Momentus Announces Net Loss as Company Gears Up for Next Launch

In-space transportation company Momentus announced a net third quarter loss of $21.3 million on Tuesday as the company prepared for the launch of its next Vigoride space tug next month.

Momentus’ Q3 net loss was more than three times higher than the $5.6 million lost during the same period in 2021. The net loss for the first nine months was $71 million, down from $123.4 million for the first three quarters of last year. The company had cash and cash equivalents worth 81.6 million as of Sept. 30.

“Momentus placed five additional satellites in orbit during the quarter, successfully completed assembly and test of our next generation Orbital Service Vehicle (OSV), Vigoride 5, for launch on the SpaceX Transporter-6 mission targeted for next month, and advanced development of key technologies, such as our innovative and environmentally-friendly Microwave Electrothermal Thruster (MET) that uses water as a propellant,” said CEO John Rood.

Momentus’ Vigoride 5 orbital service vehicle (OSV) is being prepared for shipment to Florida for launch aboard SpaceX’s Transporter-6 rideshare mission in December.

“We’re excited to be supporting some truly innovative work that will advance the technology boundaries in space. Next month, we are planning for Vigoride 5 to begin a several month mission that includes a hosted payload from Caltech that aims to demonstrate the ability to collect solar energy in space and transmit it to Earth. Their aim is to provide a new ground-breaking and environmentally-friendly way to meet energy needs on Earth,” Rood said.

Momentus’ earnings release and financials are below.

Momentus Announces Third Quarter Financial Results

SAN JOSE, Calif.–(BUSINESS WIRE)–Nov. 8, 2022– Momentus Inc. (NASDAQ: MNTS) (“Momentus” or the “Company”), a U.S. commercial space company that offers transportation and other in-space infrastructure services, today announced its financial results for the third quarter ended September 30, 2022.

Momentus Chief Executive Officer John Rood made the following comments about the quarter:

“This was another eventful quarter at Momentus. Our talented engineering and operations team made solid progress during the quarter in our research and development efforts taking important strides toward our goal of being a leading provider of space infrastructure services that will enable the new space economy. Momentus placed five additional satellites in orbit during the quarter, successfully completed assembly and test of our next generation Orbital Service Vehicle (OSV), Vigoride 5, for launch on the SpaceX Transporter-6 mission targeted for next month, and advanced development of key technologies, such as our innovative and environmentally-friendly Microwave Electrothermal Thruster (MET) that uses water as a propellant.”

“We’re excited to be supporting some truly innovative work that will advance the technology boundaries in space. Next month, we are planning for Vigoride 5 to begin a several month mission that includes a hosted payload from Caltech that aims to demonstrate the ability to collect solar energy in space and transmit it to Earth. Their aim is to provide a new ground-breaking and environmentally-friendly way to meet energy needs on Earth.”

“Momentus is also thrilled to have signed a contract modification with NASA to transport two cube satellites that will perform cutting-edge research on weather events in space. This marks a big milestone in our efforts to grow into the Government market, which is an area we are prioritizing and see substantial opportunities for further growth.”

Third Quarter 2022 Business Highlights:

  • The Company’s Vigoride 3 Orbital Service Vehicle (OSV) deployed five customer satellites during the third quarter of 2022, bringing the cumulative number of customer satellite deployments from Vigoride 3 to seven and the total number of Momentus customer satellites deployed from all platforms to eight.
  • Applied lessons learned from the inaugural Vigoride mission to the next generation Vigoride 5 OSV in preparation for its planned launch on the SpaceX Transporter-6 mission, which is targeted for December 2022.
  • Conducted an expanded ground-testing campaign on Vigoride 5 and its component systems, including simulated zero-gravity deployment testing of the solar array that will power Vigoride 5, and ground hot fire testing of Vigoride 5’s next-generation Microwave Electrothermal Thruster (MET) propulsion module.
  • Completed ground vibration testing of the complete Vigoride 5 OSV to simulate the environment that it will experience on the SpaceX Falcon 9 launch vehicle. Subsequent to the close of the third quarter, Momentus completed thermal vacuum testing of Vigoride 5, which simulates the environment that it will encounter in space and concludes the overall Vigoride 5 environmental testing campaign.
  • Subsequent to the close of the third quarter, integrated customer satellites onto Vigoride 5, completed its Flight Readiness Review and are preparing to ship the vehicle to its launch site in Cape Canaveral, FL.
  • Signed a contract with a new commercial customer OHB LuxSpace to conduct a hosted payload mission.
  • Signed a contract modification with NASA’s Kennedy Space Center for transportation of two satellites to custom orbits. This mission highlights the unique capabilities of Momentus’ OSV to transport a customer satellite from the launch vehicle’s standard drop-off orbit to its desired custom orbit. The NASA mission will perform cutting-edge research on space weather and Momentus is proud to provide the custom capabilities needed to support this work.
  • Signed a Memorandum of Understanding with Sidus Space, under which Momentus will collaborate and provide transportation and payload-hosting services for its Lizziesat satellites.
  • Put in place the framework for future capital raising efforts by filing an S-3 Universal Shelf Registration statement with a ceiling of $200M and launched a three-year, $50M At-The-Market Equity program.

Conference Call Information

Momentus Inc. will host a conference call to discuss the results today, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). To access the conference call, participants should dial +1 (800) 715-9871 and enter the conference ID number 3659704. International participants should dial +1 (646) 307-1963. The live audio webcast along with supplemental information will be accessible on the Company’s Investor Relations website at https://investors.momentus.space/events-and-presentations. A recording of the webcast will also be available following the conference call.

About Momentus Inc.

Momentus is a U.S. commercial space company that offers in-space infrastructure services, including in-space transportation, hosted payloads and in-orbit services. Momentus believes it can make new ways of operating in space possible with its planned in-space transfer and service vehicles that will be powered by an innovative water plasma-based propulsion system that is under development.

MOMENTUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)

  Three Months Ended
September 30, 2022
  Three Months Ended
September 30, 2021
  Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021
Service revenue1$129 $200 $179$330
Cost of revenue2 14  (184) 26 (135)
Gross margin 115  384  153 465
Operating expenses:           
Research and development expenses 10,571  9,047  31,438 39,747
Selling, general and administrative expenses 11,184  12,057  38,898 35,802
Total operating expenses 21,755  21,104  70,336 75,549
Loss from operations (21,640) (20,721) (70,183) (75,084)
            
Other income (expense):           
Decrease (increase) in fair value of SAFE notes   26,924   209,291
Decrease (increase) in fair value of warrants 1,579  (2,712) 3,382 9,826
Realized loss on disposal of asset (45)   (114) 
Interest income 28    33 2
Interest expense (1,261) (4,328) (4,166) (8,685)
SEC settlement      (7,000)
Other income (expense)3 41  (4,778) 44 (4,965)
Total other income (expense) 342  15,107  (821) 198,469
Income (loss) before income taxes (21,298) (5,614) (71,004) 123,385
Income tax provision      1
Net income (loss)$(21,298)$(5,614)$(71,004)$123,384
Net income (loss) per share, basic$(0.26)$(0.09)$(0.88)$2.06
Net income ( loss) per share, fully diluted$(0.26)$(0.09)$(0.88)$1.92
Weighted average shares outstanding, basic 82,066,795  60,589,566  81,122,541 59,873,199
Weighted average shares outstanding, fully diluted 82,066,795  60,589,566  81,122,541 64,232,537

1 – Prior year revenue recognized related to the cancellation of customer contracts, resulting in the forfeiture of customer deposits

2 – The reduction of cost of revenue represents the reversal of a contingency recorded during the prior year for loss contracts related to free slots on future missions. During the prior three months ended September 30, 2021, the Company signed amendments or terminations with those customers such that the services will no longer be free of charge. The reversed contingency was offset by costs incurred related to one of the cancelled contracts.

3 – Other expenses during the three months ended September 30, 2021 were due to the transaction costs allocated to the liability-classified warrant assumed in connection with the Business Combination.

MOMENTUS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

  September 30, 2022December 31, 2021
ASSETS  
Current assets:  
Cash and cash equivalents$81,570$160,036
Restricted cash, current 287 197
Prepaids and other current assets 10,939 9,431
Total current assets 92,796 169,664
Property, machinery and equipment, net 4,333 4,829
Intangible assets, net 343 349
Operating right-of-use asset 6,715 7,604
Deferred offering costs 309 
Restricted cash, non-current 310 314
Other non-current assets3,894 3,065
Total assets$108,700$185,825
  
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) 
Accounts payable1,596 1,911
Accrued expenses7,881 9,785
Loan payable, current10,844 20,907
Contract liabilities, current1,226 
Operating lease liability, current1,140 1,189
Stock repurchase liability10,000 
Other current liabilities110 5,075
Total current liabilities32,797 38,867
Contract liabilities, non-current1,178 1,554
Loan Payable, non-current5,583 
Warrant liability2,367 5,749
Operating lease liability, non-current6,425 7,284
Other non-current liabilities459 483
Total non-current liabilities 16,012 15,070
Total liabilities 48,809 53,937
Commitments and Contingencies (Note 12)  
Shareholders’ equity (deficit):  
Common stock, $0.00001 par value; 250,000,000 shares authorized and 83,984,571 issued and outstanding as of September 30, 2022; 250,000,000 shares authorized and 81,211,781 issued and outstanding as of December 31, 2021 1 1
Additional paid-in capital 339,576 340,570
Accumulated deficit (279,686) (208,683)
Total shareholders’ deficit 59,891 131,888
Total Liabilities and Shareholders’ Deficit$108,700$185,825

MOMENTUS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

  Nine Months Ended 2022 Nine Months Ended 2021
Cash flows from operating activities:  
Net (loss) income$(71,004)$123,384
Adjustments to reconcile net (loss) income to net cash used in operating activities:  
Depreciation and amortization 831 768
Amortization of debt discount and issuance costs 2,114 6,935
Amortization of right-of-use asset 889 971
Decrease in fair value of warrants (3,382) (9,826)
Decrease in fair value of SAFE notes  (209,291)
Impairment of prepaid launch costs  9,450
Loss on disposal of fixed and intangible assets 121 
Stock-based compensation expense 8,564 11,187
Changes in operating assets and liabilities:  
Prepaids and other current assets (1,571) (15,350)
Other non-current assets (901) (677)
Accounts payable (328) 4,357
Accrued expenses (1,873) 4,546
Accrued interest 92 
Other current liabilities (4,967) 4,829
Contract liabilities 851 (1,071)
Lease liability (908) (115)
Other non-current liabilities (23) 5
Net cash used in operating activities (71,495) (69,897)
   
Cash flows from investing activities:  
Purchases of property, machinery and equipment (618) (2,835)
Proceeds from sale of property, machinery and equipment 7 
Purchases of intangible assets (30) (16)
Net cash used in investing activities (641) (2,852)
   
Cash flows from financing activities:  
Proceeds from issuance of SAFE notes  30,853
Proceeds from issuance of loan payable  25,000
Proceeds from exercise of stock options 517 278
Proceeds from employee stock purchase plan 190 
Repurchase of Section 16 Officer shares for tax coverage exchange (265) 
Payment of loan payable (6,686) 
Payment of debt issuance costs  (144)
Payment of warrant issuance costs  (31)
Payment for repurchase of common shares  (40,000)
Proceeds from issuance of common shares in PIPE  110,000
Payments of issuances costs related to PIPE   (4,416)
Proceeds from issuance of common stock upon Business Combination  128,167
Payments for issuance costs related to Business Combination  (21,285)
Net cash (used in) provided by financing activities (6,244) 228,421
   
(Decrease) Increase in cash, cash equivalents and restricted cash (78,380) 155,672
Cash, cash equivalents and restricted cash, beginning of period 160,547 23,520
Cash, cash equivalents and restricted cash, end of period$82,167$179,191
   
Supplemental disclosure of non-cash investing and financing activities  
Issuance of common stock related to conversion of SAFE notes$ $136,001
Issuance of common stock related to exercise of warrant liabilities$$6,999
Reclassification of deferred offering costs$$2,610
Deferred offering costs in accounts payable and accrued expenses at period end$238$
Assumption of merger warrants liability$$31,225
Operating lease right-of-use assets in exchange for lease obligations$$8,501
Stock repurchase liability fair value$10,000$
   
Supplemental disclosure of cash flow information  
Cash paid for income taxes$$1
Cash paid for interest$1,960$1,750

Reclassifications

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. None of the reclassifications have changed the total assets, liabilities, shareholders’ deficit, income, expenses or net losses previously reported.

Use of Non-GAAP Financial Measures (unaudited)

This press release references certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP selling, general, and administrative expense and non-GAAP research and development expense. The Company defines adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization, stock-based compensation, and certain other items the Company believes are not indicative of its core operating performance. The Company defines non-GAAP selling, general, and administrative expenses and research and development expenses as those respective GAAP amounts, excluding stock-based compensation and non-recurring items not indicative of core operating performance None of these non-GAAP financial measures is a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles in the United States (GAAP) and should not be considered as an alternative to any other performance measures derived in accordance with GAAP.

The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company that is helpful in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.

Quarterly adjusted EBITDA

A reconciliation of adjusted EBITDA to net loss for the three months ended September 30, 2022, September 30, 2021, and June 30, 2022, is set forth below:

(in thousands)Three Months Ended September 30, 2022Three Months Ended September 30, 2021Three Months Ended June 30, 2022
Net Income (Loss)$(21,298)$(5,614) $(22,872)
Interest income(28)   (5)
Interest expense 1,261 4,328  1,413
Depreciation & amortization 253 320  284
EBITDA (19,812) (966)  (21,180)
(Decrease) increase in fair value of SAFE notes  (26,924)  
(Decrease) increase in fair value of warrants (1,579) 2,712  (2,254)
Realized loss on disposal of assets 45   (1)
Transaction costs allocated to warrant liability  4,780  
SEC and CFIUS legal expenses 279 2,188  505
Class action litigation legal expenses 621 54  600
Other non-recurring litigation legal expense 447    170
SEC compliance costs 20   36
NSA compliance costs 487  882  832
Severance and other non-recurring expenses1 90 (7)  103
Stock-based compensation 3,289 3,075  3,035
Adjusted EBITDA$(16,113)$(14,206) $(18,154)

1 – Loss contingencies for certain severance agreements were reversed when the Company determined they would not be signed and paid

A reconciliation of selling, general, and administrative expenses to non-GAAP selling, general, and administrative expenses for the three months ended September 30, 2022, September 30, 2021, and June 30, 2022, is set forth below:

(in thousands)Three Months Ended September 30, 2022 Three Months Ended September 30, 2021Three Months Ended June 30, 2022
Selling, general, and administrative expenses$11,184$12,057$12,861
Stock-based compensation 2,552 3,023 2,521
SEC and CFIUS legal expenses 279 2,188 505
Class action litigation legal expenses 621 54 600
Other non-recurring litigation legal expense447  170
SEC compliance costs20  36
NSA compliance costs487 882 832
Severance and other non-recurring expenses52  103
Non-GAAP selling, general, administration expenses$6,726$5,910$8,094

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three months ended September 30, 2022, September 30, 2021, and June 30, 2022, is set forth below:

(in thousands)Three Months Ended September 30, 2022 Three Months Ended September 30, 2021Three Months Ended June 30, 2022
Research and development expenses$10,571$9,047$10,896
Prepaid launch deposit impairment   
Stock-based compensation 737 52 514
Severance and other related expenses1 38 (7) 
Non-GAAP Research and development expenses$9,796$9,002$10,382

1 – Loss contingencies for certain severance agreements were reversed when the Company determined they would not be signed and paid