Financial Performance - Service revenue for the three months ended June 30, 2024, was $1,209,000, compared to $1,705,000 for the same period in 2023, indicating a decrease of about 29%[13] - Gross profit for the six months ended June 30, 2024, was $1,317,000, down from $1,339,000 in the same period of 2023, reflecting a slight decline of approximately 1.6%[13] - Net loss for the three months ended June 30, 2024, was $7,016,000, compared to a net loss of $18,835,000 for the same period in 2023, representing an improvement of approximately 62.8%[13] - Momentus Inc. reported a net loss of $15.3 million for the six months ended June 30, 2024, compared to a net loss of $39.7 million for the same period in 2023, indicating a significant improvement in financial performance[18] - The company reported a net loss per share of $0.42 for the three months ended June 30, 2024, compared to a net loss per share of $9.81 for the same period in 2023, indicating a significant improvement[13] - The company reported a net loss of $7.0 million for the quarter ended June 30, 2024, compared to a net loss of $18.8 million in the same quarter of 2023, representing a 63% improvement[197] Assets and Liabilities - Total current assets decreased from $10,731,000 as of December 31, 2023, to $6,159,000 as of June 30, 2024, representing a decline of approximately 42.5%[11] - Cash and cash equivalents decreased from $2,118,000 as of December 31, 2023, to $897,000 as of June 30, 2024, a decline of about 57.7%[11] - Total liabilities decreased from $17,462,000 as of December 31, 2023, to $16,802,000 as of June 30, 2024, indicating a reduction of approximately 3.8%[11] - Total stockholders' equity (deficit) decreased from $3,187,000 as of December 31, 2023, to $(1,796,000) as of June 30, 2024, reflecting a change of approximately 156.4%[11] - Total prepaid and other current assets decreased from $8.5 million as of December 31, 2023, to $4.8 million as of June 30, 2024[92] - The company reported a net property, machinery, and equipment value of $2.8 million as of June 30, 2024, down from $3.3 million as of December 31, 2023[93] Expenses - Total operating expenses for the three months ended June 30, 2024, were $8,173,000, compared to $20,211,000 for the same period in 2023, showing a reduction of about 59.5%[13] - Research and development expenses for the three months ended June 30, 2024, were $2,850,000, compared to $10,204,000 for the same period in 2023, a decrease of about 72%[13] - Selling, general and administrative expenses also decreased from $10.0 million in Q2 2023 to $5.3 million in Q2 2024, reflecting cost-cutting measures across various categories[201] - Momentus incurred stock-based compensation expenses of $3.2 million for the six months ended June 30, 2024, compared to $4.3 million in the same period of 2023, reflecting cost management efforts[18] Cash Flow and Financing - The company used net cash of $6.4 million to fund its operating activities for the six months ended June 30, 2024, and had cash and cash equivalents of $0.9 million as of June 30, 2024[26] - The company expects to finance its operations through equity or debt financings, which may not be available on favorable terms[28] - The company continues to seek opportunities to access additional capital to alleviate its financial conditions[29] - Momentus raised gross proceeds of $247.3 million from its business combination with Stable Road Acquisition Corp, providing significant capital for future operations[24] Operational Highlights - Momentus has successfully launched four missions to date, deploying 17 customer satellites and providing hosted payload services, demonstrating operational capabilities[20] - The company has developed the Vigoride 7 Orbital Service Vehicle, which is intended for future missions or as a satellite bus, showcasing ongoing innovation in its product offerings[20] - Momentus is now offering the M-1000 satellite bus, which integrates innovations to improve sensor capability, maneuverability, and lower costs, positioning the company for growth in the satellite bus market[21] - The company anticipates considerable growth in the space transportation segment, driven by demand for small satellite transportation to low-earth orbit and emerging applications beyond[179] Legal and Regulatory Matters - The Company agreed to settle the Securities Class Actions for a total payment of $8.5 million, with at least $4.0 million funded by insurance proceeds[135] - The Company intends to vigorously defend against multiple shareholder derivative actions alleging similar claims as the Securities Class Actions[142][143] - The Company disputes allegations made by TLLT, which seeks damages in excess of $7.6 million related to investment contracts[147] - The Delaware Supreme Court affirmed the judgment of the Delaware Court of Chancery regarding the indemnification claim by Mr. Kokorich on November 30, 2023[151] Future Outlook - The company’s ability to continue as a going concern is dependent on successfully raising capital to fund operations and execute its business plan[25] - There is substantial doubt about the company's ability to continue as a going concern for at least one year from the issuance of the financial statements due to insufficient cash to fund operations and the need to raise additional capital[28] - The company’s consolidated interim financial statements have been prepared on a going concern basis, indicating potential adjustments if the company cannot continue operations[29]

Financial Performance - Net loss for the quarter was $8.313 million, compared to $20.825 million in the same period last year, a 60% improvement[13] - Net loss for Q1 2024 was $8.3 million, compared to $20.8 million in Q1 2023, showing a significant improvement[19] - Net cash used in operating activities decreased to $5.3 million in Q1 2024 from $18.7 million in Q1 2023[19] - Net loss improved by 60% to $8.3 million in Q1 2024 from $20.8 million in Q1 2023, reflecting reduced operating expenses and improved revenue[200] Revenue and Expenses - Service revenue increased from $22 thousand to $513 thousand, a significant growth of 2232%[13] - Research and development expenses decreased from $10.119 million to $2.676 million, a reduction of 74%[13] - Selling, general and administrative expenses decreased from $10.270 million to $6.164 million, a reduction of 40%[13] - Total operating expenses decreased from $20.389 million to $8.840 million, a reduction of 57%[13] - Service revenue increased to $513,000 in Q1 2024, up from $22,000 in Q1 2023, driven by engineering services for the Space Development Agency[200][201] - Research and development expenses decreased by 74% to $2.7 million in Q1 2024 from $10.1 million in Q1 2023, primarily due to reduced payroll and subcontractor costs[200][202] - Selling, general and administrative expenses decreased by 40% to $6.2 million in Q1 2024 from $10.3 million in Q1 2023, mainly due to lower professional fees and payroll costs[200][203] - Interest income decreased significantly to $18,000 in Q1 2024 from $555,000 in Q1 2023 due to changes in investment strategies[200][205] - Other income increased by 179% to $53,000 in Q1 2024 from $19,000 in Q1 2023, primarily due to non-recurring fees[200] Cash and Assets - Cash and cash equivalents decreased from $2.118 million to $1.672 million, a decline of 21%[11] - Total current assets decreased from $10.731 million to $9.319 million, a decline of 13%[11] - Cash and cash equivalents at the end of Q1 2024 were $2.0 million, down from $39.9 million at the end of Q1 2023[19] - Prepaid and other current assets decreased from $8.5 million in December 2023 to $7.2 million in March 2024, primarily due to a reduction in prepaid launch costs from $1.3 million to $0[88] - Property, machinery, and equipment net value decreased from $3.3 million in December 2023 to $3.0 million in March 2024, with depreciation expense remaining consistent at $0.2 million for both periods[91] - Intangible assets net value increased slightly from $341 thousand in December 2023 to $347 thousand in March 2024, with a weighted average remaining amortization period of 6.0 years[92][94] Liabilities and Equity - Total liabilities decreased from $17.462 million to $15.254 million, a decline of 13%[11] - Total stockholders' equity increased from $3.187 million to $3.485 million, a growth of 9%[11] - Accrued liabilities decreased from $4.8 million in December 2023 to $4.5 million in March 2024, with a significant drop in compensation expense from $392 thousand to $81 thousand[98] - The company repaid the remaining principal balance of its $25.0 million Term Loan during Q1 2024, with interest expense amortization decreasing from $0.5 million in March 2023 to $45.7 thousand in March 2024[102] Business Operations and Contracts - Momentus has launched four missions, deployed 17 customer satellites, and successfully demonstrated its Vigoride OSV in space[21] - The company has produced Vigoride 7, its next Orbital Service Vehicle, intended for future missions or as a satellite bus[21] - Momentus is now offering the M-1000 satellite bus, which shares substantial commonality with Vigoride and is designed for rapid and scalable production[22] - The company completed work on a Small Business Innovation Research contract, modifying the M-1000 and Vigoride systems to support U.S. Department of Defense payloads[23] - NASA selected the company for the Venture-Class Acquisition of Dedicated Rideshare (VADR) contract on August 22, 2024[170] Capital and Financing - Momentus received $247.3 million in gross proceeds from its Business Combination in August 2021[25] - The company completed a March 2024 securities offering, issuing 1.32 million shares of Class A common stock at $0.87 per share and raising $4.0 million in gross proceeds[105][106] - The March 2024 offering included pre-funded warrants for 3.3 million shares and warrants for 4.6 million shares, with the warrants priced at $0.74 per share and a 5-year term[105][106] - The company amended its January Warrants, reducing the exercise price from $0.96 to $0.74 per share and extending the termination date from January 2029 to June 2029[107] - The Company estimated an incremental increase in fair value of approximately $0.1 million for the January Modified Warrants using the Black-Scholes valuation model[108] - The Company issued 3,304,280 shares of Class A common stock as a result of all March Pre-Funded Warrants being exercised, receiving an immaterial amount of cash proceeds[108] - The January Offering included 900,000 shares of Class A common stock at $1.09 per share, 2,787,000 January Pre-Funded Warrants, and 3,687,000 January Warrants, with aggregate gross proceeds of approximately $4.0 million[109][110] - The Company estimated an incremental increase in fair value of approximately $1.2 million for the November Modified Warrants using the Black-Scholes valuation model[112] - The Company issued 2,787,000 shares of Class A common stock as a result of all January Pre-Funded Warrants being exercised, receiving an immaterial amount of cash proceeds[112] - The Company paid $10.0 million to the Co-Founders in March 2023 as part of the stock repurchase agreements, triggered by raising $10.0 million in the February Offering[113] - The company raised $2.75 million through a private placement offering of pre-funded warrants and Class A/B warrants in September 2024[173] Legal and Litigation - The company recorded a litigation settlement contingency of $8.5 million for the Securities Class Actions, with $4.0 million covered by insurance proceeds[138] - Shareholder derivative action filed by Justin Rivlin on April 25, 2023, alleging core claims similar to Securities Class Actions, with the company filing a motion to dismiss[144] - Shareholder derivative action filed by Brian Lindsey on June 30, 2023, also alleging core claims similar to Securities Class Actions, with the company intending to defend vigorously[145] - Unopposed motion for preliminary approval of settlement filed on August 26, 2024, with a settlement hearing scheduled for November 21, 2024[146] - TLLT filed a lawsuit on July 20, 2022, alleging fraudulent inducement and breach of contract, seeking damages exceeding $7.6 million[147][148] - Former co-founders Mikhail Kokorich and Lev Khasis filed claims for indemnification and advancement, with the company disputing these claims[149][150][151][152] - Delaware class actions (Shirley, Lora, and Burk Actions) consolidated under In re Momentus, Inc. Stockholders Litigation, with motions to dismiss filed and hearings scheduled[153][154][155][156][157][158] - Threatened claim by Stephen J. Purcell for $80,000 in attorney's fees related to a stockholder litigation demand letter, which the company disputes[159][160] - Disclosure demand letters and threatened fee petitions from Rigrodsky Law and Grabar Law Office, with the company disputing the merit of these claims[161] - Ongoing litigation may result in significant defense and settlement costs, potentially impacting the company's financial condition[162][163] - The company paid $526,000 to settle indemnification claims with former employees in September 2024[170] Stock and Compensation - The company's total stock-based compensation expense for RSUs & RSAs was $1.367 million for the three months ended March 31, 2024, compared to $1.601 million in the same period in 2023[128] - Stock-based compensation for the three months ended March 31, 2024 totaled $1.443 million, compared to $1.720 million in the same period in 2023[127][128] - Total unrecognized compensation cost related to unvested RSUs as of March 31, 2024 is $12.2 million, expected to be recognized over a weighted-average period of 1.2 years[126] - Outstanding unvested and expected to vest RSUs had an intrinsic value of $0.1 million as of March 31, 2024[126] - The 2021 Equity Incentive Plan increased by 248,508 shares due to the evergreen provision and 830 shares due to forfeitures, with 317,938 shares remaining available for grant as of March 31, 2024[119] - The Company had an outstanding liability of $23.4 thousand pertaining to the 2021 ESPP Plan as of March 31, 2024[121] - The company issued 2,700 shares of Class A common stock to a third-party consulting firm in March 2023, with a fair value of $0.1 million[129] - Potential common shares excluded from diluted earnings per share calculation due to anti-dilutive effect totaled 14,823,062 for the three months ended March 31, 2024[131] Taxes and Accounting - The company's effective tax rate for Q1 2024 and Q1 2023 was 0%, influenced by factors such as changes in statutory rates and valuation of deferred tax assets[164] - The effective tax rate varies due to changes in statutory rates, valuation of deferred tax assets, and nondeductible items, with a federal statutory rate of 21%[197] - The company accounts for income taxes using the asset and liability method, with deferred tax assets and liabilities measured using the enacted tax rate[77] - The company is currently evaluating the impact of ASU 2023-03 and ASU 2023-06 on its financial statement disclosures and results of operations[83] Other Financial Information - The company recorded $0.5 million of revenue from U.S. Government engineering services in Q1 2024, compared to $0 in Q1 2023[49] - Total revenue for Q1 2024 was $513 thousand, consisting of $478 thousand from engineering services and $35 thousand from forfeited customer deposits[51] - Customer deposit balances were $1.1 million as of March 31, 2024, with $0.6 million classified as non-current deposits[50] - Deferred fulfillment and prepaid launch costs decreased from $1.7 million in December 2023 to $0.4 million in March 2024[42] - Restricted cash of $0.4 million is held as collateral for a letter of credit related to a lease agreement[41] - The company paid $10.0 million to satisfy stock repurchase agreement contingent liabilities in Q1 2023[56] - Warrant liability remained unchanged at $3 thousand from December 2023 to March 2024, with increased volatility assumption from 113.50% to 151.72%[56][57] - The company is classified as an emerging growth company and expects to continue using extended transition period benefits for new accounting standards[37][39] - Fixed assets have estimated useful lives ranging from 3 years for computer equipment to 7 years for machinery and equipment[38] - Intangible assets, primarily patents, are amortized over 10 years using the straight-line method[45] - The company recorded equity related to the Public Warrants of $20.2 million and a liability related to the Private Warrants of $31.2 million upon the consummation of the Business Combination[62] - The company issued 225,450 Private Warrants and 172,500 Public Warrants, each entitling the holder to purchase one share of Class A common stock at $575.00 per share[60] - The fair value of the Private Warrants was measured using the Black-Scholes option-pricing model and recorded as liabilities on the condensed consolidated balance sheet[61] - The company recognized $0.5 million of revenue during the quarter ended March 31, 2024, with 93.2% derived domestically and 6.8% from foreign customers[81] - The company did not contribute to its 401(k) plan during the three months ended March 31, 2024 and 2023[71] - The company evaluates the carrying value of long-lived assets annually and recorded no impairments during the three months ended March 31, 2024 and 2023[67] - The company's operating lease ROU assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments[74] - The company's cash and cash equivalents are placed in banks that management believes are creditworthy, though deposits may exceed federally insured limits[79] - Future unconditional purchase obligations as of March 31, 2024 total $6.072 million, with $3.097 million due in the remainder of 2024 and $2.975 million in 2025[132] - The company paid $40 million to the Co-Founders following the Business Combination and an additional $10 million in February 2023[140][141] - Legal expenses related to CFIUS review and other matters were approximately $0.1 million for both the three months ended March 31, 2024 and 2023[141] - The company issued $500,000 in promissory notes to directors and an officer at a 5.12% annual interest rate, repaid in full by September 12, 2024[165] - The company borrowed $2.3 million through a convertible promissory note with a 15% annual interest rate, secured by company assets, and maturing on September 1, 2025[167] - The convertible note allows for interest payments in shares of Class A common stock at a conversion price of $0.53 per share[168] - The company recognized $0.5 million in revenue for Q1 2024, primarily from U.S. government engineering services and forfeited customer deposits[187] - As of March 31, 2024, the company held $1.1 million in customer deposits, with $0.6 million recorded as non-current contract liabilities[187] - The company has launched four missions, deployed 17 customer satellites, and successfully demonstrated its Vigoride OSV in space[185] - The company expensed all research and development costs associated with developing and building its vehicles as of March 31, 2024[191] - The company incurred additional expenses as a public company, including compliance and reporting obligations under SEC regulations[192] - The fair value of warrant liability decreased by $112,000 in Q1 2023, driven by market price changes of publicly listed warrants[200][204]

Core Points - Momentus, Inc. and Stable Road Acquisition Corp. (SRAC) are involved in a fair fund distribution due to misleading statements made during their merger process [4][15][17] - The Securities and Exchange Commission (SEC) has ordered the payment of $8,040,000 in civil penalties, which will be distributed to affected investors through the Momentus Stable Road Fair Fund [6][18] Group 1: Background and Misconduct - On October 7, 2020, Momentus and SRAC announced their merger, which included materially false statements about Momentus' technology success [4] - The SEC found that Momentus and its former CEO, Mikhail Kokorich, concealed national security concerns related to Kokorich's foreign ownership, impacting the company's launch schedule and revenue projections [5][15] - Following the SEC's findings, Momentus' enterprise valuation dropped from $1.1 billion to less than $600 million due to adverse licensing decisions stemming from national security risks [5] Group 2: Fair Fund and Claim Process - The Fair Fund is established to compensate investors who purchased SRAC common stock, warrants, or units during the recovery period from October 7, 2020, to July 13, 2021 [13][19] - Claimants must submit a completed Claim Form by July 4, 2024, to be eligible for a distribution payment, with a minimum recognized loss of $10.00 required [8][10] - The Fund Administrator, Epiq Class Action & Claims Solutions, Inc., will notify claimants of their claim status within 90 days of the claims bar date [11][23]

Financial Performance and Funding - Momentus has incurred significant losses since its inception and expects to continue incurring losses in the future, raising concerns about achieving or maintaining profitability [18]. - The company requires substantial additional funding to finance its operations, but adequate financing may not be available when needed or on acceptable terms [18]. - Momentus had cash and cash equivalents of $2.1 million as of December 31, 2023, primarily invested in highly liquid investments [402]. - Momentus' term loan indebtedness bears interest at a fixed rate, insulating it from interest rate changes [403]. Market Opportunities and Growth - The total addressable market for in-space transportation is estimated at approximately $2 billion annually, projected to double to $4 billion by 2025, including $2-2.5 billion for onboard satellite propulsion and $1.5-2 billion for "space tugs" [50]. - The broader space economy is valued at $546 billion in 2023, with an expected growth to over $1 trillion by 2040, indicating a significant market opportunity for Momentus [49]. - The demand for small satellites and satellite buses is anticipated to grow, driven by advancements in technology and the increasing number of satellite constellations [44][45]. - Momentus aims to capture emerging markets in the space economy by providing new service offerings and utilizing various marketing approaches [87]. Services and Technology Development - Momentus plans to provide a range of services including last mile satellite transportation, on-orbit refueling, and debris removal, which are expected to lower operating costs for satellite operators [34]. - The company is developing its Tape Spring Solar Array (TASSA), which aims to produce power at significantly lower costs than competing arrays and offers advantages in deployment and maneuverability [33]. - Momentus aims to offer a range of in-orbit services, including inspection, refueling, and maintenance, as the number of satellites in space increases [45][51]. - The company plans to transition its OSVs from expendable to reusable, which could significantly lower service delivery costs [37][59]. - Momentus's transportation service is expected to provide cost-effective options for customers compared to traditional ride-share and dedicated small launch vehicles [48]. - The company has developed a patent-pending water plasma propulsion technology and holds eight issued patents with applications for six additional patent families as of December 31, 2023 [86]. Operational Challenges and Risks - Momentus has a history of delivering customer satellites using its service vehicles since 2022, but setbacks during missions could adversely affect its business and reputation [18]. - The company is subject to stringent U.S. export and import control laws, and failure to comply could have a material adverse effect on its business [20]. - Momentus operates in a highly competitive industry, which may necessitate price reductions to maintain market share [18]. - The market for in-space infrastructure services is not well established, and growth may be slower than anticipated [20]. - The company relies on third-party launch vehicles for deploying its satellites, and any delays could negatively impact its financial condition [20]. - Momentus has a limited operating history, making it difficult to evaluate its future prospects and the risks it may encounter [20]. Mission Accomplishments and Developments - Momentus conducted three test and demonstration missions of its Vigoride OSV in 2022 and 2023, with the vehicle designed to transport up to 750 kg of customer payloads in low-earth orbit (LEO) [56][57]. - Momentus launched its first orbital service vehicle, Vigoride 3, on May 25, 2022, deploying a total of 8 customer satellites during its inaugural mission [66][70]. - The Vigoride 5 mission, launched on January 3, 2023, successfully completed primary mission objectives, including the deployment of a cubesat and a complex hosted payload, with over 300 thruster firings totaling 6 hours and 58 minutes [74]. - During the Vigoride 6 mission on April 14, 2023, Momentus deployed all customer payloads, including CubeSats for NASA's LLITED mission, although one deployment experienced a mapping error [75][76]. - Momentus has conducted four missions to date, deploying a total of 17 customer satellites and providing hosted payload services [80]. - The Vigoride 6 mission included a demonstration of the Tape Spring Solar Array (TASSA), which showed significant performance capabilities during its test [77][78]. Regulatory and Compliance Matters - Momentus has received FCC licenses for its missions, including Vigoride 5 and Vigoride 6, and is actively pursuing compliance with evolving regulatory requirements [89]. - Momentus engaged with the FAA for ongoing payload reviews to address national security concerns raised during interagency reviews [97]. - The FAA denied a payload review application in May 2021 due to concerns regarding Momentus' corporate structure at that time [91]. - The company completed the final divestiture payment related to the National Security Agreement in March 2023 and requested termination of the NSA in December 2023, which was granted in January 2024 [100]. Infrastructure and Human Resources - The company leased a 65,000-square-foot facility in San Jose, California, to support Vigoride assembly and testing, allowing for increased production volumes [102]. - Momentus is focused on optimizing human capital resources and actively recruiting talent with experience in defense and aerospace sectors [101]. - Momentus has established relationships with multiple launch providers, including SpaceX, to maximize flexibility and service resiliency for its customers [81][84].

Market Overview - The overall market is currently just 1.5% from its all-time high and has increased over 4% this month, leading to heightened speculation in small-cap penny stocks [1][6] - Retail investors' interest in small-cap stocks has surged following recent meme mania, despite the associated risks of volatility, low volume, and weak fundamentals [1][6] Smart for Life Inc. (SMFL) - Smart for Life Inc. experienced a dramatic surge in trading volume, with 25 million shares traded compared to an average of 800k, resulting in a stock price increase of over 50% [2] - The catalyst for this movement was the announcement of a comprehensive restructuring plan, which included recapitalization and selling non-performing assets [2] - Despite the positive developments, the stock is down 50% year-to-date and has a history of closing weak after volume surges, with a micro float of under 500k shares contributing to its volatility [2] Momentus Inc. (MNTS) - Momentus Inc. saw a significant increase in trading volume, with over 40 million shares traded today, leading to an 11% rise in stock price [4] - The increase was driven by a contract secured from DARPA for the design and demonstration of technologies for large-scale structures in space [4] - The stock is down over 60% year-to-date and nearly 90% on the year, with a small float of just 16 million shares contributing to its price volatility [4] Sharps Technology, Inc. (STSS) - Sharps Technology experienced a notable surge in volume, trading over 90 million shares today, compared to an average of 17 million, resulting in a nearly 20% increase in stock price [5] - The surge was driven by a 5-year, $200 million syringe sales agreement and an amendment to an asset purchase agreement for producing specialty syringes in the U.S. [5] - Despite today's gains, the stock remains down almost 50% from its 52-week high, and there are concerns about potential share dilution to raise operational capital [5]

Group 1 - Momentus has signed a new deal with the Defense Advanced Research Projects Agency (DARPA) to build large-scale structures in space, including transporting raw materials from Earth for orbital construction [1][2] - The program Momentus is joining is called DARPA Novel Orbital and Moon Manufacturing, Materials, and Mass-efficient Design (NOM4D), focusing on building solar arrays, antennas, and optics in space [2] - Momentus CEO John Rood expressed enthusiasm about the partnership, highlighting the capabilities of Vigoride to support the demonstration of NOM4D technologies that address current limitations in in-space structures [3] Group 2 - Following the announcement of the DARPA deal, Momentus stock (MNTS) experienced significant trading activity, with over 39 million shares traded, far exceeding its average daily volume of approximately 1.1 million shares [3] - As of Thursday morning, MNTS stock has risen by 12.3% [4]

Whenever a company receives a deficiency notice from an exchange, investors can typically expect the stock to fall precipitously. But that’s not the case with Momentus (NASDAQ:MNTS) today. In fact, MNTS stock is moving higher on such an announcement.Currently, MNTS stock is up around 35% in afternoon trading. This move comes on news that the company revealed in an 8-K filing that it received a deficiency letter from the Nasdaq. The letter notified the company that it is not in compliance with listing rules. ...

Financial Data and Key Metrics Changes - Momentus ended Q3 2023 with unrestricted cash and cash equivalents of $9.8 million, with approximately $5.7 million in outstanding gross debt [46] - The company generated approximately $15.1 million in losses from operations, an improvement of 31% compared to $21.6 million in losses from Q3 of 2022 [49] - Non-GAAP adjusted EBITDA was negative $10.6 million for Q3 2023, showing a sequential improvement of approximately $4.1 million from Q2 2023 [49] - Operating expenses for Q3 were $15.3 million, a 30% year-over-year improvement from the previous year [61] Business Line Data and Key Metrics Changes - Momentus signed six new commercial contracts since mid-August, indicating growing demand from both new and repeat customers [6] - The company has successfully deployed 18 satellites to orbit using its Vigoride Orbital Service Vehicle [28][19] - The M-1000 satellite bus, based on the Vigoride, is gaining positive reactions from both commercial and government customers [74] Market Data and Key Metrics Changes - The global space economy grew 8% in 2022, reaching $546 billion, with the commercial space market climbing nearly 8% to over $427 billion [36] - U.S. government spending on space programs reached $69.9 billion in 2022, with a significant portion from the Department of Defense [36] - Total space spending by the U.S. Department of Defense and intelligence agencies is estimated to have grown to $42.9 billion in 2022, a 21% year-over-year increase [37] Company Strategy and Development Direction - Momentus aims to grow in the space market by expanding its product offerings to include the M-1000 satellite bus and pursuing in-space logistics and satellite servicing [19][44] - The company is actively seeking new investors while considering a full range of strategic options [45] - Momentus is positioned to capitalize on opportunities in the large and mature satellite bus market and the expanding space servicing market [44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges of a shortening cash runway but emphasized ongoing efforts to raise additional capital and evaluate strategic alternatives [7] - The company is optimistic about future growth, driven by increased interest from U.S. government customers and the signing of new contracts [58] - Management expressed confidence in their capabilities and solutions, anticipating heightened demand for their services [16] Other Important Information - Momentus has reduced its cash burn rate significantly, with operating expenses down over 50% year-over-year from Q3 2022 to Q3 2023 [2] - The company completed a reverse stock split to meet NASDAQ listing requirements and aid in future capital raising [50] - The company is testing new technologies, including the Microwave Electrothermal Thruster and the Tape Spring Solar Array, to enhance its competitive advantage [9][41] Q&A Session Summary Question: What is the status of the SDA bid for Tranche 2? - Momentus was not selected for the contract, but management noted that the process provided valuable experience and they are optimistic about future bids [66][69] Question: What are the prospects for the M-1000 satellite bus? - The M-1000 bus is based on the Vigoride and is receiving positive feedback from both commercial and government customers, leveraging the flight heritage of the Vigoride [74][75] Question: What factors are contributing to the recent contract signings? - Management highlighted the differentiated capabilities of the M-1000 satellite bus and the company's proactive engagement with potential customers [78]

Q3 2023 Business and Financial Highlights November 14, 2023 The technology underlying our anticipated service offerings is still in the process of being developed, and has not been fully tested or validated in space. Our ability to execute on our business plan is dependent on the successful development and commercialization of our technologies. Development of space technologies is extremely complex, time consuming, and expensive, and there can be no assurance that our predicted theoretical and ground-based ...

Part I - Financial Information This section presents Momentus Inc.'s unaudited financial statements and management's analysis of financial condition and results [Item 1. Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Momentus Inc.'s unaudited financial statements reveal decreased cash, net losses, and going concern doubts, alongside capital raises and a reverse stock split [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets reflect significant decreases in cash, total assets, and liabilities, with stockholders' equity also declining Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Cash and cash equivalents | $9,750 | $61,094 | | Total current assets | $21,157 | $76,274 | | Total assets | $33,489 | $92,423 | | LIABILITIES (in thousands) | | | | Total current liabilities | $23,102 | $43,226 | | Total liabilities | $29,197 | $53,816 | | STOCKHOLDERS' EQUITY (in thousands) | | | | Total stockholders' equity | $4,292 | $38,607 | - Cash and cash equivalents decreased significantly from **$61.1 million** at December 31, 2022, to **$9.8 million** at September 30, 2023[14](index=14&type=chunk) - Total assets declined from **$92.4 million** to **$33.5 million**, while total liabilities decreased from **$53.8 million** to **$29.2 million** over the same period[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations show increased service revenue and gross profit, reduced expenses, and a decreased net loss Condensed Consolidated Statements of Operations (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Service revenue | $339 | $129 | $2,066 | $179 | | Gross profit | $220 | $115 | $1,559 | $153 | | Research and development expenses | $5,992 | $10,571 | $26,315 | $31,438 | | Selling, general and administrative expenses | $9,294 | $11,184 | $29,571 | $38,898 | | Loss from operations | $(15,066) | $(21,640) | $(54,327) | $(70,183) | | Net loss | $(15,159) | $(21,298) | $(54,819) | $(71,004) | | Net loss per share, basic and diluted | $(7.20) | $(12.98) | $(28.45) | $(43.77) | - Service revenue increased significantly for both the three-month period (**163% YoY**) and nine-month period (**1054% YoY**) ending September 30, 2023[16](index=16&type=chunk) - Net loss decreased by **29%** for the three months ended September 30, 2023, and by **23%** for the nine months ended September 30, 2023, compared to the same periods in the prior year[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased significantly due to net losses, partially offset by capital raised through common stock and warrant issuances Changes in Stockholders' Equity (in thousands) | Item | Balance, Dec 31, 2022 | Balance, Sep 30, 2023 | | :-------------------------------------------- | :-------------------- | :-------------------- | | Total stockholders' equity | $38,607 | $4,292 | | Additional paid-in capital | $342,734 | $363,238 | | Accumulated deficit | $(304,127) | $(358,946) | | Net loss (Nine Months Ended Sep 30, 2023) | N/A | $(54,819) | | Issuance of common stock and related warrants | N/A | $13,865 | - Total stockholders' equity decreased from **$38.6 million** at December 31, 2022, to **$4.3 million** at September 30, 2023, primarily due to net losses[18](index=18&type=chunk) - The company issued common stock and related warrants in registered offerings, contributing **$9.3 million** (March 31, 2023) and **$4.6 million** (September 30, 2023) to additional paid-in capital[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The condensed consolidated statements of cash flows reflect decreased net cash used in operating activities, but an overall substantial decrease in total cash and equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(45,987) | $(71,495) | | Net cash used in investing activities | $(7) | $(641) | | Net cash used in financing activities | $(5,905) | $(6,244) | | Decrease in cash, cash equivalents and restricted cash | $(51,899) | $(78,380) | | Cash, cash equivalents and restricted cash, end of period | $10,514 | $82,167 | - Net cash used in operating activities decreased by **35.7%** from **$71.5 million** in 2022 to **$46.0 million** in 2023 for the nine months ended September 30[21](index=21&type=chunk) - The company's total cash, cash equivalents, and restricted cash significantly decreased from **$82.2 million** at September 30, 2022, to **$10.5 million** at September 30, 2023[21](index=21&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes to the condensed consolidated financial statements cover operations, accounting policies, and specific financial items including assets, liabilities, equity, and subsequent events [Note 1. Nature of Operations](index=10&type=section&id=Note%201.%20Nature%20of%20Operations) Momentus Inc. provides satellite buses and in-space services, but faces significant financial challenges and going concern doubts due to net losses and insufficient cash - Momentus offers satellite buses and in-space infrastructure services, including in-space transportation, hosted payloads, and in-orbit services, powered by its water plasma-based propulsion system[22](index=22&type=chunk) - The company has successfully launched Vigoride 3, 5, and 6 OSVs, deploying a total of **20 customer satellites** and testing its Microwave Electrothermal Thruster (MET) and Tape Spring Solar Array (TASSA) technologies[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Momentus is developing the M-1000 satellite bus, which shares commonality with Vigoride, and is pursuing U.S. Department of Defense contracts, including a bid for the Tranche 2 Tracking Layer[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The company's financial position, marked by net losses of **$15.2 million** (Q3 2023) and **$54.8 million** (YTD Q3 2023), an accumulated deficit of **$358.9 million**, and **$9.7 million** in cash, raises substantial doubt about its ability to continue as a going concern, requiring significant additional capital[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) - Effective August 22, 2023, the company completed a **1-for-50 reverse stock split** of its Class A common stock[45](index=45&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=13&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines Momentus Inc.'s significant accounting policies, including GAAP, consolidation, estimates, revenue recognition, warrants, stock-based compensation, and segment reporting - The company prepares its unaudited interim condensed consolidated financial statements in accordance with GAAP and SEC rules, with certain information condensed or omitted[48](index=48&type=chunk) - Revenue for transportation services is recognized at a point in time upon payload delivery, while in-orbit services revenue is recognized ratably over time[65](index=65&type=chunk)[66](index=66&type=chunk) - Warrants are classified as derivative liabilities (Level 3 fair value hierarchy) or equity, with changes in fair value recognized in the statements of operations for liabilities[71](index=71&type=chunk)[75](index=75&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) - Stock-based compensation is recognized based on grant date fair values using the Black-Scholes Merton Option Pricing model for options and ESPP, and closing stock price for RSUs[86](index=86&type=chunk)[87](index=87&type=chunk) - The company operates as one operating and reportable segment, providing in-space transportation services[101](index=101&type=chunk)[102](index=102&type=chunk) [Note 3. Prepaids and Other Current Assets](index=21&type=section&id=Note%203.%20Prepaids%20and%20Other%20Current%20Assets) Prepaids and other current assets, primarily prepaid launch costs, R&D, and insurance, totaled **$10.5 million** as of September 30, 2023, a slight increase from **$10.2 million** at December 31, 2022 Prepaids and Other Current Assets (in thousands) | (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------ | :----------- | :----------- | | Prepaid launch costs, current | $4,493 | $3,000 | | Prepaid research and development | $2,377 | $2,841 | | Prepaid insurance and other assets | $3,599 | $4,332 | | Total | $10,469 | $10,173 | - Non-current prepaid launch costs decreased from **$4.4 million** at December 31, 2022, to **$1.9 million** at September 30, 2023[104](index=104&type=chunk) [Note 4. Property, Machinery and Equipment, net](index=21&type=section&id=Note%204.%20Property,%20Machinery%20and%20Equipment,%20net) Net property, machinery, and equipment decreased to **$3.4 million** as of September 30, 2023, from **$4.0 million** at December 31, 2022, primarily due to accumulated depreciation Property, Machinery and Equipment, net (in thousands) | (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------ | :----------- | :----------- | | Property, machinery and equipment, gross | $5,702 | $5,808 | | Less: accumulated depreciation | $(2,349) | $(1,792) | | Property, machinery and equipment, net | $3,353 | $4,016 | - Depreciation expense for property, machinery, and equipment was **$0.6 million** for the nine months ended September 30, 2023, down from **$0.7 million** in the prior year period[105](index=105&type=chunk) [Note 5. Intangible Assets, net](index=21&type=section&id=Note%205.%20Intangible%20Assets,%20net) Net intangible assets, primarily patents, were **$0.329 million** as of September 30, 2023, slightly down from **$0.337 million** at December 31, 2022, with a weighted-average remaining amortization period of **6.4 years** Intangible Assets, net (in thousands) | (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------ | :----------- | :----------- | | Patents/Intellectual Property, Gross Value | $492 | $461 | | Accumulated Amortization | $(163) | $(124) | | Net Value | $329 | $337 | | Weighted Average Remaining Amortization Period (In Years) | 6.4 | 7.0 | - Amortization expense for intangible assets was **$0.04 million** for the nine months ended September 30, 2023, a decrease from **$0.10 million** in the prior year period[106](index=106&type=chunk) [Note 6. Leases](index=23&type=section&id=Note%206.%20Leases) The company leases office space under non-cancellable operating leases, with total lease expense of **$1.5 million** for the nine months ended September 30, 2023, and a weighted-average remaining lease term of **4.4 years** Operating Lease Expense (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Operating lease cost | $368 | $385 | $1,103 | $1,229 | | Variable lease expense | $136 | $138 | $394 | $429 | | Total lease expense | $504 | $544 | $1,497 | $1,680 | Maturities of Operating Lease Liabilities (in thousands) | (in thousands) | Amount | | :------------------ | :----- | | Remainder of 2023 | $383 | | 2024 | $1,580 | | 2025 | $1,627 | | 2026 | $1,674 | | 2027 | $1,729 | | Thereafter | $298 | | Total lease payments | $7,291 | | Less: Imputed interest | $(865) | | Present value of lease liabilities | $6,426 | [Note 7. Accrued Liabilities](index=24&type=section&id=Note%207.%20Accrued%20Liabilities) Accrued liabilities totaled **$7.4 million** as of September 30, 2023, a decrease from **$8.0 million** at December 31, 2022, primarily comprising legal, professional services, and compensation expense Accrued Liabilities (in thousands) | (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------ | :----------- | :----------- | | Legal and other professional services | $3,882 | $3,128 | | Compensation expense | $2,947 | $3,584 | | Research and development projects | $451 | $981 | | Other accrued liabilities | $142 | $333 | | Total | $7,422 | $8,026 | [Note 8. Loan Payable](index=24&type=section&id=Note%208.%20Loan%20Payable) The Term Loan had **$5.7 million** gross payable as of September 30, 2023, maturing by February 28, 2024, with an effective interest rate of **28.2%** after an extended repayment schedule - The Term Loan provides up to **$40.0 million** in borrowing capacity at an annual interest rate of **12%**, with **$25.0 million** borrowed at inception[113](index=113&type=chunk) - The principal repayment schedule was extended to two years, ending February 28, 2024, resulting in a recalculated effective interest rate of **28.2%**[114](index=114&type=chunk)[116](index=116&type=chunk) - As of September 30, 2023, the total loan payable was **$5.7 million**, with future scheduled maturities of **$3.4 million** for the remainder of 2023 and **$2.3 million** for 2024[117](index=117&type=chunk) [Note 9. Stockholders' Equity](index=24&type=section&id=Note%209.%20Stockholders%27%20Equity) This note details changes in stockholders' equity, including a **1-for-50 reverse stock split** and **September ($5.0 million)** and **February ($10.0 million)** 2023 securities offerings, with proceeds from the latter used for a co-founder stock repurchase liability - A **1-for-50 reverse stock split** of Class A common stock was approved and became effective on August 22, 2023[118](index=118&type=chunk)[119](index=119&type=chunk) - In September 2023, the company raised approximately **$5.0 million** gross proceeds from a registered offering of **210,000 shares** of Class A common stock, pre-funded warrants, and Series A and B warrants[121](index=121&type=chunk)[123](index=123&type=chunk) - In February 2023, the company raised approximately **$10.0 million** gross proceeds from a registered offering of **187,920 shares** of Class A common stock, pre-funded warrants, and Class A warrants, with proceeds used to satisfy a **$10.0 million** co-founder stock repurchase liability[128](index=128&type=chunk)[130](index=130&type=chunk)[135](index=135&type=chunk) - As of September 30, 2023, the company had public and private warrants outstanding to purchase **172,500** and **225,450 shares**, respectively, from the Business Combination, and additional warrants from the February and September 2023 offerings[136](index=136&type=chunk)[138](index=138&type=chunk) - The fair value of private warrants assumed from the Business Combination decreased by **$0.2 million** and **$0.6 million** for the three and nine months ended September 30, 2023, respectively[139](index=139&type=chunk) [Note 10. Stock-based Compensation](index=28&type=section&id=Note%2010.%20Stock-based%20Compensation) Momentus Inc. maintains several stock incentive plans, with total stock-based compensation expense of **$6.5 million** for the nine months ended September 30, 2023, primarily from RSUs and RSAs - The 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan include evergreen provisions for increasing available shares[146](index=146&type=chunk)[147](index=147&type=chunk) Stock-based Compensation Expense by Type (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2023 | | :---------------------------------- | :------------------------------ | :----------------------------- | | Research and development expenses | $472 | $1,629 | | Selling, general and administrative expenses | $1,684 | $4,824 | | Total | $2,156 | $6,453 | Stock-based Compensation Expense by Award Type (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2023 | | :------------- | :------------------------------ | :----------------------------- | | Options | $81 | $269 | | RSUs & RSAs | $2,068 | $6,167 | | ESPP | $7 | $17 | | Performance Awards | $0 | $0 | | Total | $2,156 | $6,453 | - As of September 30, 2023, unrecognized compensation cost for unvested options was **$0.4 million** (expected over **1.2 years**) and for unvested RSUs was **$17.6 million** (expected over **1.6 years**)[151](index=151&type=chunk)[154](index=154&type=chunk) [Note 11. Diluted Earnings Per Share](index=32&type=section&id=Note%2011.%20Diluted%20Earnings%20Per%20Share) Due to net losses, all potential common shares (options, unvested stock units, warrants, and contingent Sponsor Earnout Shares) were excluded from diluted EPS calculations as their effect would be anti-dilutive Potential Common Shares Excluded from Diluted EPS (Anti-Dilutive) | (in thousands) | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2023 | | :---------------------------------- | :------------------------------ | :----------------------------- | | Options and unvested stock units outstanding | 296,861 | 235,736 | | Warrants outstanding | 629,271 | 629,271 | | Contingent Sponsor Earnout Shares | 28,750 | 28,750 | | Total | 954,882 | 893,757 | - The company incurred a net loss for both periods, rendering all potential common shares anti-dilutive and thus excluded from diluted EPS calculations[160](index=160&type=chunk) [Note 12. Commitments and Contingencies](index=32&type=section&id=Note%2012.%20Commitments%20and%20Contingencies) Momentus Inc. faces various legal proceedings, including an **$8.5 million** securities class action settlement, an NSA requiring co-founder divestment and a **$10.0 million** payment, and ongoing shareholder, SAFE note, and founder litigation Future Unconditional Purchase Obligations (in thousands) | (in thousands) | Amount | | :---------------- | :----- | | Remainder of 2023 | $15,226 | | 2024 | $600 | | Total | $15,826 | - The company reached an agreement in principle to settle Securities Class Actions for **$8.5 million**, with **$5.0 million** deposited in escrow as of September 30, 2023, and **$4.0 million** expected from insurance proceeds[165](index=165&type=chunk)[166](index=166&type=chunk)[169](index=169&type=chunk) - The National Security Agreement (NSA) required co-founders to divest their equity interests, leading to a **$10.0 million** payment in Q1 2023[171](index=171&type=chunk)[172](index=172&type=chunk) - Momentus is actively defending against multiple shareholder derivative actions, SAFE Note litigation, and founder litigation, incurring significant legal expenses[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk)[192](index=192&type=chunk) - Legal expenses related to CFIUS and SEC matters were **$0.3 million** for the nine months ended September 30, 2023, a decrease from **$1.6 million** in the prior year[174](index=174&type=chunk) [Note 13. Income Taxes](index=38&type=section&id=Note%2013.%20Income%20Taxes) The company's effective tax rate was **zero percent** for the three and nine months ended September 30, 2023 and 2022, primarily due to non-deductible items and a full valuation allowance against deferred tax assets - The effective tax rate was **zero percent** for the three and nine months ended September 30, 2023 and 2022[198](index=198&type=chunk) - The difference from the federal statutory rate of **21%** is mainly due to non-deductible items, state/local taxes, and a full valuation allowance for deferred tax assets[198](index=198&type=chunk) [Note 14. Subsequent Events](index=38&type=section&id=Note%2014.%20Subsequent%20Events) Subsequent to September 30, 2023, Momentus Inc. completed an **October 2023 offering** raising **$4.0 million** and a **November 2023 warrant inducement** generating **$6.5 million**, while also amending existing warrants and making settlement payments - On October 2, 2023, the company entered an agreement to sell **290,000 shares** of Class A common stock at **$2.00 per share**, raising approximately **$4.0 million** gross proceeds, and issued pre-funded and new warrants[199](index=199&type=chunk)[200](index=200&type=chunk) - Existing Series A, Series B, and February Class A Warrants were amended to reduce their exercise price to **$2.00 per share** and extend their termination date to October 4, 2028[201](index=201&type=chunk) - On November 7, 2023, a warrant inducement agreement led to the issuance of new warrants for **5,808,538 shares** and the exercise of existing warrants, generating approximately **$6.5 million** in gross proceeds[205](index=205&type=chunk)[206](index=206&type=chunk) - Post-period, the company paid **$1.0 million** into the Securities Class Action escrow account, and an insurance carrier paid an additional **$0.5 million**, reducing the contingency to **$3.5 million**[203](index=203&type=chunk) - On October 18, 2023, Momentus paid Lev Khasis **$0.1 million** related to Founder Litigation legal expenses[204](index=204&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Momentus Inc.'s financial condition and operations, highlighting commercial space services and technology, while acknowledging substantial net losses, cash burn, going concern doubts, and recent capital raises and a reverse stock split [Overview](index=40&type=section&id=Overview) This overview describes Momentus Inc.'s business model, focusing on satellite buses, transportation, and infrastructure services for commercial and government space missions, driven by decreasing launch costs and smaller satellites, while acknowledging the dependence on successful technology commercialization - Momentus offers satellite buses, transportation, and infrastructure services for commercial and U.S. government space missions, focusing on 'last mile' satellite transportation using Orbital Service Vehicles (OSVs)[212](index=212&type=chunk)[214](index=214&type=chunk) - The company's services are enabled by decreasing launch costs and smaller, lower-cost satellites, driving growth in the commercial space market[216](index=216&type=chunk)[217](index=217&type=chunk) - Momentus has launched Vigoride 5 and 6 OSVs, successfully testing the Microwave Electrothermal Thruster (MET) and Tape Spring Solar Array (TASSA) technologies[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - The company's ability to execute its business plan depends on the continued development and successful commercialization of its technologies, with no assurance of full commercial viability[227](index=227&type=chunk) [Services Overview](index=42&type=section&id=Services%20Overview) Momentus plans to provide space transportation using a hub-and-spoke model, hosted payload services, and in-orbit servicing with future reusable vehicles, also offering the M-1000 satellite bus - Momentus plans to provide space transportation using a hub-and-spoke model, hosted payload services for modular satellite systems, and in-orbit servicing (inspection, refueling, maintenance) with future reusable vehicles[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - The company also offers the M-1000 satellite bus, a modified version of the Vigoride OSV, to commercial and government customers[233](index=233&type=chunk) [Factors Affecting Our Performance](index=42&type=section&id=Factors%20Affecting%20Our%20Performance) Key factors affecting performance include R&D objectives for in-space transfer and propulsion, future Vigoride missions subject to approvals, the pursuit of reusable vehicles, cancellable customer contracts, and backlog variations not indicative of future revenues - Primary R&D objectives focus on developing in-space transfer and service vehicles and water plasma propulsion technology, with Vigoride intended for low-earth orbit transportation of small satellites[235](index=235&type=chunk)[236](index=236&type=chunk) - Future Vigoride missions are planned through the end of 2024, but are subject to licenses, government approvals, and successful spacecraft preparation[237](index=237&type=chunk)[238](index=238&type=chunk)[241](index=241&type=chunk) - The company aims for reusable vehicles by 2025, leveraging water as a propellant for cost-effectiveness and environmental benefits, but this requires significant R&D[239](index=239&type=chunk) - Customer contracts are cancellable, and revenue realization depends on timely regulatory approvals and successful mission execution, with early missions being demonstration-focused and offered at discounts[244](index=244&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - Backlog is subject to large variations and may not be indicative of future revenues due to factors like mission scheduling and customer economic viability[248](index=248&type=chunk) [Recent Developments](index=44&type=section&id=Recent%20Developments) Recent developments include September and February 2023 securities offerings raising **$5.0 million** and **$10.0 million** respectively, a **1-for-50 reverse stock split**, the appointment of a new CFO, and legal expenses related to CFIUS and SEC matters - In September 2023, Momentus sold **210,000 shares** of Class A common stock and warrants for approximately **$5.0 million** gross proceeds, and amended February Class A Warrants[249](index=249&type=chunk)[250](index=250&type=chunk) - A **1-for-50 reverse stock split** of Class A common stock became effective on August 22, 2023[252](index=252&type=chunk) - In February 2023, the company sold **187,920 shares** of Class A common stock and warrants for approximately **$10.0 million** gross proceeds, used to satisfy stock repurchase obligations[253](index=253&type=chunk) - Eric Williams was appointed permanent Chief Financial Officer and principal accounting officer on April 5, 2023[255](index=255&type=chunk) - The company incurred legal expenses of **$0.3 million** for the nine months ended September 30, 2023, related to CFIUS and SEC matters[258](index=258&type=chunk) [Components of Results of Operations](index=46&type=section&id=Components%20of%20Results%20of%20Operations) This section outlines the components of Momentus Inc.'s results of operations, including service revenue recognition, cost of revenue, R&D, SG&A expenses, and other income/expense items like warrant liability changes and interest - Service revenue is recognized upon satisfaction of performance obligations (payload delivery) or contract cancellation, or ratably over time for in-orbit services[262](index=262&type=chunk)[265](index=265&type=chunk) - Cost of revenue includes orbital service vehicle and third-party launch costs; currently, OSV costs are expensed as R&D until design is completed for production[266](index=266&type=chunk) - Research and development expenses cover activities for developing existing and future vehicle technologies, including equipment, materials, labor, and launch costs for Vigoride testing[267](index=267&type=chunk)[268](index=268&type=chunk) - Selling, general and administrative expenses include human capital, facilities, professional fees, and public company operating costs, including NSA compliance[269](index=269&type=chunk)[270](index=270&type=chunk) - Other income/expense items include changes in fair value of warrant liability, interest income/expense, and non-recurring fees[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) This section compares Momentus Inc.'s financial results, highlighting significant increases in service revenue and gross profit, alongside decreases in R&D and SG&A expenses, leading to a reduced net loss Comparison of Financial Results (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | $ Change | % Change | | :------------- | :------------------------------ | :------------------------------ | :------- | :------- | | Service revenue | $339 | $129 | $210 | 163% | | Gross profit | $220 | $115 | $105 | 91% | | R&D expenses | $5,992 | $10,571 | $(4,579) | (43%) | | SG&A expenses | $9,294 | $11,184 | $(1,890) | (17%) | | Net loss | $(15,159) | $(21,298) | $6,139 | (29%) | | (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | $ Change | % Change | | :------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Service revenue | $2,066 | $179 | $1,887 | 1054% | | Gross profit | $1,559 | $153 | $1,406 | 919% | | R&D expenses | $26,315 | $31,438 | $(5,123) | (16%) | | SG&A expenses | $29,571 | $38,898 | $(9,327) | (24%) | | Net loss | $(54,819) | $(71,004) | $16,185 | (23%) | - Service revenue for the three months ended September 30, 2023, was **$0.3 million**, primarily from Vigoride 5 hosted payload mission fulfillment[280](index=280&type=chunk) - Research and development expenses decreased by **$4.6 million (43%)** for the three months and **$5.1 million (16%)** for the nine months ended September 30, 2023, driven by reduced payroll, materials, and allocated IT/facilities costs[283](index=283&type=chunk)[295](index=295&type=chunk) - Selling, general and administrative expenses decreased by **$1.9 million (17%)** for the three months and **$9.3 million (24%)** for the nine months ended September 30, 2023, due to lower payroll, NSA/legal services, and professional fees[284](index=284&type=chunk)[285](index=285&type=chunk)[296](index=296&type=chunk) - Interest income significantly increased to **$0.2 million** (Q3 2023) and **$1.1 million** (YTD Q3 2023) due to investments in money market funds amid rising interest rates[288](index=288&type=chunk)[299](index=299&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) This section addresses Momentus Inc.'s liquidity and capital resources, emphasizing substantial doubt about its ability to continue as a going concern due to net losses, accumulated deficit, and low cash, necessitating significant additional capital raises - The company's ability to continue as a going concern is in substantial doubt due to net losses (**$54.8 million** YTD Q3 2023), accumulated deficit (**$358.9 million**), and low cash and cash equivalents (**$9.7 million**)[304](index=304&type=chunk)[305](index=305&type=chunk) - Net cash used in operating activities for the nine months ended September 30, 2023, was **$46.0 million**, primarily for headcount, R&D, and legal/professional fees[309](index=309&type=chunk) - Net cash used in financing activities was **$5.9 million** for the nine months ended September 30, 2023, driven by loan repayments and stock repurchase liability payments, partially offset by proceeds from securities offerings[313](index=313&type=chunk) - The company expects continued cash consumption and will need to raise substantial additional capital through equity or debt financings, which may not be available on favorable terms or at all[305](index=305&type=chunk)[306](index=306&type=chunk)[315](index=315&type=chunk) [Critical Accounting Policies and Estimates](index=54&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key critical accounting policies include revenue recognition, loss contingencies, deferred fulfillment and prepaid launch costs, contract liabilities, stock-based compensation, and income taxes, requiring significant judgment in estimates like fair value and valuation allowances - Key critical accounting policies include revenue recognition (point-in-time for transportation, ratably over time for in-orbit services), loss contingencies, deferred fulfillment and prepaid launch costs, contract liabilities, stock-based compensation, and income taxes[322](index=322&type=chunk)[323](index=323&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk)[335](index=335&type=chunk) - Significant judgment is required in estimating loss contingencies, fair value of stock-based payments (using Black-Scholes-Merton model), and determining valuation allowances against deferred tax assets[328](index=328&type=chunk)[333](index=333&type=chunk)[336](index=336&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Momentus Inc. faces market risks, primarily interest rate and foreign currency, but these are mitigated by short-term, low-risk investments, a fixed-rate Term Loan, and predominantly U.S. dollar transactions - The company's cash and cash equivalents (**$9.7 million** as of September 30, 2023) are primarily invested in highly liquid, short-term instruments, limiting exposure to interest rate fluctuations[342](index=342&type=chunk) - The Term Loan bears a fixed interest rate, making it unaffected by changes in market interest rates[343](index=343&type=chunk) - Foreign currency risk is not material, as a significant portion of cash receipts and expenses are in U.S. dollars[344](index=344&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated Momentus Inc.'s disclosure controls and procedures as effective at a reasonable assurance level as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - As of September 30, 2023, the company's disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level[347](index=347&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended September 30, 2023[348](index=348&type=chunk) Part II - Other Information This section provides other information, including legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, and exhibits, supplementing the financial statements [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference detailed disclosures from Note 12 regarding Momentus Inc.'s legal proceedings, including securities class actions, shareholder derivative, SAFE note, and founder litigation - Legal proceedings information is incorporated by reference from Note 12 of the financial statements[350](index=350&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) Momentus Inc. faces critical risks including limited mission success, uncertain revenue conversion from cancellable contracts, significant going concern doubts due to insufficient capital, and potential negative impacts from workforce reductions and capital pursuit - Setbacks in initial or future missions, like the Vigoride 3 anomalies, could materially harm the business, financial condition, and reputation[352](index=352&type=chunk)[353](index=353&type=chunk)[354](index=354&type=chunk) - Customer contracts are cancellable, and the company may not realize all potential revenue, especially if regulatory approvals are delayed or future missions experience significant anomalies[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern due to insufficient revenues and capital, which could adversely affect its share price, ability to raise capital, and commercial relationships[358](index=358&type=chunk)[359](index=359&type=chunk) - Workforce reductions, such as the **18-employee reduction** on July 3, 2023, may not achieve expected cost savings and could negatively impact business operations and employee morale[360](index=360&type=chunk) - Pursuing additional capital and strategic alternatives will divert management's attention and incur expenses, potentially disrupting business and impacting financial condition[361](index=361&type=chunk) - In the event of bankruptcy, the company faces risks including high costs, difficulty obtaining financing, maintaining relationships, and potential liquidation under Chapter 7, which could result in no recovery for Class A common stock holders[362](index=362&type=chunk)[363](index=363&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[364](index=364&type=chunk) [Item 3. Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[365](index=365&type=chunk) [Item 4. Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There were no mine safety disclosures to report for the period - No mine safety disclosures were reported[366](index=366&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This section reports no Rule 10b5-1 trading plan adoptions or terminations by Section 16 officers and directors, and reiterates the **1-for-50 reverse stock split** of Class A common stock effective August 22, 2023 - No Rule 10b5-1 trading plans were adopted or terminated by Section 16 officers and directors for the three months ended September 30, 2023[367](index=367&type=chunk) - A **1-for-50 reverse stock split** of Class A common stock was approved by stockholders and became effective on August 22, 2023[368](index=368&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements, certificates of amendment, forms of warrants, securities purchase agreements, and Sarbanes-Oxley Act certifications - The exhibits include various agreements and forms related to the Business Combination, securities offerings, and corporate governance[370](index=370&type=chunk)[371](index=371&type=chunk) - Certifications pursuant to Rules 13a-14(a) and 15d-14(a) and 18 U.S.C. Section 1350 are filed/furnished[370](index=370&type=chunk)[371](index=371&type=chunk) [Signatures](index=63&type=section&id=Signatures) This section contains the signatures of the principal executive and financial officers, certifying the accuracy of the report - The report was signed on November 14, 2023, by John Rood, Chief Executive Officer (Principal Executive Officer), and Eric Williams, Chief Financial Officer (Principal Financial and Accounting Officer)[376](index=376&type=chunk)