
Loss on debt extinguishment relates to the loss recorded in accordance with the termination of our third amended and restated loan and security agreement, as amended (the “Loan Agreement”), originally entered into with Silicon Valley Bank.
Previous report
Total cost of revenue for the years ended December 31, 2023 and 2022 was $103.7 million and $77.9 million, respectively, an increase of $25.8 million, or 33.2%.
Previous report
Gross Profit and Gross Margin
Previous report
Our 2023 gross profit reflects the impact of launch customer price concessions for our Sapphire XC systems shipped during 2023. This pricing reduced our gross margin for the year by approximately 7.7% compared to 2022. We do not expect these launch customer price concessions to impact gross margins in 2024, as have completed the delivery of the Sapphire XC systems under the related launch customer contract.
Previous report
We expect research and development costs to decrease in 2024 due to the maturation of our Sapphire family of systems and reduction in research and development projects due to our Strategic Realignment and to increase in the long term as we continue to invest in enhancing and advancing our portfolio of AM solutions.
Previous report
The change in fair value of the debt derivatives was a gain of $8.5 million for the year ended December 31, 2023, and was related to the non-cash fair value change of the debt derivatives driven by the change in our stock price.
Previous report
The loss on debt extinguishment was $19.5 million for the year ended December 31, 2023, and was related to the termination of the Loan Agreement with Silicon Valley Bank and the cancellation of the Secured Convertible Notes held by High Trail Investments ON LLC and an affiliated institutional investor.
Previous report
Other income (expense), net was $0.5 million and $1.5 million for the years ended December 31, 2023 and 2022, respectively.
Previous report
On November 27, 2023, we entered into a securities exchange agreement (the “Exchange Agreement”) with the holders of our then outstanding Secured Convertible Notes. On November 28, 2023, pursuant to the Exchange Agreement, (i) we made a cash payment to the holders of $15.0 million to repay $12.5 million of aggregate principal amount of the Secured Convertible Notes, together with accrued and unpaid interest, (ii) the remaining Secured Convertible Notes were exchanged for (A) $57.5 million aggregate principal amount of the Secured Notes and (B) 10,000,000 shares of common stock, and (iii) we made a cash payment to the holders of accrued and unpaid interest on the remaining Secured Convertible Notes that were exchanged.
Previous report
On August 10, 2023, we entered into a securities purchase agreement (as amended, the “Securities Purchase Agreement”) with certain affiliated institutional investors pursuant to which we agreed to issue and sell, in a registered public offering by us directly to investors, up to $105 million aggregate principal amount of our Secured Convertible Notes. On August 14, 2023, we issued $70 million aggregate principal amount of the Secured Convertible Notes to the investors for approximately $66 million in net proceeds, and used approximately $22 million of the net proceeds to repay in full indebtedness outstanding under the Loan Agreement with Silicon Valley Bank. In connection with the repayment of the debt, the Loan Agreement was terminated and is no longer available to us.
Previous report
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 cash savings initiatives as part our Strategic Realignment.
Previous report
Net cash provided by financing activities during the year ended December 31, 2022 was $1.3 million, consisting of repayments of $8.1 million for loan refinance, and repayments of $0.9 million for property and equipment loans, partially offset by $6.7 million of proceeds from the loan refinance, $2.4 million proceeds from new equipment loans, and $1.2 million of proceeds from the issuance of common stock upon exercise of stock options.
Reworded paragraphs (46)
Previous wording
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. The discussion should be read in conjunction with our audited consolidated financial statements included elsewhere in this Annual Report. The fiscal 2022 amounts have been revised to reflect certain immaterial revisions described in Note 1, Description of Business and Basis of Presentation, in the notes to our audited consolidated financial statements. In addition, the fiscal 2023 amounts have been updated from those preliminarily reported in our earnings release, dated March 26, 2024, as a result of the immaterial revisions to both the three-months ended and fiscal year ended December 31, 2023, as described in Note 17, Quarterly Financial Information (Unaudited) in the notes to our audited consolidated financial statements. 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 “Special Note Regarding Forward-Looking Statements.”
Current wording
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. The discussion should be read in conjunction with our audited consolidated financial statements included elsewhere in this Annual 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 “Special Note Regarding Forward-Looking Statements.”
Previous wording
Our operating results for the foreseeable future will continue to depend on sales to a small group of customers. For the years ended December 31, 2023 and 2022, sales to the top three customers accounted for 24.5% and 48.5% of our revenue, respectively. Of the top three customers for the year ended December 31, 2023, all three customers were different from the top three customers for the comparable period in 2022.
Current wording
Our operating results for the foreseeable future will continue to depend on sales to a small group of customers. For the years ended December 31, 2024 and 2023, sales to the top three customers accounted for 47.0% and 24.5% of our revenue, respectively. Of the top three customers for the year ended December 31, 2024, all three customers were different from the top three customers for the comparable period in 2023.
Previous wording
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 Israel and in Ukraine and the economic sanctions related thereto), have added uncertainty in timing of customer orders and supply chain constraints. In 2022, supply chain challenges increased our material and shipping costs, resulted in shipping delays and impacted our gross margins. In 2023, we implemented a number of supply chain and manufacturing improvements in response and intend to continue to focus on driving further operational improvements during 2024 as well as our Strategic Realignment to reduce operating costs.
Current wording
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 Israel and in Ukraine and the economic sanctions related thereto), have added uncertainty in timing of customer orders and supply chain constraints. In 2024, we implemented a number of supply chain and manufacturing improvements in response and intend to continue to focus on driving further operational improvements during 2025 to reduce operating costs.
Previous wording
including the SEC's recently adopted climate disclosure rules, 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.
Current wording
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.
Previous wording
3D Printer sale transactions -fall into two categories: a structured fixed purchase price for the system or a sale and utilization (variable consideration) fee model. In the sale and utilization fee model, customers pay an upfront amount that is less than the full purchase price to purchase the system. This purchase price is supplemented by an hourly usage fee for each hour of system utilization over the life of the system. The variable payments are recognized when the event determining the amount of variable consideration to be paid occurs. Sales with variable consideration represented 3% of revenue during the year ended December 31, 2023 and 6% of our revenue during year ended December 31, 2022. For more information, see “—Critical Accounting Policies and Significant Estimates—Revenue – Variable Consideration” below.
Current wording
3D Printer sale transactions -fall into two categories: a structured fixed purchase price for the system or a sale and utilization (variable consideration) fee model. In the sale and utilization fee model, customers pay an upfront amount that is less than the full purchase price to purchase the system. This purchase price is supplemented by an hourly usage fee for each hour of system utilization over the life of the system. The variable payments are recognized when the event determining the amount of variable consideration to be paid occurs. Sales with variable consideration represented 0% of revenue during the year ended December 31, 2024 and 3% of our revenue during year ended December 31, 2023. Starting in 2023, we have phased out the sale and utilization fee model. For more information, see “—Critical Accounting Policies and Significant Estimates—Revenue – Variable Consideration” below.
Previous wording
The timeframe from order to completion of the site acceptance test occurs normally over three to six 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.
Current wording
The timeframe from order to completion of the site acceptance test occurs normally 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.
Previous wording
The Recurring Payment transactions, which are structured as operating leases, were 2.2% and 5.3% of revenue for the years ended December 31, 2023 and 2022, respectively. 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.
Current wording
The Recurring Payment transactions, which are structured as operating leases, were 2.6% and 2.2% of revenue for the years ended December 31, 2024 and 2023, respectively. 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.
Previous wording
Other revenue included under 3D Printer 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. Other revenue was not material for the years ended December 31, 2023 and 2022.
Current wording
Other revenue included under 3D Printer 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.
Previous wording
Total revenue for the years ended December 31, 2023 and 2022 was $77.4 million and $78.7 million respectively. Total revenue for the year ended December 31, 2023 decreased by $1.3 million, or 1.6% from the year ended December 31, 2022.
Current wording
Total revenue for the years ended December 31, 2024 and 2023 was $41.0 million and $77.4 million, respectively. Total revenue for the year ended December 31, 2024 decreased by $36.4 million, or 47.1%, from the year ended December 31, 2023.
Previous wording
3D Printer sales were $68.9 million and $69.3 million for the years ended December 31, 2023 and 2022, respectively, which was primarily attributed to an overall decrease in system sales and backlog in the fourth quarter of 2023, offset in part by sales of the higher priced Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ systems throughout the first three quarters of 2023. The negative revenue performance was due to lower systems sold, mix of lower production volumes and discounted system pricing offset by our change in product mix to include more higher priced systems as discussed previously, resulting in a decrease in the average selling price. The 3D Printer sales also included parts and consumables revenue.
Current wording
3D Printer sales were $25.4 million and $68.9 million for the years ended December 31, 2024 and 2023, respectively, which was primarily attributed to an overall decrease in system sales and backlog in the fourth quarter of 2023, offset in part by sales of the higher priced Sapphire 1MZ, Sapphire XC and Sapphire XC 1MZ systems throughout the first three quarters of 2023. The negative revenue performance was due to lower systems sold, mix of lower production volumes and discounted system pricing offset by our change in product mix to include more higher priced systems as discussed previously, resulting in a decrease in the average selling price. The 3D Printer sales also included parts and consumables revenue.
Previous wording
Recurring Payment, structured as an operating lease, was $1.7 million and $4.2 million for the years ended December 31, 2023 and 2022, respectively. The decrease was primarily attributed to a decrease in the number of 3D Printer systems in service generating Recurring Payment revenue for the year ended December 31, 2023 compared to the year ended December 31, 2022. Additionally, three Recurring Payment revenue systems were converted to 3D Printer sales during 2023.
Current wording
Recurring Payment, structured as an operating lease, was $1.1 million and $1.7 million for the years ended December 31, 2024 and 2023, respectively. The decrease was primarily attributed to a decrease in the number of 3D Printer systems in lease generating Recurring Payment revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Previous wording
Our Support Service revenue was $6.8 million and $5.3 million for the years ended December 31, 2023 and 2022, respectively. The increase was primarily attributed to an increase in the number of 3D Printer systems in service as of December 31, 2023 compared to the number of 3D Printers in service as of December 31, 2022.
Current wording
Our Support Service revenue was $9.6 million and $6.8 million for the years ended December 31, 2024 and 2023, respectively. The increase was primarily attributed to services rendered to SpaceX in relation to the licensing agreement and to an increase in the number of 3D Printer systems in service as of December 31, 2024, compared to the number of 3D Printers in service as of December 31, 2023.
Previous wording
As part of our Strategic Realignment, 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 remain flat or decrease as we continue to shift our focus to 3D Printer system sales. We expect our Support Service revenue to increase as the number of systems we have in the field increases. As of December 31, 2023, our backlog for firm orders was $13 million for 3D Printers. Our focus for revenue has shifted to ensuring customer success and improving system reliability to strengthen our existing customer network and developing new customer networks to increase demand.
Current wording
As part of our Strategic Realignment, 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 remain flat or decrease as we continue to shift our focus to 3D Printer system sales. We expect our Support Service revenue to increase as the number of systems we have in the field increases. As of December 31, 2024, our backlog for firm orders was $16 million for 3D Printers. Our focus for revenue has shifted to ensuring customer success and improving system reliability to strengthen our existing customer network and developing new customer networks to increase demand.
Previous wording
Cost of 3D Printers was $94.4 million and $68.3 million, for the years ended December 31, 2023 and 2022, respectively. The increase of $26.2 million was due a $27 million increase in Cost of 3D printers related to the valuation of inventory for the year ended December 31, 2023, offset by a decrease in the number of 3D Printers sold, which included both Sapphire and Sapphire XC systems, compared to the number of 3D Printers sold for the year ended December 31, 2022. For the year ended December 31, 2023, cost of 3D Printers increased compared to the prior year in 2022, due to a significant increase in scrapped inventory and inventory reserves for excess and obsolete inventory related to changes in our business strategy due to our Strategic Realignment and the change in our product mix towards more Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems compared to Sapphire systems, offset by lower material, labor and factory overhead costs associated with lower production volumes.
Current wording
Cost of 3D Printers was $34.2 million and $94.4 million, for the years ended December 31, 2024 and 2023, respectively. The decrease of $60.3 million was primarily due to a decrease in the number of 3D Printers sold, which included both Sapphire and Sapphire XC systems, compared to the number of 3D Printers sold for the year ended December 31, 2023.
Previous wording
Cost of Recurring Payment was $1.3 million and $2.6 million for the years ended December 31, 2023 and 2022, respectively. This decrease of $1.3 million was due to a decrease in depreciation of the equipment on lease and allocable Cost of Support Services as a result of less 3D Printers in service in 2023 compared to 2022. Additionally, as discussed previously, three Recurring Payment revenue systems were converted to 3D Printer sales during 2023.
Current wording
Cost of Recurring Payment was $0.9 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively. This decrease of $0.4 million was due to a decrease in depreciation of the equipment on lease and allocable Cost of Support Services as a result of less 3D Printers in service in 2024 compared to 2023.
Previous wording
Cost of Support Services was $8.0 million and $7.0 million, for the years ended December 31, 2023 and 2022, respectively. This increase of $1.0 million was primarily attributable to the costs for preventative maintenance, costs incurred to enhance system reliability performance, and field service engineering labor costs due to more 3D Printers in service in 2023 compared to 2022.
Current wording
Cost of Support Services was $8.1 million and $8.0 million, for the years ended December 31, 2024 and 2023, respectively. This increase of $0.1 million was primarily attributable to the costs for preventative maintenance, costs incurred to enhance system reliability performance, and field service engineering labor costs due to more 3D Printers in service in 2024 compared to 2023.
Previous wording
Cost of revenue as a percentage of revenue was 133.9% and 98.9% for the years ended December 31, 2023 and 2022, respectively. The increase in the cost of revenue as a percentage was primarily due to the change in our product mix towards less Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems compared to Sapphire systems, and the impact of launch customer pricing for Sapphire XC. Additionally, the increase was also driven by the large increase in scrapped inventory and inventory reserves for excess and obsolete inventory related to changes in our business strategy due to our Strategic Realignment.
Current wording
Cost of revenue as a percentage of revenue was 105.1% and 133.9% for the years ended December 31, 2024 and 2023, respectively. The decrease in the cost of revenue as a percentage was primarily due to the change in our product mix towards more Sapphire XC, and Sapphire XC 1MZ systems compared to Sapphire systems. Additionally, the decrease was also driven by changes in our business strategy due to our Strategic Realignment to improve efficiency and reduce overhead.
Previous wording
Total gross profit was $(26.3) million and $0.8 million for the years ended December 31, 2023 and 2022, respectively. As a percentage of revenue, the gross margin was (33.9)% and 1.1% for the years ended December 31, 2023 and 2022, respectively. The lower gross profit for the year ended December 31, 2023 was primarily attributable to the change in the mix of Sapphire and Sapphire XC system sales, the impact of launch customer pricing for Sapphire XC, and the higher than expected costs associated with the production of the Sapphire XC, Sapphire 1MZ and Sapphire XC 1MZ systems, the higher material, labor and overhead costs for the increased number of systems sold in 2023, as compared to 2022, and the large increase in scrapped inventory and inventory reserves for excess and obsolete inventory related to changes in our business strategy due to our Strategic Realignment.
Current wording
Total gross loss was $(2.1) million and $(26.3) million for the years ended December 31, 2024 and 2023, respectively. As a percentage of revenue, the gross margin was (5.1)% and (33.9)% for the years ended December 31, 2024 and 2023, respectively. The higher gross loss for the year ended December 31, 2024 was primarily attributable to the change in the mix of Sapphire and Sapphire XC system sales, the operational and overhead improvement as a result of the Strategic Realignment offset by a decreased number of systems sold in 2024, as compared to 2023.
Previous wording
We expect to accelerate production cycle times and improving efficiencies on the production floor to lower our cost of revenue, which we expect will improve our gross profit and gross margins in the second half of 2024.
Current wording
We expect to accelerate production cycle times and further improving efficiencies on the production floor to lower our cost of revenue, which we expect will improve our gross profit and gross margins in the second half of 2025.
Previous wording
Research and development expenses were $42.0 million and $46.3 million for the years ended December 31, 2023 and 2022, respectively. In the year ended December 31, 2023, there was a decrease of $4.3 million in research and development expenses primarily due to the completion of the development of the Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems in 2022 and reduction of new research and development projects in 2023 due to our Strategic Realignment.
Current wording
Research and development expenses were $17.1 million and $42.0 million for the years ended December 31, 2024 and 2023, respectively. In the year ended December 31, 2024, there was a decrease of $24.9 million in research and development expenses primarily due to the completion of the development of the Sapphire 1MZ, Sapphire XC, and Sapphire XC 1MZ systems in 2023 and reduction of new research and development projects in 2024 due to our Strategic Realignment.
Previous wording
The decrease in research and development expenses in 2023 were related to a $0.7 million decrease for headcount, salaries and employee-related expenses, a $3.4 million decrease in product development expenses for the Sapphire family of systems, and a $1.8 million decrease in components design and engineering testing and validation for the Sapphire XC and development expenses for the product development of the 1MZ larger build volumes for our Sapphire systems, offset by a $1.6 million increase in stock-based compensation.
Current wording
The decrease in research and development expenses in 2024 were related to a $8.2 million decrease for headcount, salaries and employee-related expenses, a $7.1 million decrease in stock-based compensation, a $5.0 million decrease in product development expenses for the Sapphire family of systems, and a $1.3 million decrease in components design and engineering testing and validation for the Sapphire XC and development expenses for the product development of the 1MZ larger build volumes for our Sapphire systems, a $1.2 million decrease in professional fees and a $2.1 million decrease in other miscellaneous expenses.
Previous wording
Selling and marketing expenses were $23.2 million and $23.9 million for the years ended December 31, 2023 and 2022, respectively. There was a decrease of $0.7 million for the year ended December 31, 2023 as compared to 2022.
Current wording
Selling and marketing expenses were $13.8 million and $23.2 million for the years ended December 31, 2024 and 2023, respectively. There was a decrease of $9.4 million for the year ended December 31, 2024 as compared to 2023.
Previous wording
The decrease in selling and marketing expenses for the year ended December 31, 2023 was attributable to a $0.1 million decrease in trade show expenses, marketing initiatives, and branding expenses and a $3.3 million decrease in European marketing costs, offset by a $1.6 million increase for additional headcount, salaries and employee-related expenses and a $1.1 million increase in stock-based compensation.
Current wording
The decrease in selling and marketing expenses for the year ended December 31, 2024 was attributable to a $2.1 million decrease in trade show expenses, marketing initiatives, and branding expenses, a $1.4 million decrease in travel, a $3.2 million decrease for headcount, salaries and employee-related expenses and a $3.0 million decrease in stock-based compensation. offset by a $0.3 increase in miscellaneous expenses.
Previous wording
We expect selling and marketing expenses to continue to decrease during 2024 as we continue to implement our realignment strategy. During 2024, we intend to continue our focus on certain markets that show strong attendance at additive manufacturing conferences to build product awareness.
Current wording
We expect selling and marketing expenses to continue to increase during 2025 as we re-ignite sales and marketing efforts such as participating in certain markets that show strong attendance at additive manufacturing conferences to build product awareness.
Previous wording
General and administrative expenses were $41.7 million and $37.0 million for the years ended December 31, 2023 and 2022, respectively. The increase of $4.7 million in the year ended December 31, 2023 in general and administrative expenses as compared to 2022 was attributable to, a $2.8 million increase in additional headcount, salaries and employee-related benefits, a $1.8 million increase in public company related expenses for advisory, legal and accounting fees and insurance, and a $0.1 million increase in facilities expenses.
Current wording
General and administrative expenses were $49.3 million and $41.7 million for the years ended December 31, 2024 and 2023, respectively. The increase of $7.6 million in the year ended December 31, 2024 in general and administrative expenses as compared to 2023 was attributable to a $13.2 million increase in bad debt expense and a $4.4 million increase in public company related expenses for advisory, legal and accounting fees and insurance, offset by a $5.3 million decrease in headcount, salaries and employee-related benefits, a $0.5 million decrease in travel expenses, a $0.3 million decrease in depreciation, a $3.6 million decrease in facilities expenses and a $0.3 million decrease in miscellaneous expenses.
Previous wording
We expect general and administrative expenses to decrease as a result of one-time charges incurred in 2023 related to personnel and other charges of $1.2 million from our reduction in force and charges to consolidate our facilities of approximately $2.5 million. We continue to focus on our company-wide initiatives to reduce operating costs for 2024 as we continue to implement our Strategic Realignment by reducing our general and administrative expenses through reducing our reliance on outside consultants, managing facility costs and negotiating with vendors for improved pricing.
Current wording
We expected general and administrative expenses to increase as a result of one-time charges incurred in 2024 related to bad debt of $13.2 million, which would offset a decrease from our reduction in force, and facilities expenses. We continue to focus on our company-wide initiatives to reduce operating costs for 2025 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.
Previous wording
Interest expense was $9.7 million and $0.4 million, for the years ended December 31, 2023 and 2022, respectively. In the year ended December 31, 2023, there was an increase of $9.3 million attributable to increases in outstanding debt balances, attributable to the Notes.
Current wording
Interest expense was $16.0 million and $9.7 million, for the years ended December 31, 2024 and 2023, respectively. In the year ended December 31, 2024, there was an increase of $6.3 million attributable to increases in outstanding debt balances, attributable to the Notes.
Previous wording
We expect our interest expense will continue to increase as a result of the Secured Notes (for further information, see “—Liquidity and Capital Resources” and Note 9, Long-Term Debt, in the notes to the audited consolidated financial statements included elsewhere in this Annual Report).
Current wording
We expect our interest expense will decrease as a result of reduced debt (for further information, see “—Liquidity and Capital Resources” and Note 9, Long-Term Debt, in the notes to the audited consolidated financial statements included elsewhere in this Annual Report).
Previous wording
The change in fair value of warrants resulted in a gain of $2.3 million, and $19.1 million for the years ended December 31, 2023 and 2022, respectively, and were related to the non-cash fair value change of the warrant liabilities.
Current wording
The change in fair value of warrants resulted in a gain of $32.1 million, and $2.3 million for the years ended December 31, 2024 and 2023, respectively, and were related to the non-cash fair value change of the warrant liabilities.
Previous wording
The change in fair value of the contingent earnout liability was a gain of $16.0 million and $94.1 million for the year ended December 31, 2023 and 2022, respectively, and were related to the non-cash fair value change of the contingent earnout liabilities.
Current wording
The change in fair value of the contingent earnout liability was a gain of $1.4 million and $16.0 million for the year ended December 31, 2024 and 2023, respectively, and were related to the non-cash fair value change of the contingent earnout liabilities.
Previous wording
As of December 31, 2023, we have raised net proceeds of $517.1 million, comprised of approximately $18 million from the Registered Direct Offering, which closed on December 28, 2023, approximately $66 million from the offering of $70.0 million aggregate principal amount of the Secured Convertible Notes, which closed on August 10, 2023, $22.8 million from our "at-the-market" offering (the "ATM Offering") (as described below), $278.3 million from the Merger and related private placement of shares of our common stock (the “PIPE Financing”), which closed on September 29, 2021, and, prior to the Merger, $150.0 million from the issuance of redeemable convertible preferred stock (series A to series D), third-party financing and convertible notes. We have incurred a net loss of $135.1 million and net income of $8.0 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, we had $31.1 million and $80.2 million in cash, cash equivalents and short-term investments, respectively, and an accumulated deficit of $357.0 million and $221.9 million, respectively. Our business requires substantial amounts of cash for operating activities, including salaries and wages paid to our employees, component and sub-assembly purchases, general and administrative expenses, and others.
Current wording
As of December 31, 2024 and 2023, we had $1.2 million and $31.1 million in cash, cash equivalents and short-term investments, respectively, and an accumulated deficit of $430.3 million and $357.0 million, respectively. Our business requires substantial amounts of cash for operating activities, including salaries and wages paid to our employees, component and sub-assembly purchases, general and administrative expenses, and others.
Previous wording
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 $13.0 million for parts and assemblies are due upon receipt and will primarily be delivered in the first half of 2024. If inventory is shipped, we will accrue a liability under accrued expenses. We have no other commitment and contingencies, except for the operating leases. See Note 8, Leases, in the notes to the audited consolidated financial statements included elsewhere in this Annual Report for further discussion.
Current wording
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 $3.2 million for parts and assemblies are due upon receipt and will primarily be delivered in 2025. If inventory is shipped, we will accrue a liability under accrued expenses. We have no other commitment and contingencies, except for the operating leases. See Note 8, Leases, in the notes to the audited consolidated financial statements included elsewhere in this Annual Report for further discussion.
Previous wording
During the year ended December 31, 2023, we experienced less revenue growth than expected due to the impact of delayed shipments and customer order delays, resulting in an overall decrease in system sales and backlog in the fourth quarter of 2023. Further, due to the continuing impact of customer order delays and based our bookings to date, we expect additional contraction of revenue growth in the first quarter of 2024 and likely thereafter. Additionally, we do not have sufficient working capital to meet our financial needs for the twelve-month period following the filing date of this Annual Report. As such, we believe that there is substantial doubt about our ability to continue as a going concern for the twelve-month period following the filing date of this Annual Report. See Note 1 Description of Business and Basis of Presentation—Going Concern, Financial Condition and Liquidity and Capital Resources in the notes to the audited consolidated financial statements included elsewhere in this Annual Report.
Current wording
During the year ended December 31, 2024, we experienced less revenue than expected due to the impact of delayed shipments and customer order delays, resulting in an overall decrease in system sales. While we expect system sales to improve and revenue from parts printing to increase in 2025, we do not have sufficient working capital to meet our financial needs for the twelve-month period following the filing date of this Annual Report. As such, we believe that there is substantial doubt about our ability to continue as a going concern for the twelve-month period following the filing date of this Annual Report. See Note 1 Description of Business and Basis of Presentation—Going Concern, Financial Condition and Liquidity and Capital Resources in the notes to the audited consolidated financial statements included elsewhere in this Annual Report.
Previous wording
We expect that we will need to engage in additional financings to fund our operations and satisfy our obligations in the near-term as well as to respond to business challenges and opportunities, including the need to repay the Secured Notes, provide working capital, develop new features or enhance our products, expand our manufacturing capacity, improve our operating infrastructure, or acquire complementary businesses and technologies. Accordingly, subject to our compliance with the covenants in the Secured Notes, we expect we will need to engage in equity or debt financings to secure additional funds, including seeking additional capital from public or private offerings of our equity or debt securities, electing to repay, restructure or refinance our existing indebtedness, or electing to borrow additional amounts under new credit lines or from other sources. We may also seek to raise additional capital, including from offerings of our equity or debt securities, on an opportunistic basis when we believe there are suitable opportunities for doing so. For example, on November 14, 2022, we filed with the SEC a shelf registration statement (the “Shelf Registration Statement”) that was subsequently declared effective on November 21, 2022, and permits us to sell from time-to-time additional shares of our common stock or other securities in one or more offerings in amounts, at prices and on the terms that we will determine at the time of offering for aggregate gross sale proceeds of up to $300.0 million, of which we may offer and sell up to $75.0 million shares of our common stock from time to time pursuant to the ATM Sales Agreement, subject to the terms and conditions described in the ATM Sales Agreement and SEC rules and regulations. For more information, see Note 16,"At-the-Market Offering", in the notes to the audited consolidated financial statements included elsewhere in this Annual Report. Without such additional funding, we will not be able to continue operations.
Current wording
We expect that we will need to engage in additional financings to fund our operations and satisfy our obligations in the near-term as well as to respond to business challenges and opportunities, including the need to repay the Secured Convertible Notes, provide working capital, develop new features or enhance our products, expand our manufacturing capacity, improve our operating infrastructure, or acquire complementary businesses and technologies. We may also seek to raise additional capital, including from offerings of our equity or debt securities, on an opportunistic basis when we believe there are suitable opportunities for doing so. Without such additional funding, we will not be able to continue operations.
Previous wording
As described above, we are undertaking expense reduction and cash savings initiatives as part of a company-wide restructuring and strategic realignment plan to help conserve working capital. The expense reduction and cash saving initiatives include streamlining facilities, managing working capital, reducing capital expenditures, and reducing overall selling, general and administrative expenses.
Current wording
We continue to undertake expense reduction and cash savings initiatives as part of an on-going company-wide initiative to help conserve working capital. The expense reduction and cash saving initiatives include streamlining facilities, managing working capital, and reducing overall general and administrative expenses.
Previous wording
As of December 31, 2023, our debt arrangements comprised the Secured Notes, of which we had approximately $36.7 million aggregate principal amount outstanding as of December 31, 2023.
Current wording
As of December 31, 2024, our debt arrangements comprised the Secured Notes, of which we had approximately $5.0 million aggregate principal amount outstanding as of December 31, 2024.
Previous wording
Net cash used in operating activities for the year ended December 31, 2022 was $124.0 million, consisting primarily of a net income of $10.0 million, cash used from net operating assets of $46.6 million, and non cash charges of $87.4 million. The cash used from operating assets was primarily comprised of increases in inventories of $47.0 million for Sapphire and Sapphire XC system production, contract liabilities of $7.1 million, contract assets of $6.5 million, and an increase from other net operating assets of $4.0 million, partially offset by accrued expenses and other current liabilities of $6.4 million, prepaid expenses and other current assets of $6.1 million related to insurance and vendor prepayments, accounts receivable of $3.2 million due to timing of customer payments, and accounts payable of $2.3 million. The noncash charges primarily consisted of the change in fair value related to the warrants of $19.1 million, the change in fair value related to the contingent earnout liabilities of $94.1 million, partially offset by depreciation and amortization, stock-based compensation expense, and bad debt provision expense.
Current wording
Net cash used in operating activities for the year ended December 31, 2024 was $32.7 million, consisting primarily of a net loss of $73.3 million, cash used from net operating assets of $31.5 million, and non cash charges of $9.1 million. The cash used from operating assets was primarily comprised of accounts payable of $0.1 million, accrued expenses and other current liabilities of $2.6 million, and other noncurrent liabilities of $2.2 million, partially offset by a decrease in inventories of $13.3 million for Sapphire and Sapphire XC system production, contract assets of $7.0 million, accounts receivable of $5.9 million, contract liabilities of $5.2 million, other assets of $4.0 million, and prepaid expenses and other current assets of $1.8 million related to insurance and vendor prepayments. The noncash charges primarily consisted of amortization of debt discount and deferred financing costs of $13.6 million, stock-based compensation of $15.4 million, loss on debt extinguishment of $7.5 million, depreciation and amortization of $4.9 million, warrant issuance in connection with the August warrant inducement of $2.4 million, and cost of issuance of common stock warrants on BEPO Offering of $1.3 million, partially offset by the fair value related to the warrants of $32.1 million, gain on exchange of debt for common stock of $2.6 million and the change in fair value related to the contingent earnout liabilities of $1.4 million.
Previous wording
Net cash used in operating activities for the year ended December 31, 2023 was $105.6 million, consisting primarily of a net loss of $135.1 million, cash used from net operating assets of $1.2 million, and non cash charges of $28.3 million. The cash used from operating assets was primarily comprised of contract liabilities of $10.1 million, accrued expenses and other current liabilities of $9.0 million, and contract assets of $7.2 million, partially offset by a decrease in inventories of $13.7 million for Sapphire and Sapphire XC system production, other assets of $10.2 million, prepaid expenses and other current assets of $2.8 million related to insurance and vendor prepayments, and accounts payable of $2.2 million. The noncash charges primarily consisted of stock-based compensation of $24.9 million, the change in loss on debt extinguishment of $19.5 million, depreciation and amortization of $9.3 million, cost of issuance of common stock warrants of $1.4 million, and realized loss on available for sale securities, partially offset by the change in fair value related to the contingent earnout liabilities of $16.0 million, the change in fair value of debt derivatives of $8.5 million, and fair value related to the warrants of $2.3 million.
Current wording
Net cash used in operating activities for the year ended December 31, 2023 was $105.6 million, consisting primarily of a net loss of $135.1 million, cash used from net operating assets of $1.2 million, and noncash charges of $28.3 million. The cash used from operating assets was primarily comprised of contract liabilities of $10.1 million, accrued expenses and other current liabilities of $9.0 million, and contract assets of $7.2 million, partially offset by a decrease in inventories of $13.7 million for Sapphire and Sapphire XC system production, other assets of $10.2 million, prepaid expenses and other current assets of $2.8 million related to insurance and vendor prepayments, and accounts payable of $2.2 million. The noncash charges primarily consisted of stock-based compensation of $24.9 million, the change in loss on debt extinguishment of $19.5 million, depreciation and amortization of $9.3 million, cost of issuance of common stock warrants of $1.4 million, and realized loss on available for sale securities, partially offset by the change in fair value related to the contingent earnout liabilities of $16.0 million, the change in fair value of debt derivatives of $8.5 million, and fair value related to the warrants of $2.3 million.
Previous wording
Net cash used in investing activities during the year ended December 31, 2022 was $53.0 million, consisting of property and equipment purchases of $13.8 million, production of equipment for the equipment on lease to customers of $5.6 million and purchases of available-for-sale investments of $87.7 million consisting primarily of high quality investment-grade securities, offset by $54.1 million of proceeds from maturity of available for sale investments.
Current wording
Net cash provided by investing activities during the year ended December 31, 2024 was $7.8 million, consisting of $3.5 million of proceeds from maturity of available for sale investments and $3.2 million in sales of available for sale securities, and reimbursement of previously incurred leasehold expenditures of $1.1 million.
Previous wording
We expect our capital expenditures to decrease in 2024 compared to 2023 as we intend to limit the number of 3D Printer systems as equipment for lease to customers and because we completed the construction of our manufacturing facility in 2022.
Current wording
We expect our capital expenditures to increase in 2025 compared to 2024 as we ramp up operations to meet our customers' production level parts demand while being offset by our intent to limit the number of 3D Printer systems as equipment for lease to customers.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
We expect that we will need to engage in additional financings to fund our operations and satisfy our obligations in the near-term. Without such additional funding, we will not be able to continue operations.
Previous report — wording carried elsewhere
Material pending or existing climate change-related legislation, regulations, and international accords,
Previous report — wording carried elsewhere
Gain on Fair value of Debt Derivatives