Velo3D, Inc. Fair Value Disclosure
Note 4. Fair Value Measurements
The Company’s assets and liabilities that were measured at fair value on a recurring basis were as follows:
|
|
Fair Value Measured as of December 31, 2025 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds (i) |
|
|
37,124 |
|
|
|
— |
|
|
|
— |
|
|
|
37,124 |
|
Total financial assets |
|
$ |
37,124 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
37,124 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock warrant liabilities (2022 Private Warrant) (ii) |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
Common stock warrant liabilities (Placement Agent Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
29 |
|
|
|
29 |
|
Common stock warrant liabilities (BEPO Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
48 |
|
|
|
48 |
|
Common stock warrant liabilities (BEPO Agent Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
30 |
|
|
|
30 |
|
Contingent earnout liabilities |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Total financial liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
110 |
|
|
$ |
110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fair Value Measured as of December 31, 2024 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds (i) |
|
$ |
215 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
215 |
|
Total financial assets |
|
$ |
215 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
215 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock warrant liabilities (2022 Private Warrant) (ii) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
1 |
|
Common stock warrant liabilities (RDO Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
90 |
|
|
|
90 |
|
Common stock warrant liabilities (Placement Agent Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
16 |
|
|
|
16 |
|
Common stock warrant liabilities (2024 Private Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
378 |
|
|
|
378 |
|
Common stock warrant liabilities (BEPO Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
18 |
|
|
|
18 |
|
Common stock warrant liabilities (BEPO Agent Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
Common stock warrant liabilities (July 2024 Private Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
866 |
|
|
|
866 |
|
Common stock warrant liabilities (August Inducement Warrants) (ii) |
|
|
— |
|
|
|
— |
|
|
|
796 |
|
|
|
796 |
|
Contingent earnout liabilities |
|
|
— |
|
|
|
— |
|
|
|
11 |
|
|
|
11 |
|
Total financial liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,178 |
|
|
$ |
2,178 |
|
For more information regarding the Public Warrants, the Private Placement Warrants, the 2022 Private Warrants, the RDO Warrants, the Placement Agent Warrants, the 2024 Private Warrants, the BEPO warrants, the BEPO Agent Warrants, the July 2024 Private Warrants, the August Inducement Warrants, and the Contingent earnout liabilities, see Note 10, Equity Instruments.
The aggregate fair value of the Company’s money market funds approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds as of December 31, 2025 and 2024. Realized gains and losses, net of tax, were not material for any of the periods presented.
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments:
|
|
Private |
|
|
2022 Private |
|
|
Contingent |
|
|
Debt |
|
|
RDO |
|
|
Placement |
|
|
2024 Private Warrants |
|
|
BEPO Warrants |
|
|
BEPO Agent Warrants |
|
|
July 2024 Private Warrants |
|
|
August Inducement Warrants |
|
|||||||||||
|
|
(In Thousands) |
|
|||||||||||||||||||||||||||||||||||||||||
Fair value as of January 1, 2025 |
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
11 |
|
|
$ |
— |
|
|
$ |
90 |
|
|
$ |
16 |
|
|
$ |
2 |
|
|
$ |
378 |
|
|
$ |
18 |
|
|
$ |
866 |
|
|
$ |
796 |
|
Issuance of instruments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Change in fair value |
|
|
— |
|
|
|
1 |
|
|
|
(10 |
) |
|
|
— |
|
|
|
55 |
|
|
|
13 |
|
|
|
(1 |
) |
|
|
218 |
|
|
|
12 |
|
|
|
440 |
|
|
|
402 |
|
Change due to exchange |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(145 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(548 |
) |
|
|
— |
|
|
|
(1,306 |
) |
|
|
(1,198 |
) |
Fair value as of December 31, 2025 |
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29 |
|
|
$ |
— |
|
|
$ |
48 |
|
|
$ |
30 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fair value as of January 1, 2024 |
|
$ |
127 |
|
|
$ |
23 |
|
|
$ |
1,456 |
|
|
$ |
— |
|
|
$ |
10,891 |
|
|
$ |
536 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Issuance of instruments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,321 |
|
|
|
9,020 |
|
|
|
446 |
|
|
|
4,200 |
|
|
|
2,437 |
|
Change in fair value |
|
|
(127 |
) |
|
|
(22 |
) |
|
|
(1,445 |
) |
|
|
— |
|
|
|
(10,801 |
) |
|
|
(520 |
) |
|
|
(6,319 |
) |
|
|
(8,642 |
) |
|
|
(428 |
) |
|
|
(3,334 |
) |
|
|
(1,641 |
) |
Change due to exchange |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Fair value as of December 31, 2024 |
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
11 |
|
|
$ |
— |
|
|
$ |
90 |
|
|
$ |
16 |
|
|
$ |
2 |
|
|
$ |
378 |
|
|
$ |
18 |
|
|
$ |
866 |
|
|
$ |
796 |
|
The fair value of the private placement warrant liability, the 2022 Private Warrant, the contingent earnout liabilities, the debt derivatives, the RDO Warrants, the Placement Agent Warrants, the 2024 Private Warrants, the BEPO Warrants, the BEPO Agent Warrants, the July 2024 Private Warrants, and the August Inducement Warrants are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.
In determining the fair value of the Private Placement Warrant liability, contingent earnout liability, and the 2024 Private Warrants, the Company used the Monte Carlo simulation model using a distribution of potential outcomes on a weekly basis over the applicable periods that assumes optimal exercise of the Company’s redemption option at the earliest possible date (see Note 10, Equity Instruments).
In determining the fair value of the 2022 Private Warrant, RDO Warrants, Placement Agent Warrants, BEPO Warrants, BEPO Agent Warrants, July 2024 Private Warrants and August Inducement Warrants the Company used the Black-Scholes option pricing model to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate and dividend yield (see Note 10, Equity Instruments).
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Apr 3, 2024 | |
| 2022 | Mar 20, 2023 | |
| 2021 | Mar 28, 2022 | |
| 2020 | Mar 30, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.