Momentus (US:MNTS)2024-10-15 20:11Financial 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]