8-K: Momentus Partners with Velo3D in All-Stock Deal to Revolutionize Space Component Manufacturing

Momentus Inc. enters a five-year master services agreement with Velo3D to leverage advanced 3D printing for faster, lower-cost production of space system components and explore new revenue streams.

Summary

• Momentus Inc. has signed a five-year master services agreement with Velo3D, Inc. to utilize additive manufacturing for space system components.
• Velo3D will provide services to design and produce components and systems for Momentus' spacecraft and customers.
• Momentus will have priority access to the equivalent capacity of two Velo3D Sapphire XC 3D metal printers.
• If Momentus doesn't fully utilize the capacity, Velo3D can use it for other customers, compensating Momentus with 20% of $3 million less service fees in the first year and 50% in subsequent years.
• In exchange for the services, Momentus issued 477,455 shares of Class A common stock and 673,408 shares of non-voting Series A Convertible Preferred Stock to Velo3D.
• Each share of preferred stock is convertible into ten shares of Class A common stock, subject to certain limitations, including Velo3D holding no more than 9.99% of Momentus' outstanding Class A common stock.
• The preferred stock cannot be converted if it would result in Velo3D holding more than 19.9% of Momentus' Class A common stock without stockholder approval.
• Momentus engaged A.G.P./Alliance Global Partners as its financial advisor for this transaction.

Sentiment

Score: 7

Explanation: The document presents a positive outlook for Momentus through its partnership with Velo3D, highlighting potential cost savings and new revenue streams. However, the reliance on stock issuance and the need for stockholder approval introduce some uncertainty.

Positives

• The agreement aims to enable faster and lower-cost production of space system components.
• Momentus expects to optimize spacecraft design, reduce production costs, and enhance component reliability through additive manufacturing.
• The partnership may lead to new revenue streams through the sale of 3D-printed space system components to other companies.
• Momentus will receive compensation if Velo3D uses the printer capacity for other clients.
• Momentus will have first priority to utilize the Equivalent Capacity, and VLD will ensure the Equivalent Capacity is available for use as and when required by Momentus.

Negatives

• Velo3D's ownership of Momentus' common stock is capped at 9.99%, potentially limiting their influence.
• Conversion of preferred stock to common stock is limited to 19.9% without stockholder approval, which may delay full integration.
• The agreement's success depends on Velo3D's ability to consistently provide high-quality services and maintain printer capacity.
• Momentus is reliant on Velo3D to sell a sufficient number of shares of Momentus Common Stock such that the Prepaid Reserve has sufficient funds to make payments required by this Agreement and to cover the Service Fees for the Services requested by Momentus under this Agreement.

Risks

• The success of the partnership depends on the effective integration of Velo3D's technology into Momentus' operations.
• Market acceptance of 3D-printed space components is not guaranteed.
• Regulatory hurdles and quality control issues could delay the production and sale of components.
• Velo3D's ability to sell Momentus' common stock to fund the prepaid reserve is subject to market conditions.
• The agreement could be terminated if either party materially breaches the terms.

Future Outlook

Momentus aims to leverage the partnership with Velo3D to enhance its satellite and space system capabilities, reduce costs, and create new revenue streams through the sale of 3D-printed components.

Management Comments

• Momentus CEO John Rood stated the company is pleased to partner with Velo3D to improve the capabilities of satellites and space systems.
• John Rood also mentioned the excitement about expanding product offerings and creating new revenue streams through sales of 3D-printed space system components.

Industry Context

This agreement reflects a growing trend in the space industry towards utilizing advanced manufacturing techniques like 3D printing to reduce costs, improve performance, and accelerate production cycles. Companies are increasingly looking to additive manufacturing for complex geometries and rapid prototyping.

Comparison to Industry Standards

• SpaceX has been a strategic partner to Velo3D.
• Aerojet Rocketdyne, Lockheed Martin, and Avio also use Velo3D.
• General Motors also uses Velo3D.
• The use of 3D printing for space components is becoming more common, with companies like Relativity Space using it extensively for rocket engines and structures.
• This agreement positions Momentus to potentially compete more effectively with companies that have already integrated additive manufacturing into their processes.

Stakeholder Impact

• Shareholders may benefit from potential cost savings and new revenue streams.
• Employees may see new opportunities in design and manufacturing.
• Customers may benefit from improved component reliability and performance.
• Suppliers may see changes in demand for traditional manufacturing materials.
• Creditors may be affected by the company's financial performance and stock valuation.

Next Steps

• Velo3D will begin providing services to design and produce components for Momentus.
• Momentus will integrate the 3D-printed components into its satellites and space systems.
• Momentus will seek to sell 3D-printed components to other companies in the space industry.
• Momentus may need to obtain stockholder approval for the conversion of preferred stock if it exceeds the 19.9% ownership limit.
• Momentus shall hold an annual or special meeting of stockholders on or prior to the date that is ninety (90) days following the Effective Date for the purpose of obtaining Stockholder Approval.

Key Dates

Keywords

Momentus, Velo3D, additive manufacturing, 3D printing, space components, master services agreement, spacecraft, Orbital Service Vehicles, Series A Convertible Preferred Stock, common stock