Momentus (US:MNTS)2022-03-09 02:15Business Operations and Risks - Momentus Inc. has not yet delivered customer satellites into orbit, and setbacks during initial missions could adversely affect the business[16]. - A key component of Momentus' business model is the delivery of satellites from low earth orbit to other orbits, which is still in the development stage and unvalidated[16]. - Momentus faces risks related to obtaining necessary governmental licenses and approvals for its operations, which are essential for business continuity[18]. - The market for in-space infrastructure services is not precisely established and may grow more slowly than anticipated, impacting revenue potential[18]. - The company relies on third-party launch vehicles for launching its vehicles and customer payloads, and any delays could materially impact financial results[18]. - Momentus is subject to various requirements under the National Security Agreement, incurring significant compliance costs and potential penalties for non-compliance[18]. - The company may not be able to convert its backlog of orders into revenue, which poses a risk to future financial performance[18]. - Momentus operates in a highly competitive industry, which may force price reductions and impact gross margins[18]. Financial Performance - The company has incurred significant losses since inception and expects to continue incurring losses in the future, raising concerns about achieving profitability[18]. - Service revenue for the year ended December 31, 2021, was $0.330 million, a slight decrease from $0.365 million in 2020, reflecting a decline of 9.6%[445]. - Gross margin improved to $0.465 million in 2021 from a loss of $0.003 million in 2020, indicating a positive shift in profitability[445]. - Net income for 2021 was $120.654 million, a significant turnaround from a net loss of $307.027 million in 2020[445]. - The company reported a basic net income per share of $1.85 for 2021, compared to a loss of $4.90 per share in 2020[445]. - Total liabilities decreased to $53.937 million in 2021 from $325.792 million in 2020, a reduction of 83.5%[443]. - Stockholders' equity improved to $131.888 million in 2021, recovering from a deficit of $289.472 million in 2020[443]. - The company experienced a significant decrease in the fair value of SAFE notes, with a gain of $209.291 million in 2021 compared to a loss of $267.290 million in 2020[445]. - Cash flows from operating activities resulted in a net cash used of $86.712 million in 2021, compared to $32.534 million in 2020[450]. - The company reported an increase in cash, cash equivalents, and restricted cash to $160.547 million at the end of 2021, up from $23.520 million at the beginning of the year[450]. Investments and Expenses - Research and development expenses surged to $51.321 million in 2021, up from $22.718 million in 2020, marking an increase of 126%[445]. - The company incurred stock-based compensation expenses of $18.452 million in 2021, compared to $2.771 million in 2020[450]. - The company recorded an impairment of $8.7 million for prepaid launch costs due to a launch service provider terminating agreements, marking the third rescheduling of the payload[477]. - The company recorded total lease expenses of $2.4 million for the year ended December 31, 2021, compared to $0.3 million in 2020, indicating increased operational costs[555]. - The Company incurred interest expense amortization of $11.7 million for the year ended December 31, 2021, related to the Term Loan[566]. Capital Structure and Financing - The company had cash and cash equivalents of $160.0 million as of December 31, 2021, primarily invested in highly liquid investments[429]. - Proceeds from the issuance of SAFE notes amounted to $30.853 million, while proceeds from the issuance of common shares in a PIPE transaction totaled $110 million[450]. - The company completed a business combination that resulted in gross proceeds of $238.4 million, including $110.0 million from a PIPE investment and $128.4 million from common stock issuance[532]. - The Company entered into a Term Loan agreement providing up to $40.0 million in borrowing capacity, of which $25.0 million was borrowed at inception, with an annual interest rate of 12%[562]. - The total lease liability as of December 31, 2021, was $8.5 million, significantly up from $0.3 million in 2020, reflecting the adoption of new leases[558]. Future Outlook and Plans - The company plans to launch its Vigoride vehicle to Low Earth Orbit as early as June 2022, pending necessary licenses and approvals[452]. - The first anticipated customer launch is expected to occur as early as June 2022, pending necessary licenses and approvals[482]. - The company has future unconditional purchase obligations totaling $21.5 million, with $10.2 million due in 2022 and $11.3 million in 2023[606]. Legal and Compliance - The company entered into a settlement with the SEC, paying a fine of $2.0 million and recording a liability of $5.0 million due in July 2022[613]. - Legal expenses incurred during the year ended December 31, 2021, amounted to approximately $7.5 million, with expectations of continued legal expenses in the future[617].