8-K: Velo3D Licenses Additive Manufacturing Tech to SpaceX for $8 Million, Secures Noteholder Consent

Velo3D has entered into an agreement with SpaceX, licensing its additive manufacturing technology for $5 million and securing an additional $3 million for support services, while also obtaining consent from noteholders to proceed with the deal.

Summary

• Velo3D has signed an Intellectual Property License and Support Services Agreement with Space Exploration Technologies Corp. (SpaceX).
• SpaceX will pay Velo3D a total of $8 million, with $5 million for the license and $3 million for support services.
• The $5 million license fee will be paid in two tranches of $2.5 million each, triggered by the initiation and completion of technology delivery.
• The $3 million for support services will be invoiced in arrears based on actual services provided.
• Velo3D has also secured a Limited Consent from its note holders, who hold $28,416,667 in notes.
• The note holders have agreed to the deal on the condition that 50% of the fees received from SpaceX will be used to redeem outstanding principal and accrued interest on the notes.

Sentiment

Score: 7

Explanation: The deal with SpaceX is a positive development for Velo3D, providing a significant revenue stream and validation of its technology. However, the requirement to use 50% of the proceeds for debt repayment and the non-exclusive nature of the license temper the overall positive sentiment.

Positives

• Velo3D secures a significant $8 million deal with SpaceX.
• The agreement provides immediate cash flow with the license fee payments.
• The deal validates Velo3D's technology in the aerospace sector.
• The agreement includes ongoing revenue from support services.
• The noteholder consent allows Velo3D to proceed with the agreement.
• The agreement includes a perpetual license for SpaceX.

Negatives

• Velo3D is required to use 50% of the proceeds to pay down debt.
• The license is non-exclusive, meaning Velo3D can license the technology to other companies.
• The agreement includes a clause that allows SpaceX to withhold payment if Velo3D breaches the agreement.
• The agreement includes a clause that allows Velo3D to terminate the agreement if SpaceX breaches the agreement.

Risks

• There is a risk that SpaceX may not fully utilize the licensed technology.
• Velo3D is obligated to provide ongoing support services, which could strain resources.
• The agreement could be terminated if either party breaches the terms.
• There is a risk that the 50% debt repayment requirement could limit Velo3D's financial flexibility.
• The agreement is subject to international trade controls.

Future Outlook

Velo3D will receive $8 million from SpaceX, with 50% of the proceeds being used to pay down debt. The agreement is expected to provide ongoing revenue from support services. The license is perpetual for SpaceX.

Management Comments

• The document does not contain any direct quotes from management, but the agreement is signed by Bradley Kreger, Chief Executive Officer.

Industry Context

This agreement highlights the growing demand for additive manufacturing technologies in the aerospace industry. SpaceX's adoption of Velo3D's technology indicates a trend towards in-house manufacturing capabilities for specialized components. This deal could position Velo3D as a key player in the aerospace additive manufacturing market.

Comparison to Industry Standards

• The licensing agreement with SpaceX is a significant deal for Velo3D, especially considering the company's size and current financial situation.
• Comparable companies in the additive manufacturing space, such as Desktop Metal and 3D Systems, often engage in similar licensing agreements, but the specific terms and values vary widely based on the technology and the client.
• The $8 million deal is substantial for a company of Velo3D's size, and the requirement to use 50% of the proceeds to pay down debt is a common practice for companies with significant debt obligations.
• The perpetual license granted to SpaceX is a strong indicator of the value of Velo3D's technology, but it also limits future revenue potential from SpaceX for the same technology.

Stakeholder Impact

• Shareholders will benefit from the revenue generated by the agreement and the reduction in debt.
• Employees may see increased job security due to the new revenue stream.
• Customers may benefit from Velo3D's improved financial stability.
• Suppliers may see increased business with Velo3D.
• Creditors will benefit from the debt repayment.

Next Steps

• Velo3D will initiate the delivery of the licensed technology to SpaceX.
• Velo3D will provide ongoing support services to SpaceX.
• Velo3D will use 50% of the fees received to redeem outstanding debt.
• Velo3D will continue to develop and improve its technology.

Key Dates

Keywords

additive manufacturing, 3D printing, intellectual property, licensing, SpaceX, Velo3D, aerospace, technology, note holders, debt redemption