Part I - Financial Information This section presents Momentus Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, cash flows, and detailed notes [Item 1. Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents Momentus Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2023, and December 31, 2022, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes on the company's operations, significant accounting policies, and financial position [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, presenting assets, liabilities, and stockholders' equity at specific dates | ASSETS (in thousands) | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $21,298 | $61,094 | | Total current assets | $32,991 | $76,274 | | Total assets | $48,716 | $92,423 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | June 30, 2023 | December 31, 2022 | | Total current liabilities | $28,956 | $43,226 | | Total liabilities | $35,959 | $53,816 | | Total stockholders' equity | $12,757 | $38,607 | | Total liabilities and stockholders' equity | $48,716 | $92,423 | - Cash and cash equivalents decreased significantly from **$61.094 million** at December 31, 2022, to **$21.298 million** at June 30, 2023, indicating substantial cash usage[16](index=16&type=chunk) - Total stockholders' equity declined from **$38.607 million** to **$12.757 million**, reflecting ongoing net losses[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net loss | (in thousands, except per share data) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service revenue | $1,705 | $50 | $1,727 | $50 | | Cost of revenue | $388 | $12 | $388 | $12 | | Gross profit | $1,317 | $38 | $1,339 | $38 | | Research and development expenses | $10,204 | $10,896 | $20,323 | $20,867 | | Selling, general and administrative expenses | $10,007 | $12,861 | $20,277 | $27,714 | | Loss from operations | $(18,894) | $(23,719) | $(39,261) | $(48,543) | | Net loss | $(18,835) | $(22,872) | $(39,660) | $(49,706) | | Net loss per share, basic | $(0.20) | $(0.28) | $(0.43) | $(0.62) | - Service revenue increased significantly to **$1.705 million** for the three months ended June 30, 2023, from **$50 thousand** in the prior year, and to **$1.727 million** for the six months ended June 30, 2023, from **$50 thousand** in the prior year[18](index=18&type=chunk) - Net loss decreased to **$(18.835) million** for the three months ended June 30, 2023, from **$(22.872) million** in the prior year, and to **$(39.660) million** for the six months ended June 30, 2023, from **$(49.706) million** in the prior year[18](index=18&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit | (in thousands, except share data) | Balance, December 31, 2022 | Balance, June 30, 2023 | | :-------------------------------- | :------------------------- | :--------------------- | | Common stock – Class A (Shares) | 84,441,153 | 97,865,351 | | Common stock – Class A (Amount) | $1 | $1 | | Additional paid-in capital | $342,733 | $356,543 | | Accumulated deficit | $(304,127) | $(343,787) | | Total stockholders' equity | $38,607 | $12,757 | - Total stockholders' equity decreased from **$38.607 million** at December 31, 2022, to **$12.757 million** at June 30, 2023, primarily due to net losses[21](index=21&type=chunk) - Common stock shares outstanding increased from **84,441,153** to **97,865,351**, driven by issuance upon exercise of stock options, vesting of RSUs, ESPP purchases, and exercise of Pre-Funded Warrants[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company through its operating, investing, and financing activities | (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(33,228) | $(45,943) | | Net cash used in investing activities | $(15) | $(945) | | Net cash used in financing activities | $(7,018) | $(3,277) | | Decrease in cash, cash equivalents and restricted cash | $(40,261) | $(50,165) | | Cash, cash equivalents and restricted cash, end of period | $22,152 | $110,382 | - Net cash used in operating activities decreased to **$33.228 million** for the six months ended June 30, 2023, from **$45.943 million** in the prior year[25](index=25&type=chunk) - Net cash used in financing activities increased to **$7.018 million**, primarily due to loan principal repayments and stock repurchase liability payments, partially offset by proceeds from a securities offering[25](index=25&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Nature of Operations](index=12&type=section&id=Note%201.%20Nature%20of%20Operations) This note describes Momentus Inc.'s business, including its in-space infrastructure services, recent mission successes, and going concern considerations - Momentus Inc. is a U.S. commercial space company offering in-space infrastructure services, including transportation, hosted payloads, and in-orbit services, utilizing its water plasma-based propulsion system[26](index=26&type=chunk) - The company successfully launched Vigoride 5 and Vigoride 6 OSVs in January and April 2023, respectively, with Vigoride 5 testing the Microwave Electrothermal Thruster (MET) and supporting customer payloads, and Vigoride 6 changing orbital inclination for six customer payloads[28](index=28&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) - Momentus is operating two spacecraft concurrently and plans its next Vigoride mission in early 2024, subject to licenses and approvals[34](index=34&type=chunk)[35](index=35&type=chunk) - The company's financial position raises substantial doubt about its ability to continue as a going concern, with net losses of **$18.8 million** (Q2 2023) and **$39.7 million** (H1 2023), and cash and cash equivalents of **$21.3 million** as of June 30, 2023[38](index=38&type=chunk)[40](index=40&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=14&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the company's financial statements - The interim unaudited condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules, with certain disclosures condensed or omitted[44](index=44&type=chunk) - The Company is an 'emerging growth company' and has elected to take advantage of the extended transition period for new or revised financial accounting standards[49](index=49&type=chunk) - Revenue from transportation services is recognized at a point in time upon payload delivery, while in-orbit services revenue is recognized ratably over time[61](index=61&type=chunk)[62](index=62&type=chunk) - Warrant liabilities are classified as Level 3 in the fair value hierarchy and valued using the Black-Scholes Option Pricing model, with changes recognized in the statements of operations[67](index=67&type=chunk)[72](index=72&type=chunk) [Note 3. Prepaids and Other Current Assets](index=21&type=section&id=Note%203.%20Prepaids%20and%20Other%20Current%20Assets) This note details the composition and changes in the company's prepaid expenses and other current assets | Prepaid and Other Current Assets (in thousands) | June 30, 2023 | December 31, 2022 | | :------------------------------------ | :------------ | :---------------- | | Prepaid launch costs, current | $1,523 | $3,000 | | Prepaid research and development | $2,377 | $2,841 | | Prepaid insurance and other assets | $2,871 | $4,332 | | Total | $6,771 | $10,173 | - Total prepaids and other current assets decreased from **$10.173 million** at December 31, 2022, to **$6.771 million** at June 30, 2023[100](index=100&type=chunk) [Note 4. Property, Machinery and Equipment, net](index=22&type=section&id=Note%204.%20Property,%20Machinery%20and%20Equipment,%20net) This note provides information on the company's property, machinery, and equipment, including gross values, accumulated depreciation, and net book values | Property, Machinery and Equipment (in thousands) | June 30, 2023 | December 31, 2022 | | :--------------------------------------- | :------------ | :---------------- | | Property, machinery and equipment, gross | $5,752 | $5,808 | | Less: accumulated depreciation | $(2,147) | $(1,792) | | Property, machinery and equipment, net | $3,605 | $4,016 | - Net property, machinery and equipment decreased from **$4.016 million** at December 31, 2022, to **$3.605 million** at June 30, 2023[101](index=101&type=chunk) - Depreciation expense was **$0.4 million** for the six months ended June 30, 2023, down from **$0.5 million** in the prior year period[101](index=101&type=chunk) [Note 5. Intangible Assets, net](index=22&type=section&id=Note%205.%20Intangible%20Assets,%20net) This note details the company's intangible assets, primarily patents and intellectual property, including their gross and net values | Intangible Assets (in thousands) | June 30, 2023 | December 31, 2022 | | :------------------------------- | :------------ | :---------------- | | Patents/Intellectual Property (Gross Value) | $485 | $461 | | Patents/Intellectual Property (Net Value) | $335 | $337 | - Net intangible assets (patents) remained relatively stable at **$335 thousand** as of June 30, 2023, compared to **$337 thousand** at December 31, 2022[102](index=102&type=chunk) - Amortization expense for intangible assets was **$0.03 million** for the six months ended June 30, 2023, a decrease from **$0.08 million** in the prior year period[102](index=102&type=chunk) [Note 6. Leases](index=22&type=section&id=Note%206.%20Leases) This note provides information on the company's lease agreements, including lease terms and associated expenses - The Company leases office space in San Jose, California, with the lease expiring in February 2028, incurring approximately **$11 million** over the term[104](index=104&type=chunk) | Lease Expense (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $735 | $844 | | Variable lease expense | $259 | $291 | | Total lease expense | $994 | $1,135 | - Total lease expense decreased to **$994 thousand** for the six months ended June 30, 2023, from **$1.135 million** in the prior year period[106](index=106&type=chunk) [Note 7. Accrued Liabilities](index=24&type=section&id=Note%207.%20Accrued%20Liabilities) This note details the various accrued liabilities of the company, including legal, compensation, and research and development expenses | Accrued Liabilities (in thousands) | June 30, 2023 | December 31, 2022 | | :--------------------------------- | :------------ | :---------------- | | Legal and other professional services | $3,204 | $3,128 | | Compensation expense | $1,897 | $3,584 | | Research and development projects | $1,532 | $981 | | Other accrued liabilities | $152 | $333 | | Total | $6,785 | $8,026 | - Total accrued liabilities decreased from **$8.026 million** at December 31, 2022, to **$6.785 million** at June 30, 2023, primarily due to a decrease in compensation expense[108](index=108&type=chunk) [Note 8. Loan Payable](index=24&type=section&id=Note%208.%20Loan%20Payable) This note provides information on the company's term loan, including outstanding amounts, accrued interest, and future maturity schedules - The Company has a Term Loan with **$9.0 million** gross payable and **$0.2 million** accrued interest as of June 30, 2023, with future scheduled maturities of **$6.7 million** for the remainder of 2023 and **$2.3 million** for 2024[113](index=113&type=chunk) - Interest expense amortization was **$0.9 million** for the six months ended June 30, 2023, down from **$1.5 million** in the prior year period, due to the effective interest method as the loan approaches maturity[112](index=112&type=chunk) [Note 9. Stockholders' Equity](index=25&type=section&id=Note%209.%20Stockholders'%20Equity) This note details changes in stockholders' equity, including common stock issuances, warrant activity, and capital raising efforts - In February 2023, the Company issued **9,396,000** shares of Class A common stock, pre-funded warrants for **2,170,043** shares, and warrants for **11,566,043** shares, raising approximately **$10.0 million** gross proceeds[115](index=115&type=chunk)[117](index=117&type=chunk) - The **$10.0 million** proceeds were used to satisfy a stock repurchase obligation to Co-Founders, triggered by cumulative capital raising exceeding **$250 million**[121](index=121&type=chunk)[122](index=122&type=chunk) - As of June 30, 2023, the Company had public and private warrants outstanding to purchase **8,625,000** and **11,272,500** shares, respectively, related to the Business Combination, plus **11,566,043** additional warrants from the February 2023 offering[123](index=123&type=chunk)[124](index=124&type=chunk) [Note 10. Stock-based Compensation](index=27&type=section&id=Note%2010.%20Stock-based%20Compensation) This note provides information on the company's stock-based compensation plans, including shares available for issuance and related expenses - The 2021 Equity Incentive Plan's evergreen provision increased shares available for issuance by **2,533,234** during the six months ended June 30, 2023[132](index=132&type=chunk) - Total stock-based compensation expense for the six months ended June 30, 2023, was **$4.297 million**, a decrease from **$5.247 million** in the prior year period[142](index=142&type=chunk) - As of June 30, 2023, unrecognized compensation cost for unvested RSUs was **$21.1 million**, expected to be recognized over a weighted-average period of **1.7 years**[141](index=141&type=chunk) [Note 11. Diluted Earnings Per Share](index=31&type=section&id=Note%2011.%20Diluted%20Earnings%20Per%20Share) This note explains the calculation of diluted earnings per share and the exclusion of anti-dilutive securities due to net losses - Due to net losses, all potential common shares (options, unvested stock units, warrants, and contingent Sponsor Earnout Shares) were excluded from diluted loss per share calculation as their effect would be anti-dilutive[148](index=148&type=chunk) | Potential Common Shares Excluded | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :------------------------------- | :------------------------------- | :----------------------------- | | Options and unvested stock units outstanding | 14,552,254 | 7,397,561 | | Warrants outstanding | 31,463,543 | 31,463,543 | | Contingent Sponsor Earnout Shares | 1,437,500 | 1,437,500 | | Total | 47,453,297 | 40,298,604 | [Note 12. Commitments and Contingencies](index=31&type=section&id=Note%2012.%20Commitments%20and%20Contingencies) This note outlines the company's future purchase obligations, legal proceedings, and other contingent liabilities - The Company's future unconditional purchase obligations total **$16.292 million**, with **$15.752 million** due in the remainder of 2023 and **$540 thousand** in 2024[149](index=149&type=chunk) - An agreement in principle was reached to settle the Securities Class Actions for **$8.5 million**, with **$4.0 million** expected from insurance proceeds, resulting in a net **$4.5 million** litigation settlement contingency recorded[151](index=151&type=chunk)[152](index=152&type=chunk) - The Company continues to face multiple shareholder derivative actions and founder litigation, disputing allegations and vigorously defending against claims for indemnification and advancement of expenses[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - Legal expenses related to CFIUS and SEC matters were **$0.3 million** for the six months ended June 30, 2023, down from **$1.3 million** in the prior year period[157](index=157&type=chunk) [Note 13. Income Taxes](index=35&type=section&id=Note%2013.%20Income%20Taxes) This note explains the company's income tax position, including its effective tax rate and the reasons for a full valuation allowance on deferred tax assets - The Company's effective tax rate for the three and six months ended June 30, 2023 and 2022, was **zero percent**[176](index=176&type=chunk) - The zero effective tax rate is primarily due to certain nondeductible items, state and local income taxes, absence of current income tax, and a full valuation allowance for deferred tax assets[176](index=176&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Momentus Inc.'s financial condition and results of operations, highlighting its services, technology, mission successes, and financial challenges [Overview](index=36&type=section&id=Overview) This section introduces Momentus's in-space infrastructure services, technology, and contract backlog, along with recent mission achievements - Momentus offers in-space infrastructure services, including 'last mile' satellite transportation, payload-hosting, and future in-orbit services, targeting satellite operators and U.S. Government missions[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - The company has signed contracts for approximately **$32 million** in backlog as of July 31, 2023, spanning 18 companies in 14 countries, though customers can cancel contracts by forfeiting deposits[182](index=182&type=chunk) - Momentus successfully completed initial on-orbit tests of its Microwave Electrothermal Thruster (MET) on the Vigoride 5 mission, demonstrating orbital velocity and altitude adjustments using water plasma propulsion[188](index=188&type=chunk)[189](index=189&type=chunk) [Services Overview](index=38&type=section&id=Services%20Overview) This section describes Momentus's planned service offerings, including space transportation, hosted payloads, and future in-orbit servicing capabilities - Momentus plans to provide space transportation via a 'hub-and-spoke' model, hosted payload services with modular satellite systems, and future in-orbit servicing capabilities like inspection, refueling, and de-orbiting[194](index=194&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - The company is also offering a modified Vigoride OSV as a satellite bus for commercial and government customers[199](index=199&type=chunk) [Factors Affecting Our Performance](index=38&type=section&id=Factors%20Affecting%20Our%20Performance) This section discusses key factors influencing the company's performance, including technology development, mission success, and backlog conversion - Momentus' performance depends on the successful development and commercialization of its in-space transfer and service vehicles, particularly the water plasma propulsion technology (MET)[201](index=201&type=chunk)[193](index=193&type=chunk) - The company plans its next Vigoride test mission in early 2024 and has secured launch service agreements with SpaceX through the end of 2024, but all missions are subject to licenses and government approvals[203](index=203&type=chunk)[204](index=204&type=chunk)[207](index=207&type=chunk) - Backlog decreased from **$86 million** (March 2021) to **$32 million** (July 2023) due to customer cancellations from mission delays, with **89%** of current backlog concentrated among three providers[213](index=213&type=chunk)[214](index=214&type=chunk)[319](index=319&type=chunk) [Recent Developments](index=40&type=section&id=Recent%20Developments) This section highlights recent corporate events, including a securities offering, executive appointments, and ongoing legal expenses - In February 2023, Momentus completed a securities offering, raising approximately **$10.0 million** gross proceeds, which were used to satisfy stock repurchase obligations to Co-Founders[217](index=217&type=chunk) - Eric Williams was appointed as the permanent Chief Financial Officer and principal accounting officer in April 2023[219](index=219&type=chunk) - The company continues to incur significant legal expenses related to CFIUS compliance and the NSA, with **$0.3 million** incurred for the six months ended June 30, 2023[222](index=222&type=chunk) [Components of Results of Operations](index=42&type=section&id=Components%20of%20Results%20of%20Operations) This section explains the key components of the company's financial results, including revenue recognition, cost of revenue, and research and development expenses - Service revenue is recognized upon satisfaction of performance obligations (payload delivery) or contract cancellation, or ratably over time for in-orbit services[227](index=227&type=chunk) - Cost of revenue primarily includes orbital service vehicle and third-party launch costs, with current vehicle design costs expensed as R&D until design is finalized for production[231](index=231&type=chunk) - Research and development expenses cover activities for developing existing and future vehicle technologies, including equipment, materials, labor, and launch costs for Vigoride vehicle testing[232](index=232&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) This section presents a comparative analysis of the company's financial performance for the three and six months ended June 30, 2023 and 2022 Comparison of Financial Results (Three Months Ended June 30) | (in thousands) | 2023 | 2022 | $ Change | % Change | | :------------- | :-------- | :-------- | :-------- | :------- | | Service revenue | $1,705 | $50 | $1,655 | 3310 % | | Gross profit | $1,317 | $38 | $1,279 | 3366 % | | R&D expenses | $10,204 | $10,896 | $(692) | (6 %) | | SG&A expenses | $10,007 | $12,861 | $(2,854) | (22 %) | | Net loss | $(18,835) | $(22,872) | $4,037 | (18 %) | Comparison of Financial Results (Six Months Ended June 30) | (in thousands) | 2023 | 2022 | $ Change | % Change | | :------------- | :-------- | :-------- | :-------- | :------- | | Service revenue | $1,727 | $50 | $1,677 | 3354 % | | Gross profit | $1,339 | $38 | $1,301 | 3424 % | | R&D expenses | $20,323 | $20,867 | $(544) | (3 %) | | SG&A expenses | $20,277 | $27,714 | $(7,437) | (27 %) | | Net loss | $(39,660) | $(49,706) | $10,046 | (20 %) | - Service revenue for both three and six months ended June 30, 2023, was primarily driven by Vigoride 5 and Vigoride 6 missions and customer deposit forfeitures[244](index=244&type=chunk)[255](index=255&type=chunk) - Selling, general and administrative expenses decreased by **$2.854 million** (22%) for the three months and **$7.437 million** (27%) for the six months ended June 30, 2023, primarily due to reduced NSA/legal spending, executive turnover, and lower IT/corporate costs[248](index=248&type=chunk)[258](index=258&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, cash flow activities, and its ability to meet short-term and long-term financial obligations - The Company's ability to continue as a going concern is in substantial doubt due to insufficient revenues, net losses of **$39.7 million** (H1 2023), and cash and cash equivalents of **$21.3 million** as of June 30, 2023[265](index=265&type=chunk)[266](index=266&type=chunk) - Net cash used in operating activities was **$33.2 million** for the six months ended June 30, 2023, primarily for headcount, R&D, and legal/professional fees[270](index=270&type=chunk) - Net cash used in financing activities was **$7.0 million**, driven by **$6.3 million** in loan repayments and **$10.0 million** for stock repurchase liability, partially offset by **$10.0 million** from a securities offering[273](index=273&type=chunk) [Critical Accounting Policies and Estimates](index=48&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies the accounting policies and estimates that require significant judgment and can materially impact the company's financial reporting - Key accounting policies include revenue recognition (point-in-time for transportation, ratable for in-orbit services), loss contingencies, deferred fulfillment and prepaid launch costs, contract liabilities, stock-based compensation, and income taxes[283](index=283&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[295](index=295&type=chunk) - Significant judgment is required for estimates such as fair value of stock-based payments (using Black-Scholes-Merton model) and valuation allowances against deferred tax assets[294](index=294&type=chunk)[296](index=296&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Momentus Inc.'s exposure to market risks, specifically interest rate risk and foreign currency risk, and concludes that these risks do not currently have a material impact on the company's financial position - The Company is exposed to market risks including changes in interest rates and inflation, but an immediate **10%** change in interest rates would not materially affect the fair value of its cash and cash equivalents due to their short-term maturities[301](index=301&type=chunk)[302](index=302&type=chunk) - The Term Loan indebtedness bears a fixed interest rate, making it unaffected by changes in interest rates[303](index=303&type=chunk) - There were no material foreign currency transactions for the three and six months ended June 30, 2023 and 2022, as a significant portion of cash receipts and expenses are in U.S. dollars[304](index=304&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of Momentus Inc.'s disclosure controls and procedures, concluding their effectiveness as of June 30, 2023, and reporting no material changes in internal control over financial reporting during the quarter - Management, with CEO and CFO participation, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2023, and concluded they were effective at a reasonable assurance level[307](index=307&type=chunk) - No changes in internal control over financial reporting were identified during the fiscal quarter ended June 30, 2023, that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting[308](index=308&type=chunk) Part II - Other Information This section provides additional disclosures beyond financial statements, covering legal proceedings, risk factors, equity sales, and other corporate matters [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed disclosures on legal proceedings provided in Note 12 of the condensed consolidated financial statements, which include information on securities class actions, CFIUS review, shareholder derivative litigation, SAFE note litigation, and founder litigation - Legal proceedings information is incorporated by reference from Note 12 of the condensed consolidated financial statements[310](index=310&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors from the Annual Report on Form 10-K, emphasizing the risks associated with the company's limited history of satellite delivery, potential for mission setbacks, inability to convert backlog into revenue, and substantial doubt about its ability to continue as a going concern - The company has a limited history of delivering customer satellites, and setbacks in initial or future missions could materially harm its business and reputation[312](index=312&type=chunk)[315](index=315&type=chunk) - Backlog of **$32 million** (as of July 31, 2023) is subject to cancellation by customers, and delays have already caused significant erosion from **$86 million** (March 2021)[317](index=317&type=chunk)[319](index=319&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern, which could adversely affect its share price, ability to raise capital, and relationships with stakeholders[320](index=320&type=chunk)[321](index=321&type=chunk) - A workforce reduction in July 2023 (**18 employees**) was implemented to increase cash runway, with potential for further reductions if additional capital is not secured[322](index=322&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that 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[325](index=325&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[326](index=326&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section confirms that there are no mine safety disclosures to report - No mine safety disclosures were reported[327](index=327&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section provides other relevant information, including the absence of Rule 10b5-1 trading plan adoptions or terminations by Section 16 officers and directors, and the authorization of letter agreements for accelerated equity award vesting upon a Change in Control to enhance employee retention - No adoption or termination of Rule 10b5-1 trading plans by Section 16 officers and directors occurred during the three months ended June 30, 2023[328](index=328&type=chunk) - The Compensation Committee authorized letter agreements for active, full-time employees to provide accelerated vesting of outstanding equity awards upon a Change in Control, aimed at enhancing employee retention[329](index=329&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements, amendments to equity plans, certifications, and XBRL related documents - The exhibits include various merger agreements, amendments to the 2022 Inducement Equity Plan, a Form of Change in Control Letter Agreement, and certifications pursuant to the Sarbanes-Oxley Act[331](index=331&type=chunk) - XBRL (eXtensible Business Reporting Language) documents are also included as exhibits for interactive data filing[331](index=331&type=chunk) [Signatures](index=52&type=section&id=Signatures) This section contains the required signatures for the Form 10-Q, confirming its submission by Momentus Inc.'s Chief Executive Officer and Chief Financial Officer - The report is signed by John Rood, Chief Executive Officer, and Eric Williams, Chief Financial Officer, on August 14, 2023[336](index=336&type=chunk)

Financial Performance - Total current assets decreased from $76,274,000 as of December 31, 2022, to $53,033,000 as of March 31, 2023, representing a decline of approximately 30.5%[16] - Service revenue for the three months ended March 31, 2023, was $22,000, compared to $0 for the same period in 2022, indicating the company has begun generating revenue[18] - Total operating expenses decreased from $24,824,000 in Q1 2022 to $20,389,000 in Q1 2023, a reduction of approximately 17.5%[18] - Net loss for the three months ended March 31, 2023, was $20,825,000, compared to a net loss of $26,834,000 for the same period in 2022, reflecting an improvement of about 22.5%[18] - Cash and cash equivalents decreased from $61,094,000 as of December 31, 2022, to $38,630,000 as of March 31, 2023, a decline of approximately 36.7%[16] - The company reported a gross profit of $22,000 for Q1 2023, marking its first recorded gross profit[18] - The accumulated deficit increased from $(304,127,000) as of December 31, 2022, to $(324,952,000) as of March 31, 2023, indicating a worsening of the company's financial position[19] - The company used net cash of $18.7 million in operating activities for the three months ended March 31, 2023, compared to $23.1 million in the same period of 2022, indicating a 19.5% decrease in cash used[23] Assets and Liabilities - The total liabilities decreased from $53,816,000 as of December 31, 2022, to $39,896,000 as of March 31, 2023, a reduction of approximately 26%[16] - Cash and cash equivalents at the end of the period were $39.9 million, down from $136.0 million at the end of the same period in 2022, reflecting a decrease of 70.7%[23] - As of March 31, 2023, the company had $6.9 million in deferred fulfillment and prepaid launch costs recorded within current and non-current assets[52] - The net value of property, machinery, and equipment as of March 31, 2023, was $3.844 million, down from $4.016 million as of December 31, 2022[96] - The total accrued expenses as of March 31, 2023, were $6.496 million, a decrease from $8.026 million as of December 31, 2022[102] - As of March 31, 2023, the Company's total loan payable was $12.2 million, with future scheduled maturities of $9.9 million and $2.3 million for 2023 and 2024, respectively[107] Revenue Recognition and Backlog - The company recognizes revenue at a point in time upon satisfaction of performance obligations, primarily in the aerospace industry[58] - As of March 31, 2023, the company has a backlog of approximately $33 million in signed contracts, spanning 19 companies across 13 countries[174] - The company has signed contracts for approximately $33 million in backlog, spanning across 19 companies in 13 countries[205] - Approximately 86% of the total dollar value of the backlog is related to three launch services providers and their affiliates[206] - Backlog is subject to large variations and may not be indicative of future revenues, with contracts potentially scheduled for many years in the future[207] - The economic viability of customers in the backlog is not guaranteed, which may affect actual revenue realization[207] - Timing of revenue receipt from backlog projects could change due to various factors affecting scheduling[207] - Failure to realize backlog could adversely impact revenues and gross margins[207] Operational Developments - The company successfully completed initial tests of the Microwave Electrothermal Thruster (MET) during the Vigoride 5 mission, which is designed to use solar power and distilled water as propellant[27] - The Vigoride 6 mission, launched on April 15, 2023, is providing orbital delivery services for six customer payloads, including two satellites for the NASA LLITED mission[30] - Momentus plans to conduct one additional mission with its Vigoride OSV during 2023, subject to necessary licenses and government approvals[32] - The company is focused on developing a hub-and-spoke transportation network in partnership with leading launch service providers, aiming to reduce costs for satellite operators[173] - The company anticipates considerable growth in the space transportation segment, driven by demand for small satellite transportation to low-earth orbit[176] - The company offers a range of services including satellite transportation, payload-hosting, and on-orbit satellite maintenance[172] - The company is developing a modular approach to satellite systems through a subscription-based hosted payload service[189] - The Tape Spring Solar Array (TASSA) technology is being demonstrated on the Vigoride 6 mission, aimed at reducing vehicle production costs[184] - The company aims to develop reusable vehicles by 2025, which will allow for lower manufacturing and launch costs[197] - The company anticipates growing demand for in-orbit servicing as the number of satellites in space increases[201] Legal and Regulatory Matters - The company has faced multiple shareholder derivative actions alleging misrepresentations and breaches of fiduciary duty, which it intends to vigorously defend[155][161] - The company disputes claims made by TLLT regarding a $4 million investment and seeks to defend against allegations of fraudulent inducement and breach of contract[156] - The company has maintained that releases signed by former co-founders regarding claims against it are effective, despite ongoing disputes[159] - The company is subject to various litigation matters that may divert management's attention and incur significant costs, but it believes these will not have a material adverse effect on its business[165][166] - The company recorded a litigation settlement contingency of $8.5 million related to the Securities Class Actions, with $4.0 million expected to be funded by insurance proceeds[144] Stock and Financing Activities - The Company raised approximately $10.0 million in gross proceeds from a Securities Purchase Agreement on February 23, 2023, selling 9,396,000 shares of Class A common stock at $0.8646 per share[111] - The Company allocated approximately $1.0 million and $4.0 million from the Offering to the fair value of Pre-Funded Warrants and Class A Warrants, respectively[112][113] - The Company paid $10.0 million to Co-Founders as part of stock repurchase agreements triggered by capital raising activities, including the Registered Direct Offering[116] - The company issued 135,000 shares of common stock to a consulting firm for public relations services, valued at $0.1 million, to be recorded as consulting expense over six months[137] - The total stock-based compensation for the three months ended March 31, 2023, was $1.72 million, a decrease of 22.2% from $2.21 million in the same period of 2022[134] - The company granted 7,989,137 Restricted Stock Units (RSUs) during the three months ended March 31, 2023, with a weighted average grant date fair value of $0.60[133] - As of March 31, 2023, there was a total of $23.3 million in unrecognized compensation cost related to unvested RSUs, expected to be recognized over a weighted-average period of 1.9 years[133] Future Financial Outlook - The company expects to remain an emerging growth company until certain financial thresholds are met, including a market value of common stock exceeding $700 million or total annual gross revenue of $1.07 billion[47] - The company is classified as an "emerging growth company" and has elected to take advantage of the extended transition period for new or revised financial accounting standards[47] - The company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks[73] - The company aims to reduce operating expenses and drive revenue growth as part of its strategic business plan to address its going concern status[39]

Momentus Inc. (NASDAQ:MNTS) Q4 2022 Earnings Conference Call March 7, 2023 5:00 PM ET Company Participants Darryl Genovesi - Vice President of Investor Relations John Rood - Chief Executive Officer Dennis Mahoney - Interim Chief Financial Officer Conference Call Participants Erik Rasmussen - Stifel Financial Corp. Josh Corn - Barclays Edison Yu - Deutsche Bank James Ratcliffe - Evercore Inc. Operator Ladies and gentlemen, thank you for standing by. Welcome to the Momentus, Inc. Fourth Quarter 2022 Earnings ...

PART I [Business Overview](index=7&type=section&id=Item%201.%20Business) Momentus Inc. provides 'last mile' satellite transportation and in-orbit services using Vigoride OSVs with water plasma propulsion, holding **$33 million** in backlog and conducting test missions - Momentus Inc. offers 'last mile' satellite transportation, payload-hosting, on-orbit satellite refueling, inspection, maintenance, de-orbiting, and debris removal services[29](index=29&type=chunk) - The company's primary vehicle, Vigoride, is designed for fast, versatile, and cost-effective 'last mile' transportation and infrastructure services in LEO[31](index=31&type=chunk) - Momentus has signed contracts for approximately **$33 million** in backlog as of February 28, 2023, with 18 companies across 12 countries[32](index=32&type=chunk)[77](index=77&type=chunk) - The company's water plasma propulsion technology offers a competitive advantage through its balance of fuel efficiency and thrust, utilizing water as a safer and more efficient propellant[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - Momentus conducted its inaugural Vigoride test mission in 2022, began its second in January 2023, and plans two more in 2023, pending approvals[31](index=31&type=chunk)[48](index=48&type=chunk) - Competitive advantages include standardized modular vehicles, unique patent-pending water plasma propulsion, a mission-driven strategy, launch provider compatibility, strong relationships with providers like SpaceX, and an experienced team[78](index=78&type=chunk) - Momentus is subject to regulations from the FCC, NOAA, FAA, and stringent U.S. export and import control laws (ITAR, EAR)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The company entered a National Security Agreement (NSA) in June 2021, requiring divestment of foreign-controlled interests and imposing compliance measures and costs to protect national security[90](index=90&type=chunk)[91](index=91&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) Momentus faces significant risks including capital needs, technology development challenges, intense competition, regulatory hurdles from the NSA and export controls, and ongoing litigation - The company has a limited history of delivering customer satellites and experienced anomalies in initial missions, potentially harming its reputation and financial condition[96](index=96&type=chunk)[97](index=97&type=chunk)[102](index=102&type=chunk) - Momentus requires substantial additional funding for its long-term business plan, with current cash and cash equivalents of **$61.1 million** as of December 31, 2022, expected to last at least 12 months[111](index=111&type=chunk)[414](index=414&type=chunk) - Successful development and validation of satellite vehicles and water plasma propulsion technology are crucial, facing many uncertainties and potential delays[117](index=117&type=chunk)[103](index=103&type=chunk) - Failure to obtain timely governmental licenses and approvals (FCC, FAA, NOAA) could materially adversely affect financial condition and backlog[105](index=105&type=chunk)[108](index=108&type=chunk) - Momentus operates in highly competitive industries with larger competitors, facing risks of price reduction and slower market growth for in-space infrastructure services[120](index=120&type=chunk)[126](index=126&type=chunk) - The company's **$33 million** backlog (as of Feb 28, 2023) is subject to customer cancellations and may not convert into expected revenue, posing significant customer concentration risk[127](index=127&type=chunk)[129](index=129&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) - Compliance with the National Security Agreement (NSA) incurs significant costs and restrictions, with potential monetary penalties of **$100,000 per day** (up to **$1,000,000 per breach**) for non-compliance[185](index=185&type=chunk)[186](index=186&type=chunk) - The NSA-appointed Security Director has substantial authority over business decisions, including blocking or terminating contracts, which could materially affect operations[191](index=191&type=chunk)[192](index=192&type=chunk) - Momentus is subject to stringent U.S. export and import control laws (ITAR, EAR), with past self-reported violations and ongoing risks of penalties or operational restrictions[232](index=232&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) - The company is involved in substantial litigation, including securities class actions and shareholder derivative actions, potentially resulting in significant legal expenses and liabilities[218](index=218&type=chunk)[219](index=219&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)[227](index=227&type=chunk) [Unresolved Staff Comments](index=48&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments to report - No unresolved staff comments[283](index=283&type=chunk) [Properties](index=48&type=section&id=Item%202.%20Properties) Momentus leases an approximately 65,000-square-foot facility in San Jose, California, which serves as its headquarters, propulsion laboratory, and Vigoride assembly and test center, with the lease expiring in February 2028 - Momentus' primary facility is a **65,000-square-foot** leased space in San Jose, California[93](index=93&type=chunk)[284](index=284&type=chunk) - The facility serves as the company's headquarters, propulsion laboratory, and Vigoride assembly and test center[93](index=93&type=chunk) - The lease for the primary facility expires in February 2028[284](index=284&type=chunk) [Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to various claims and lawsuits in the ordinary course of business, but currently does not consider any pending proceedings to be material to its business or likely to have a material adverse effect on future operating results, financial condition, or cash flows - Momentus is subject to various claims, lawsuits, and other legal and administrative proceedings in the ordinary course of business[286](index=286&type=chunk) - The company does not currently consider any pending claims, lawsuits, or proceedings to be material to its business or likely to have a material adverse effect on future operating results, financial condition, or cash flows[286](index=286&type=chunk) - Further disclosures related to legal proceedings are incorporated by reference from Note 14 to the Consolidated Financial Statements[287](index=287&type=chunk) [Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures to report - No mine safety disclosures are applicable[288](index=288&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=50&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Momentus Inc.'s Class A common stock (MNTS) and warrants (MNTSW) began trading on Nasdaq on August 13, 2021, with **39 holders** of record and no plans for cash dividends - Momentus Inc.'s Class A common stock (MNTS) and public warrants (MNTSW) began trading on the Nasdaq Global Market on August 13, 2021[290](index=290&type=chunk) - As of February 28, 2023, there were **39 holders** of record for the company's common stock[291](index=291&type=chunk) Equity Compensation Plan Summary (as of December 31, 2022) | Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 7,509,540 | $1.21 | 3,783,559 | | Equity compensation plans not approved by security holders | 2,828,110 | N/A | 1,083,552 | | **Total** | **10,337,650** | | **4,867,111** | - The company has no current plans to pay cash dividends on its common stock[292](index=292&type=chunk) - No issuer purchases of equity securities were made during the three months ended December 31, 2022[293](index=293&type=chunk) [[Reserved]](index=51&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and not applicable to the report - This item is not applicable[295](index=295&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%207.%20Momentus%27%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition) This section discusses Momentus' financial condition, operational results, Vigoride development, and water plasma propulsion, detailing mission impacts, backlog, liquidity, and critical accounting policies - Momentus offers 'last mile' satellite transportation, payload-hosting, on-orbit satellite refueling, inspection, maintenance, de-orbiting, and debris removal services[299](index=299&type=chunk) - The company's Vigoride 3 mission in May 2022 experienced anomalies but deployed seven of nine customer satellites; Vigoride 5, launched in January 2023, is in good health and commissioning[304](index=304&type=chunk)[305](index=305&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk) - As of February 28, 2023, Momentus has **$33 million** in cancellable backlog from 18 companies in 12 countries, with revenue realization subject to risks[301](index=301&type=chunk)[335](index=335&type=chunk) - The company's water plasma propulsion technology is still in development and has not yet experimentally confirmed its ability to generate thrust in space, crucial for commercial viability[314](index=314&type=chunk) - Momentus aims to develop reusable vehicles by mid-decade, leveraging water as a safe and efficient propellant to lower costs and environmental impact[325](index=325&type=chunk) - The company incurred operating losses of **$91.3 million** in 2022 and **$99.8 million** in 2021, expecting increased operating expenses with scaling operations and R&D investment[109](index=109&type=chunk)[398](index=398&type=chunk) Consolidated Statements of Operations (Years Ended December 31, 2022 and 2021) | (in thousands) | 2022 | 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Service revenue | $299 | $330 | $(31) | (9%) | | Cost of (reversal of) revenue | $26 | $(135) | $161 | (119%) | | Gross profit | $273 | $465 | $(192) | (41%) | | Research and development expenses | $41,721 | $51,321 | $(9,600) | (19%) | | Selling, general and administrative expenses | $49,827 | $48,905 | $922 | 2% | | Operating loss | $(91,275) | $(99,761) | $8,486 | (9%) | | Decrease in fair value of SAFE notes | $— | $209,291 | $(209,291) | (100%) | | Decrease in fair value of warrants | $5,185 | $37,330 | $(32,145) | (86%) | | Realized loss on disposal of asset | $(168) | $(17) | $(151) | N/A | | Interest income | $522 | $2 | $520 | N/A | | Interest expense | $(5,262) | $(14,229) | $8,967 | (63%) | | SEC settlement | $— | $(7,000) | $7,000 | (100%) | | Litigation settlement, net | $(4,500) | $— | $(4,500) | N/A | | Other income (expense) | $54 | $(4,960) | $5,014 | (101%) | | (Loss) income before income taxes | $(95,444) | $120,656 | $(216,100) | (179%) | | Income tax expense | $— | $2 | $(2) | (100%) | | Net (loss) income | $(95,444) | $120,654 | $(216,098) | (179%) | - Net cash used in operating activities was **$87.9 million** in 2022, primarily due to headcount, R&D, professional fees, and legal expenses[416](index=416&type=chunk) - The company's cash and cash equivalents were **$61.1 million** as of December 31, 2022, anticipated to support operations for at least 12 months[414](index=414&type=chunk) - Momentus completed a Registered Direct Offering on February 27, 2023, raising **$10.0 million**, which triggered a **$10.0 million** liability under co-founder stock repurchase agreements[345](index=345&type=chunk)[360](index=360&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=70&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures) Momentus is exposed to market risks, including interest rate risk and foreign currency risk, though an immediate **10%** change in interest rates would not materially affect cash and cash equivalents due to their short-term, low-risk profile - The company's market risk exposure primarily stems from interest rates and foreign currency fluctuations[464](index=464&type=chunk) - An immediate **10%** change in interest rates would not materially affect the fair market value of cash and cash equivalents due to their short-term, low-risk profile[466](index=466&type=chunk) - The Term Loan bears interest at a fixed rate, making it unaffected by changes in interest rates[467](index=467&type=chunk) - Foreign currency transactions were not material for 2022 and 2021, as most cash receipts and expenses are in U.S. dollars[468](index=468&type=chunk) [Financial Statements and Supplementary Data](index=72&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Momentus Inc.'s audited consolidated financial statements for 2022 and 2021, including balance sheets, statements of operations, equity, and cash flows, with comprehensive notes on accounting policies and financial items - The consolidated financial statements include the Balance Sheets, Statements of Operations, Statements of Stockholders' Equity (Deficit), and Statements of Cash Flows for the periods ended December 31, 2022 and 2021[473](index=473&type=chunk) Consolidated Balance Sheets (as of December 31, 2022 and 2021) | (in thousands) | December 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $61,094 | $160,036 | | Total current assets | $76,274 | $169,664 | | Total assets | $92,423 | $185,825 | | Total current liabilities | $43,226 | $38,867 | | Total non-current liabilities | $10,590 | $15,070 | | Total liabilities | $53,816 | $53,937 | | Total shareholders' equity | $38,607 | $131,888 | Consolidated Statements of Operations (Years Ended December 31, 2022 and 2021) | (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Service revenue | $299 | $330 | | Cost of (reversal of) revenue | $26 | $(135) | | Gross profit | $273 | $465 | | Research and development expenses | $41,721 | $51,321 | | Selling, general and administrative expenses | $49,827 | $48,905 | | Loss from operations | $(91,275) | $(99,761) | | Net (loss) income | $(95,444) | $120,654 | | Net (loss) income per share, basic | $(1.17) | $1.85 | | Net (loss) income per share, fully diluted | $(1.17) | $1.70 | Consolidated Statements of Cash Flows (Years Ended December 31, 2022 and 2021) | (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(87,887) | $(86,712) | | Net cash used in investing activities | $(733) | $(3,090) | | Net cash (used in) provided by financing activities | $(9,514) | $226,829 | | (Decrease) Increase in cash, cash equivalents and restricted cash | $(98,134) | $137,027 | - The company's financial statements are prepared in accordance with U.S. GAAP and reflect a reverse recapitalization from the August 2021 Business Combination[501](index=501&type=chunk)[507](index=507&type=chunk) - Momentus is an 'emerging growth company' and has elected to take advantage of the extended transition period for new or revised financial accounting standards[519](index=519&type=chunk) - As of December 31, 2022, the company had federal and state net operating loss (NOL) carryforwards of **$78.7 million** and **$6.5 million**, respectively, with a full valuation allowance recorded against deferred tax assets[718](index=718&type=chunk)[719](index=719&type=chunk) - Subsequent events include a February 2023 agreement to settle securities class actions for **$8.5 million** (partially insured) and a **$10.0 million** Registered Direct Securities Sale triggering a **$10.0 million** co-founder stock repurchase liability[730](index=730&type=chunk)[731](index=731&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=110&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure matters - There are no changes in and disagreements with accountants on accounting and financial disclosure[733](index=733&type=chunk) [Controls and Procedures](index=110&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of December 31, 2022, with no material changes in internal control over financial reporting during the quarter, and no attestation report due to transition period - Management concluded that disclosure controls and procedures were effective as of December 31, 2022[735](index=735&type=chunk) - The annual report does not include a management's assessment or attestation report on internal control over financial reporting due to a transition period for newly public companies[736](index=736&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended December 31, 2022[737](index=737&type=chunk) [Other Information](index=111&type=section&id=Item%209B.%20Other%20Information) The company has no other information to disclose under this item - No other information is reported[738](index=738&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=111&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - This item is not applicable[739](index=739&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=110&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance, including guidelines, committee charters, and code of conduct, is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information on directors, executive officers, and corporate governance is available on the company's website and will be set forth in the 2023 Proxy Statement[740](index=740&type=chunk) [Executive Compensation](index=110&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information on executive compensation will be set forth in the 2023 Proxy Statement[741](index=741&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=111&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, as well as related stockholder matters, is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information on security ownership of certain beneficial owners and management and related stockholder matters will be set forth in the 2023 Proxy Statement[742](index=742&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=111&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions) Information concerning certain relationships, related party transactions, and director independence is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information on certain relationships and related party transactions, and director independence will be set forth in the 2023 Proxy Statement[743](index=743&type=chunk) [Principal Accountant Fees and Services](index=111&type=section&id=Item%2014.%20Principal%20Accounting%20Fees) Information regarding principal accountant fees and services is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information on principal accountant fees and services will be set forth in the 2023 Proxy Statement[744](index=744&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=111&type=section&id=Item%2015.%20Exhibits) This section provides a comprehensive list of exhibits and financial statement schedules filed as part of the Annual Report on Form 10-K, including various agreements, corporate documents, equity plans, and certifications - The section lists various exhibits, including sales agreements, merger agreements, corporate charters and bylaws, warrant agreements, equity incentive plans, employment agreements, the National Security Agreement, and certifications[745](index=745&type=chunk)[746](index=746&type=chunk)[747](index=747&type=chunk) [Form 10-K Summary](index=114&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the report - This item is not applicable[748](index=748&type=chunk) SIGNATURES [Signatures](index=115&type=section&id=Signature) The Annual Report on Form 10-K is duly signed on March 7, 2023, by the Chief Executive Officer, John C. Rood, and the Interim Chief Financial Officer, Dennis Mahoney, along with other directors, pursuant to the requirements of the Securities Exchange Act of 1934 - The report is signed by John C. Rood, Chief Executive Officer, and Dennis Mahoney, Interim Chief Financial Officer, on March 7, 2023[751](index=751&type=chunk)[755](index=755&type=chunk) - Additional directors also signed the report on March 7, 2023[755](index=755&type=chunk)

Financial Data and Key Metrics Changes - Momentus reported a cumulative backlog of approximately $43 million as of October 31, 2022, spanning 19 companies in 14 different countries, reflecting ongoing progress and investments [65] - The total backlog declined by $12 million from $55 million reported in Q2, primarily due to the expiration of options [67] - The company ended Q3 with non-restricted cash and cash equivalents of $82 million, expected to last through the end of 2023 [68] - Revenue recognized during Q3 was $129,000, with gross profits of $115,000, primarily related to the deployment of customer satellites [70] - Operating losses for Q3 were approximately $22 million, with adjusted EBITDA at a negative $16 million, showing a $2 million improvement sequentially from Q2 [71] Business Line Data and Key Metrics Changes - The Vigoride 3 mission has deployed a total of seven out of nine customer satellites, with five additional satellites deployed during Q3 [18][19] - The upcoming Vigoride 5 mission is expected to demonstrate improved capabilities and reliability compared to Vigoride 3, with significant upgrades in design and technology [23][26] Market Data and Key Metrics Changes - The FCC's new rule requiring satellite operators to deorbit satellites within five years post-mission is anticipated to create a multibillion-dollar addressable market for satellite deorbiting services [80] - The space economy is projected to grow from approximately $469 billion today to over $1 trillion by 2040, indicating a favorable market environment for space infrastructure services [54] Company Strategy and Development Direction - Momentus aims to enhance its capabilities in satellite servicing, including rendezvous and proximity operations, and plans to introduce a robotic arm for satellite servicing and deorbiting [78] - The company is focused on reducing operating costs to extend its cash runway and is actively pursuing government contracts to support its R&D efforts [49][51] - Momentus is committed to improving its technology and operational processes to boost investor confidence and position itself as a leading player in the space infrastructure market [15][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on regulatory changes and market opportunities, particularly in satellite deorbiting and servicing [81] - The leadership team highlighted the importance of learning from past missions to enhance the reliability and performance of future spacecraft [100] - The company remains optimistic about its growth prospects, driven by increasing demand for space services and favorable regulatory conditions [54][61] Other Important Information - Momentus has signed contracts with NASA and other entities, marking significant milestones in its efforts to expand into government services [41] - The company is preparing for its next Vigoride launch targeted for December 2022, with ongoing improvements based on lessons learned from previous missions [26][62] Q&A Session Summary Question: Can you discuss the new FCC rule and its implications? - Management noted that the new FCC rule creates significant demand for satellite deorbiting services, which Momentus has been preparing for by investing in relevant capabilities [77][80] Question: What are the implications of changes in SpaceX transporter pricing? - Management indicated that while new pricing structures will affect future costs, existing agreements will not be impacted until 2024, and they plan to pass on costs to customers where possible [82][84] Question: What are customer views on the small rocket segment? - Management observed that customers are looking for more flight heritage from small launch providers, but competition is driving down launch costs, making rideshare options more attractive [90] Question: What lessons were learned from the early Vigoride mission? - Management highlighted the importance of designing for resilience and redundancy, which allowed for the deployment of satellites despite challenges faced during the Vigoride 3 mission [96][100] Question: What are the primary objectives for the Vigoride 5 mission? - The primary objectives include testing the vehicle's performance, learning from any encountered issues, and demonstrating new capabilities, particularly with the hosted payload for Caltech [104][106]

Financial Performance - Total service revenue for Q3 2022 was $129,000, a decrease of 35.5% compared to $200,000 in Q3 2021[16] - Gross margin for Q3 2022 was $115,000, down from $384,000 in Q3 2021, reflecting a significant decline in revenue[16] - Net loss for Q3 2022 was $21,298,000, compared to a net loss of $5,614,000 in Q3 2021, highlighting a worsening financial position[16] - For the nine months ended September 30, 2022, Momentus reported a net loss of $71,004, compared to a net income of $123,384 for the same period in 2021[22] - The net loss for the quarter ending June 30, 2022, was $21,298 thousand, reflecting a decrease from the previous quarter's net loss of $22,872 thousand[18] - The diluted net loss per share for the three months ended September 30, 2022, was $(0.26), compared to $(0.09) for the same period in 2021[187] Assets and Liabilities - Total assets decreased to $108,700,000 as of September 30, 2022, down from $185,825,000 as of December 31, 2021[14] - Total liabilities were $48,809,000 as of September 30, 2022, a decrease from $53,937,000 as of December 31, 2021[14] - The accumulated deficit increased to $279,686,000 as of September 30, 2022, compared to $208,683,000 as of December 31, 2021[14] - The total accrued expenses as of September 30, 2022, amounted to $7.881 million, down from $9.785 million as of December 31, 2021, indicating a reduction of about 19.4%[142] - The Company’s total loan payable as of September 30, 2022, consisted of $18.3 million in gross Term Loan payable and $0.1 million in accrued interest, offset by $2.0 million in unamortized debt discount and issuance costs[151] Research and Development - Research and development expenses increased to $10,571,000 in Q3 2022, compared to $9,047,000 in Q3 2021, indicating ongoing investment in technology[16] - Research and development costs are expensed as incurred, focusing on developing existing and future technologies for the Company's vehicles[96] - Research and development expenses for stock-based compensation were $737,000 for the three months ended September 30, 2022, up from $52,000 in 2021, indicating a significant increase[181] Stock and Equity - Weighted average shares outstanding, basic, increased to 82,066,795 in Q3 2022 from 60,589,566 in Q3 2021, reflecting potential dilution[16] - As of September 30, 2022, the total common stock shares outstanding were 83,984,571, with a total stockholders' equity of $59,891 thousand[18] - The Company issued 1,294,668 common stock shares upon the exercise of stock options during the quarter ending March 31, 2022, generating $345 thousand in additional capital[18] - The Company issued SAFE notes to investors, resulting in aggregate proceeds of $30.9 million during the nine months ended September 30, 2021[143] - The Company entered into an At-the-Market Equity Offering Sales Agreement allowing for the sale of shares of Common Stock up to an aggregate offer price of $50.0 million, with a commission rate of up to 3.0%[169] Operations and Services - Momentus deployed a total of eight customer satellites in low-earth orbit, including five additional satellites during the third quarter of 2022[31] - The company anticipates flying its second Vigoride vehicle to low-earth orbit as early as December 2022, subject to regulatory approvals and successful preparations[33] - The company launched its first demonstration flight of the Vigoride spacecraft (Vigoride 3) on May 25, 2022, successfully deploying two customer satellites[61] - The Company recognized $129 thousand in revenue during the three months ended September 30, 2022, with $28 thousand from forfeited customer deposits and $101 thousand from resolved uncertainties related to its inaugural launch[80] Legal and Compliance - The Company paid a fine of $2 million as part of a settlement with the SEC on July 8, 2021, related to the Registration Statement filed in connection with the Business Combination[196] - The Company is involved in litigation regarding claims of fraudulent inducement and breach of contract, with damages sought exceeding $7.6 million[206] - The NSA imposes compliance costs and restrictions that may adversely affect the Company's operating results, with potential penalties of up to $1,000,000 per breach[202] - Legal expenses incurred by the Company were approximately $0.3 million and $1.6 million for the three and nine months ended September 30, 2022, respectively[203] Future Outlook - The Company has future estimated amortization expenses related to intangible assets totaling $343 thousand, with $12 thousand expected for the remainder of 2022[135] - The total future unconditional purchase obligations as of September 30, 2022, amounted to $19,663,000, with $5,963,000 due in the remainder of 2022 and $13,100,000 in 2023[190] - The Company has an estimated liability of $10.0 million expected to be paid to the Co-Founders, recorded as a reduction of additional paid-in capital as of September 30, 2022[160]

Financial Data and Key Metrics Changes - The company reported a cumulative backlog of approximately $55 million as of July 31, 2022, down from $69 million in the previous quarter due to a contract cancellation by a customer [36] - The company ended Q2 with non-restricted cash and cash equivalents of $109 million, which is expected to last through the end of 2023 [37] - The company recognized $50,000 in revenue and $38,000 in gross profits during the quarter, with a loss from operations of approximately $24 million [37] Business Line Data and Key Metrics Changes - Momentus successfully deployed a total of six customer satellites from the Vigoride 3 vehicle and one from a third-party deployer system, totaling seven satellites deployed [10][22] - The company plans to launch its second Vigoride vehicle on the SpaceX Transporter-6 mission targeted for November 2022, with additional missions planned for early 2023 [27][75] Market Data and Key Metrics Changes - The company is exploring adjacent market segments by offering a lower-cost option alongside Vigoride, which allows it to address diverse customer needs more economically [24] - The small satellite market remains robust, with many new entrants and innovative ideas emerging, despite a tougher funding environment [78] Company Strategy and Development Direction - Momentus is implementing a cost reduction plan to extend its cash runway through the end of 2023, focusing on operational efficiencies and delaying certain R&D projects [27][29] - The company aims to increase its focus on bidding for government programs at NASA and the Department of Defense, identifying significant opportunities for funding [30][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's progress, having retired historical regulatory difficulties and successfully launched its first spacecraft [31] - The company is committed to learning from its inaugural mission and implementing corrective actions to ensure future missions are productive [32] Other Important Information - The company has made substantial progress in technology development, including completing ground testing and preparing for future launches [15] - An independent review team confirmed the root causes of anomalies experienced during the Vigoride 3 mission, leading to enhanced testing procedures for future missions [20][65] Q&A Session Summary Question: Can you talk about how you're tracking schedule rides for November? - Management confirmed they are on track for the November launch but noted a tight schedule and potential supply chain challenges [43] Question: Can you provide details on the extended cash runway and revenue assumptions? - Management indicated that the cash on hand should last through the end of 2023 without assuming material revenue from upcoming launches [52] Question: How comfortable is the company with the solar panel issue and the processes behind it? - Management acknowledged the mechanical issue with the solar panels and stated that enhanced test procedures are being implemented to prevent future occurrences [64] Question: Are there specific government programs that could be leveraged for funding? - Management mentioned pursuing opportunities with NASA and the Department of Defense, including proposals for NASA's tipping point and VADR contracts [66][67] Question: What level of launch cadence is needed to generate cash? - Management stated that the next three missions are fully funded with the current cash balance, and they expect customer order activity to increase once flight heritage is established [75]

Vigoride 3 Mission & Second SpaceX Port - Vigoride 3 successfully launched into orbit on the SpaceX Transporter-5 mission and established initial two-way communications with the ground station[4] - The company deployed the first two customer satellites from Vigoride 3 in Q2, with four more deployed in Q3, totaling six[4] - Momentus purchased a second port on the SpaceX Transporter-5 mission for deploying customer satellites directly from the launch vehicle, deploying five satellites for four customers[7] - The third-party system used on the second port worked as expected, and the company is evaluating expansion into ride-share aggregation[7, 8] Financial Highlights (Q2 2022) - The company had $55 million in backlog (potential revenue) as of July 31, 2022[23] - Unrestricted cash and cash equivalents were approximately $109 million as of June 30, 2022[23] - Gross debt was approximately $21 million, consisting of a term loan[23] - The company recognized $50 thousand in revenue and $38 thousand in gross profit related to Vigoride 3[23] - Q2 loss from operations was approximately $24 million and Q2 Adjusted EBITDA was negative $18 million[23] Cost Reduction Plan & Future Missions - The company is implementing a cost reduction plan to extend its cash runway through the end of 2023 and plans to be opportunistic about raising capital[17] - Planned missions on upcoming SpaceX launches include Vigoride 5, Vigoride 6, and Vigoride 7 targeted for launches in November 2022, January 2023, and April 2023, respectively[17]

Part I - Financial Information [Unaudited Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Unaudited financial statements for the period ending June 30, 2022, reflect the inaugural mission and business combination [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $133.8 million due to cash reduction, with stockholders' equity falling to $82.2 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $109,052 | $160,036 | | Total current assets | $117,574 | $169,664 | | Total assets | $133,774 | $185,825 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $30,704 | $38,867 | | Total liabilities | $51,569 | $53,937 | | Total stockholders' equity | $82,205 | $131,888 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company recognized its first revenue of $50 thousand and reported a net loss of $22.9 million for Q2 2022 Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | Six Months 2022 | Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Service revenue | $50 | $— | $50 | $130 | | Gross margin | $38 | $— | $38 | $82 | | Loss from operations | $(23,719) | $(30,534) | $(48,543) | $(54,363) | | Net (loss) income | $(22,872) | $64,327 | $(49,706) | $128,998 | | Net (loss) income per share, basic | $(0.28) | $1.25 | $(0.62) | $2.36 | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20%28Deficit%29) Stockholders' equity declined to $82.2 million, primarily driven by a net loss of $49.7 million for the period Changes in Stockholders' Equity (in thousands) | Description | Six Months Ended June 30, 2022 | | :--- | :--- | | Balance, December 31, 2021 | $131,888 | | Net loss | $(49,706) | | Stock-based compensation | $5,317 | | Other (stock issuance/repurchase) | $466 | | **Balance, June 30, 2022** | **$82,205** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $45.9 million, contributing to a total cash decrease of $50.2 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(45,943) | $(44,077) | | Net cash used in investing activities | $(945) | $(2,187) | | Net cash (used in) provided by financing activities | $(3,277) | $55,713 | | **(Decrease) Increase in cash** | **$(50,165)** | **$9,449** | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Vigoride 3 mission anomalies, legal proceedings, and the National Security Agreement - The inaugural Vigoride 3 mission launched on May 25, 2022, but **experienced anomalies with its deployable solar arrays**, resulting in low power and communication issues; as of July 29, 2022, **7 of 10 customer satellites had been deployed**[24](index=24&type=chunk)[25](index=25&type=chunk)[30](index=30&type=chunk) - The company recognized its **first service revenue of $50,000** in Q2 2022 from a completed performance obligation on the May mission; due to mission anomalies, related deposits of **$133,000 were recorded as deferred revenue**[73](index=73&type=chunk) - The company is subject to several legal proceedings, including a consolidated securities class action lawsuit, a shareholder derivative action, and litigation from a SAFE note investor; it also **settled with the SEC for a $7.0 million penalty**[187](index=187&type=chunk)[191](index=191&type=chunk)[201](index=201&type=chunk) - A National Security Agreement (NSA) with CFIUS led to the **divestment of the co-founders' equity for up to $50 million**; **$40 million was paid** following the Business Combination, with a potential **$10 million contingent payment** remaining, for which a **$5.8 million liability is recorded**[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the inaugural mission's results, financial performance, and liquidity challenges [Overview](index=37&type=section&id=Overview) The inaugural Vigoride 3 mission experienced anomalies but deployed several satellites; backlog stands at $55 million - Launched its first demonstration flight of the Vigoride spacecraft (Vigoride 3) on May 25, 2022[212](index=212&type=chunk) - The Vigoride spacecraft **experienced anomalies with its deployable solar arrays**, causing low power and communication problems, which has **substantially declined confidence** in performing all planned operations for this mission[213](index=213&type=chunk)[214](index=214&type=chunk)[219](index=219&type=chunk) - As of July 29, 2022, Momentus has **deployed a total of seven customer satellites**: six from Vigoride 3 and one from a third-party deployer system[218](index=218&type=chunk) - The company has signed contracts for approximately **$55 million in backlog** as of July 31, 2022, spanning 22 companies in 16 countries[211](index=211&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) The company generated its first revenue in Q2 2022 but recorded a net loss of $22.9 million amid rising SG&A costs Comparison of Q2 2022 vs. Q2 2021 (in thousands) | Metric | Q2 2022 | Q2 2021 | $ Change | | :--- | :--- | :--- | :--- | | Service revenue | $50 | $— | $50 | | Research and development expenses | $10,896 | $20,794 | $(9,898) | | Selling, general and administrative expenses | $12,861 | $9,740 | $3,121 | | Operating loss | $(23,719) | $(30,534) | $6,815 | | Net (loss) income | $(22,872) | $64,327 | $(87,199) | - The decrease in Q2 2022 R&D expenses was primarily due to a **one-time $8.7 million impairment** of prepaid launch deposits in Q2 2021[303](index=303&type=chunk) - The increase in Q2 2022 SG&A expenses was driven by higher payroll ($0.9M), insurance ($0.7M), and other corporate costs ($0.8M) associated with being a public company[304](index=304&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $109.1 million in cash, which management believes is sufficient for the next 12 months - The company's principal source of liquidity is its cash and cash equivalents, which amounted to **$109.1 million** as of June 30, 2022[325](index=325&type=chunk) Historical Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash used in Operating activities | $(45,943) | $(44,077) | | Net cash used in Investing activities | $(945) | $(2,187) | | Net cash (used in) provided by Financing activities | $(3,277) | $55,713 | - Management expects current cash and projected gross profit will **fund operations for more than 12 months**, but notes that changing circumstances could require additional equity or debt financing[332](index=332&type=chunk)[333](index=333&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks from interest rates and foreign currency are considered minimal - **Interest rate risk is low**, as cash is held in short-term, highly liquid investments and the company's Term Loan has a fixed interest rate[370](index=370&type=chunk)[371](index=371&type=chunk) - **Foreign currency risk is not material** because a significant portion of cash receipts and expenses are generated in U.S. dollars[372](index=372&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes identified - Management concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2022[375](index=375&type=chunk) - There were **no material changes** to the company's internal control over financial reporting during the fiscal quarter ended June 30, 2022[376](index=376&type=chunk) Part II - Other Information [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company faces multiple legal proceedings, including a class action and a lawsuit from a SAFE note investor - The company is defending against a **consolidated putative class action lawsuit** alleging violations of securities laws related to disclosures for the Business Combination[186](index=186&type=chunk)[187](index=187&type=chunk) - A **shareholder derivative action** was filed in June 2022, and a shareholder Section 220 litigation was filed to inspect books and records, both related to the de-SPAC merger[200](index=200&type=chunk)[201](index=201&type=chunk) - In July 2022, a SAFE note investor filed a lawsuit claiming fraudulent inducement and breach of contract, seeking **damages exceeding $7.6 million**[202](index=202&type=chunk) [Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) Key risks include mission failures, dependency on government licenses, ongoing losses, and an eroding backlog - The inaugural Vigoride mission **experienced anomalies** with its communication and power systems, preventing it from completing all objectives and fully validating its technology, which could harm the company's reputation[379](index=379&type=chunk)[384](index=384&type=chunk) - The business is **dependent on receiving required governmental licenses** and approvals (e.g., from FAA, FCC), and there is no assurance these will be granted in a timely manner or at all[385](index=385&type=chunk)[387](index=387&type=chunk) - The company has a **history of significant losses**, including an operating loss of $99.8 million in 2021, and expects to incur future losses; the **backlog has eroded from $86 million to $55 million** and may not convert to revenue[388](index=388&type=chunk)[393](index=393&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - None reported for the period[400](index=400&type=chunk) [Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None reported[401](index=401&type=chunk) [Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - None reported[402](index=402&type=chunk) [Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No other information was required to be disclosed for the period - None reported[403](index=403&type=chunk) [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements and certifications - Key exhibits filed include the Merger Agreement and certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act[404](index=404&type=chunk)

Company Overview - Momentus plans to offer in-space transportation and infrastructure services, utilizing water plasma propulsion technology to potentially reduce costs[3] - The company's services include space transportation, hosted payloads, and in-orbit servicing[4, 6] - Momentus has established key partnerships in rideshare, in-space robotics, and global ground station services[5] Financial Highlights - As of April 30, 2022, Momentus had a backlog of approximately $69 million, representing potential revenue[7, 57] - As of March 31, 2022, the company's non-restricted cash and cash equivalents were approximately $136 million[57] - The company's gross debt was approximately $24 million as of March 31, 2022[57] - In Q1 2022, Momentus experienced a loss from operations of approximately $25 million and an adjusted EBITDA of negative $17 million[57] Operational Progress - Momentus is developing the Vigoride orbital transfer vehicle, with Vigoride 3 undergoing system-level thermal vacuum testing in Q1 2022[28] - Vigoride 3 has been shipped to Cape Canaveral and mated to the SpaceX Falcon 9 launch vehicle[29] - The company has secured government licenses and approvals for its inaugural launch, including licenses from NOAA and FCC, and a favorable payload determination from the FAA[35] - Momentus plans to deploy nine satellites and operate space hardware for a customer test on the first Vigoride demo mission[38] - The company has signed Launch Services Agreements for four additional SpaceX missions, targeting launches between October 2022 and October 2023[44]