All deal memos Seed deal memoOct 2026Big bet: Defense and reindustrialization

Critical Materials Group

Modular plants that make military explosives, starting with C-4, built to add capacity next to the few aging government plants the US depends on.

Neil Gaikwad · critmatgroup.com

The bet in one paragraph

The US makes most of its military explosives at a handful of government-owned plants, some of them decades old. Demand from Ukraine, Israel and allied rearmament outran that capacity, and a single outage at one site ripples through the whole munitions supply. CMG builds small, automatable production lines that can sit near existing plants or supply chokepoints, starting with C-4 and moving to RDX and HMX. If it can qualify its material and win US programs, it becomes distributed capacity the Pentagon has said it wants and cannot build fast enough on its own.

Why this team

CEO Kevin Capozzoli is an Army Special Forces veteran who, by one outlet's account, was President and Chief Strategy Officer of Mach Industries, one of the best-funded new defense manufacturers. His lead investor describes him as an uncommon mix of end user and operator.

The co-founder makes this investable. Travis Swanson runs Rocky Mountain Scientific Laboratory, one of the few private labs that can formulate, test and qualify energetic materials. CMG acquired it in October 2026. Qualification is the slowest gate in this business, and they now own it.

Kevin CapozzoliCo-founder and CEOArmy Special Forces veteran; reported former President and Chief Strategy Officer of Mach Industries. tectonicdefense.com
Travis SwansonCo-founder and Chief Science OfficerCEO and co-founder of Rocky Mountain Scientific Laboratory, which formulates and tests energetics for military and law enforcement customers; acquired by CMG in October 2026. pulse2.com

What exists today, and what does not yet

Today

C-4 production at a Texas facility on a semi-automated line designed to become fully automated, using third-party raw materials. In-house formulation and testing through the acquired lab. Licensed under ATF and ITAR rules, per its website.

Not yet

Making RDX and HMX from the molecule up, which is on an 18-month roadmap, and the first plant in its planned network, due in 2027. The disclosed contract is with an unnamed foreign government; US programs are still in proposal.

Traction on the public record

Producing C-4 at a Texas facility for undisclosed customers. Sep 2026 · defensedaily.com
Under contract with one foreign government, with a pending proposal to fully automate C-4 production for US stakeholders. Feb 2026 · tectonicdefense.com
Headcount of 27, planned to reach about 80 by the end of 2026 and about 200 by the end of 2027. Sep 2026 · tectonicdefense.com
Acquired Rocky Mountain Scientific Laboratory; the combined company has nearly 60 people. Oct 2026 · pulse2.com

What I cannot see from outsideRevenue, contract values, the foreign customer, and how long US qualification of their material will take. Press places production in Texas while job postings point to Illinois, which I would want explained.

Competition, and why they could still win

Company	Stage	How it differs
Holston Army Ammunition Plant	Government-owned incumbent	Produces most of the Army's C-4 and RDX from one large legacy site. CMG positions itself as additional capacity, not a replacement. tectonicdefense.com
Mach Industries	$3.7B valuation	Vertically integrated drones and weapons with its own energetics arm; the CEO's reported former employer. evertiq.com
X-Bow Systems	Series B, $105M	Solid rocket motors, building an energetics campus near Austin and competing for the same workforce. washingtontechnology.com

Most new defense manufacturers are vertically integrated and make energetics for themselves. CMG sells explosives to everyone, including the primes and the new entrants, which makes it a supplier to the whole buildout rather than a competitor in one weapons category. Owning the qualification lab could cut the time from production to an accepted product, which is the moat in this market.

This company sits inside my big bet Defense becomes a manufacturing race.

What I would have to believe

Its C-4 qualifies for US programs within about two years.
Modular plants can be permitted and built near existing sites faster than new government capacity.
The company can raise the capital to grow from 27 to 200 people while integrating an acquisition.

Questions for the first call

What is your path to qualification for US programs, and how does owning the lab shorten it?
Which US customers have you quoted, and at what volumes?
Where are your production sites, and what permits are still outstanding?
What does your unit cost look like against Holston's output, and where does automation take it?
How much capital does the first network plant need, and how will you fund it?
What is your safety record to date, and who leads safety and compliance?

What gets them to a Series A

A US government or prime contract for C-4 or related materials.
A qualified product accepted into at least one munitions program.
A permitted site for the first network plant with a construction timeline.
In-house RDX or HMX synthesis demonstrated at pilot scale.

When I would walk away

A serious safety incident at a production site.
US qualification stalls beyond two years with no program commitments.

Risks

Facility commissioning is still ahead; the first network plant is due in 2027. runtimewire.com
Explosives manufacturing requires ATF licensing, ITAR compliance and site permits, each with its own timeline. critmatgroup.com
The only disclosed contract is with a foreign government; US work is still in proposal. tectonicdefense.com
Capital intensity on a $10.3M seed while far larger players build energetics capacity. evertiq.com

Sources

Written from public information only. No contact with the company, and no position in it. Nothing here is investment advice: these are my own notes on public information, written to sharpen judgment, not to recommend buying or selling anything.