Velo3D, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Leases

Leases

9 Months Ended

Sep. 30, 2024

Note 8. Leases

The Company leases its office and manufacturing facilities under four non-cancellable operating leases, including options to extend, which expire between 2024 to 2032. The agreements include a provision for renewal at the then prevailing market rate for terms specified in each lease.

As noted above in Note 6, Balance Sheet Components, the manufacturing facility operating lease at Campbell (McGlincy) was terminated during the quarter ended March 31, 2023, and is no longer in use. The Company’s right-of-use assets and lease liabilities related to McGlincy were amortized in full over the life of the lease. Additionally, the Company exited from its two facilities at Campbell (Division) during the quarter ended December 31, 2023, which are no longer in use, however the lease agreements have not been terminated as of September 30, 2024.

Total right-of-use (“ROU”) assets and lease liabilities are as follows:


	September 30,		December 31,
	2024		2023
	(In thousands)
Right-of-use assets:
Net book value (Other assets)	$	8,041	$	10,672
Operating lease liabilities:
Current (Accrued expense and other current liabilities)	$	1,749	$	2,153
Noncurrent (Other noncurrent liabilities)		8,737		9,973
		10,486		12,126
Financing lease liabilities:
Current (Accrued expense and other current liabilities)	$	139	$	113
Noncurrent (Other noncurrent liabilities)		150		203
	$	289	$	316
Total lease liabilities	$	10,775	$	12,442

There were no impairments recorded related to these assets as of September 30, 2024 and December 31, 2023.

Information about lease-related balances were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
	(In thousands, except years and percentages)
Operating lease expense	$	687		$	746		$	2,179		$	2,256
Financing lease expense		42			18			134			36
Short-term lease expense		40			78			148			242
Total lease expense	$	769		$	842		$	2,461		$	2,534
Cash paid for leases	$	691		$	710		$	2,189		$	2,116
Weighted – average remaining lease term – operating leases (years)		7.2			3.4			7.2			3.4
Weighted – average discount rate – operating leases		8.9	%		8.8	%		8.9	%		8.8	%

Maturity of operating lease liabilities as of September 30, 2024 are as follows:


	(In thousands)
Remainder of 2024	$	661
2025		2,390
2026		2,430
2027		2,400
2028		2,490
Thereafter		8,779
Total operating lease payments	$	19,150
Less portion representing imputed interest		(8,664	)
Total operating lease liabilities	$	10,486
Less current portion		1,749
Long-term portion	$	8,737