Momentus Narrows Annual Loss as it Prepares for Next OSV Flight
Momentus Space reported a narrower loss for 2022 as the company operated one Vigoride orbital service vehicle (OSV) in space and prepared for the launch of two others later this year.
Momentus’ net loss was $95.4 million for 2022, a reduction from the $120.7 million loss reported in 2021. The fourth quarter loss was $24.4 million, an increase from the net loss of $2.7 million in the fourth quarter of 2021.
Revenue for the year was $299,000, down from $330,000 in 2021. Cash and cash equivalents were $61.1 million on Dec. 31, 2022, down from $160 million at the end of the previous year.
After the fourth quarter ended, Momentus signed a securities purchase agreement with an unidentified institutional investor that provided the company with $10 million. Momentus issued the investor an aggregate of 9,396,000 shares of common stock, pre-funded warrants to purchase 2,170,043 shares of common stock, and warrants to purchase up to 11,566,043 shares of common stock.
CEO John Rood pointed to the success of the Vigoride 3 OSV launched last May and Vigoride 5 launched on Jan. 3 as proof of the company’s progress.
“Momentus took great strides in 2022 and so far in 2023 toward our goal of being one of the market leaders in in-space transportation and infrastructure services. We are one of a select number of companies that have launched orbital service vehicles into space to serve this market,” Rood said in a press release. “We deployed our first eight customer satellites in orbit. We have recruited a highly experienced group of leaders for our engineering, technology, program management, manufacturing, and supply chain organizations that we believe gives us a competitive edge over our peer group.”
Momentus has signed space transportation contracts with: CONTEC; FOSSA Systems; Australian Research Council Training Centre for CubeSats, Uncrewed Aerial Vehicles, and their Applications; and a repeat customer that wished to remain anonymous.
“We see multiple opportunities for growth. We recently signed new and repeat commercial customers and are seeing increased interest in our services,” Rood added. “We have begun to focus on growing our government business and are delighted that NASA contracted with us to fly two satellites on our next launch targeted for April 2023 on an important mission to study spacecraft interactions with the upper atmosphere. Finally, we’re excited about the significant interest we are seeing from U.S. Defense Department organizations in our capabilities and expect to be very competitive in winning contracts in this area.”
Momentus said it has completed ground testing and customer integration on Vigoride 6. The OSV is scheduled to launch in April on SpaceX’s Transporter-7 rideshare mission from Vandenberg Space Force Base in California. Vigoride-7 will fly on SpaceX’s Transporter-9 mission in October.
Momentus said it has reached an $8.5 million agreement in principle to settle a consolidated securities class action lawsuit in which the company and its directors and officers were accused of fraud. At least $4 million of the settlement is expected to be funded by insurance proceeds. The agreement remains subject to approval by the United States District Court for the Central District of California.
The lawsuit involved the November 2019 merger of Momentus with Stable Road Acquisition Corp., a special purpose acquisition company that was already traded on the Nasdaq stock exchange. Momentus began trading on the exchange under its own name after the merger.
The lawsuit claimed that Momentus misrepresented its space tug technology, and that it failed to disclose that the U.S. government had national security concerns about its Russian founder, Mikhail Kokorich. The suit also alleged that the company’s projections and plans were false and misleading. Stable Road was accused of failing to do due diligence about Momentus before the merger.
The charges in the lawsuit mirrored charges the Securities and Exchange Commission (SEC) leveled against the two companies over the merger in July 2021.
“According to the SEC’s settled order, Kokorich and Momentus, an early-stage space transportation company, repeatedly told investors that it had ‘successfully tested’ its propulsion technology in space when, in fact, the company’s only in-space test had failed to achieve its primary mission objectives or demonstrate the technology’s commercial viability,” the SEC said.
The order also found that:
- Momentus and Kokorich downplayed how national security concerns would impact the company’s ability to receive government operating licenses
- Stable Road repeated Momentus’s misleading statements in public filings associated with the proposed merger
- Stable Road failed investors by not doing proper due diligence on Momentus
- Stable Road failed to review the results of Momentus’s in-space test
- Stable Road never properly assessed the national security risks posed by Kokorich
- Stable Road filed inaccurate registration statements and proxy solicitations.
The SEC brought charges against: Kokorich; Momentus; Stable Road; Stable Road’s sponsor, SRC-NI; and Stable Road CEO Brian Kabot. All the defendants except for Kokorich settled with the SEC in July 2021. The SEC settlement included “total penalties of more than $8 million, tailored investor protection undertakings, and the SPAC sponsor’s forfeiture of founder’s shares.”
Kokorich, who denied the charges, gave up his CEO role at Momentus and left the United States.
Momentus’ financial results for 2022 are shown below.
Fiscal Year 2022 Financial Results
MOMENTUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||||||||
| Service revenue1 | $ | 120 | $ | — | $ | 299 | $ | 330 | ||||
| Cost of (reversal of) revenue2 (exclusive of items shown separately below) | — | — | 26 | (135) | ||||||||
| Gross profit | 120 | — | 273 | 465 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development expenses | 10,283 | 11,574 | 41,721 | 51,321 | ||||||||
| Selling, general and administrative expenses | 10,929 | 13,103 | 49,827 | 48,905 | ||||||||
| Total operating expenses | 21,212 | 24,677 | 91,548 | 100,226 | ||||||||
| Loss from operations | (21,092) | (24,677) | (91,275) | (99,761) | ||||||||
| Other income (expense): | ||||||||||||
| Decrease (increase) in fair value of SAFE notes | — | — | — | 209,291 | ||||||||
| Decrease (increase) in fair value of warrants | 1,803 | 27,505 | 5,185 | 37,330 | ||||||||
| Realized loss on disposal of asset | (54) | (17) | (168) | (17) | ||||||||
| Interest income | 489 | — | 522 | 2 | ||||||||
| Interest expense | (1,096) | (5,544) | (5,262) | (14,229) | ||||||||
| SEC settlement | — | — | — | (7,000) | ||||||||
| Litigation settlement, net | (4,500) | — | (4,500) | — | ||||||||
| Other income (expense)3 | 10 | 5 | 54 | (4,960) | ||||||||
| Total other income | (3,348) | 21,949 | (4,169) | 220,417 | ||||||||
| (Loss) income before income taxes | (24,440) | (2,728) | (95,444) | 120,656 | ||||||||
| Income tax provision | — | 1 | — | 2 | ||||||||
| Net (loss) income | $ | (24,440) | $ | (2,729) | $ | (95,444) | $ | 120,654 | ||||
| Net (loss) income per share, basic | $ | (0.30) | $ | (0.03) | $ | (1.17) | $ | 1.85 | ||||
| Net (loss) income per share, fully diluted | $ | (0.30) | $ | (0.03) | $ | (1.17) | $ | 1.70 | ||||
| Weighted average shares outstanding, basic | 82,805,352 | 79,429,672 | 81,546,648 | 65,177,873 | ||||||||
| Weighted average shares outstanding, fully diluted | 82,805,352 | 79,429,672 | 81,546,648 | 70,918,777 |
| 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 year ended December 31, 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 year ended December 31, 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)
| December 31, 2022 | December 31, 2021 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 61,094 | $ | 160,036 | |
| Restricted cash, current | 1,007 | 197 | |||
| Insurance receivable | 4,000 | — | |||
| Prepaids and other current assets | 10,173 | 9,431 | |||
| Total current assets | 76,274 | 169,664 | |||
| Property, machinery and equipment, net | 4,016 | 4,829 | |||
| Intangible assets, net | 337 | 349 | |||
| Operating right-of-use asset | 6,441 | 7,604 | |||
| Deferred offering costs | 331 | — | |||
| Restricted cash, non-current | 312 | 314 | |||
| Other non-current assets | 4,712 | 3,065 | |||
| Total assets | $ | 92,423 | $ | 185,825 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
| Accounts payable | 2,239 | 1,911 | |||
| Accrued expenses | 8,026 | 9,785 | |||
| Loan payable, current | 11,627 | 20,907 | |||
| Contract liabilities, current | 1,654 | — | |||
| Operating lease liability, current | 1,153 | 1,189 | |||
| Stock repurchase liability | 10,000 | — | |||
| Litigation settlement contingency | 8,500 | — | |||
| Other current liabilities | 27 | 5,075 | |||
| Total current liabilities | 43,226 | 38,867 | |||
| Contract liabilities, non-current | 1,026 | 1,554 | |||
| Loan Payable, non-current | 2,404 | — | |||
| Warrant liability | 564 | 5,749 | |||
| Operating lease liability, non-current | 6,131 | 7,284 | |||
| Other non-current liabilities | 465 | 483 | |||
| Total non-current liabilities | 10,590 | 15,070 | |||
| Total liabilities | 53,816 | 53,937 | |||
| Commitment and Contingencies (Note 12) | |||||
| Shareholders’ equity: | |||||
| Common stock, $0.00001 par value; 250,000,000 shares authorized and 84,441,153 issued and outstanding as of December 31, 2022; 250,000,000 shares authorized and 81,211,781 issued and outstanding as of December 31, 2021 | 1 | 1 | |||
| Additional paid-in capital | 342,733 | 340,570 | |||
| Accumulated deficit | (304,127) | (208,683) | |||
| Total shareholders’ equity | 38,607 | 131,888 | |||
| Total liabilities and shareholders’ equity | $ | 92,423 | $ | 185,825 |
MOMENTUS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Year Ended 2022 | Year Ended 2021 | |||||
| Cash flows from operating activities: | ||||||
| Net (loss) income | $ | (95,444) | $ | 120,654 | ||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||
| Depreciation and amortization | 1,090 | 1,092 | ||||
| Amortization of debt discount and issuance costs | 2,690 | 11,729 | ||||
| Amortization of right-of-use asset | 1,163 | 1,285 | ||||
| Decrease in fair value of warrants | (5,185) | (37,330) | ||||
| Decrease in fair value of SAFE notes | — | (209,291) | ||||
| Impairment of prepaid launch costs | — | 9,450 | ||||
| Litigation settlement, net | 4,500 | — | ||||
| Loss on disposal of fixed and intangible assets | 168 | 17 | ||||
| Stock-based compensation expense | 11,580 | 18,452 | ||||
| Changes in operating assets and liabilities: | ||||||
| Prepaids and other current assets | (2,206) | (14,373) | ||||
| Other non-current assets | (147) | (325) | ||||
| Accounts payable | 373 | 1,562 | ||||
| Accrued expenses | (1,540) | 7,042 | ||||
| Accrued interest | 131 | — | ||||
| Other current liabilities | (5,020) | 4,810 | ||||
| Contract liabilities | 1,126 | (1,071) | ||||
| Lease liability | (1,189) | (426) | ||||
| Other non-current liabilities | 23 | 11 | ||||
| Net cash used in operating activities | (87,887) | (86,712) | ||||
| Cash flows from investing activities: | ||||||
| Purchases of property, machinery and equipment | (583) | (2,972) | ||||
| Proceeds from sale of property, machinery and equipment | 34 | — | ||||
| Purchases of intangible assets | (184) | (118) | ||||
| Net cash used in investing activities | (733) | (3,090) | ||||
| 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 | 574 | 336 | ||||
| Proceeds from employee stock purchase plan | 271 | — | ||||
| Repurchase of Section 16 Officer shares for tax coverage exchange | (331) | (151) | ||||
| Payment of loan payable | (9,697) | (1,500) | ||||
| Payment of debt issuance costs | — | (144) | ||||
| Payment of warrant issuance costs | — | (31) | ||||
| Payment of deferred offering costs | (331) | — | ||||
| 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 | (9,514) | 226,829 | ||||
| (Decrease) Increase in cash, cash equivalents and restricted cash | (98,134) | 137,027 | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 160,547 | 23,520 | ||||
| Cash, cash equivalents and restricted cash, end of period | $ | 62,413 | $ | 160,547 | ||
| 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 | ||
| 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 | $ | 2,440 | $ | 2,500 |
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.
Full year adjusted EBITDA
A reconciliation of adjusted EBITDA to net loss for the years ended December 31, 2022 and December 31, 2021 is set forth below:
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||
| (in thousands) | |||||
| Net Income (Loss) | $ | (95,444) | $ | 120,654 | |
| Income tax expense | — | 2 | |||
| Interest income | (522) | (2) | |||
| Interest expense | 5,262 | 14,229 | |||
| Depreciation & amortization | 1,090 | 1,092 | |||
| EBITDA | (89,614) | 135,975 | |||
| (Decrease) increase in fair value of SAFE notes | — | (209,291) | |||
| (Decrease) increase in fair value of warrants | (5,185) | (37,330) | |||
| Realized loss on disposal of assets | 168 | 17 | |||
| SEC settlement | — | 7,000 | |||
| Litigation settlement, net | 4,500 | — | |||
| Transaction costs allocated to warrant liability | — | 4,780 | |||
| Investment banking fees related to SAFE financing | — | 175 | |||
| Prepaid launch deposit impairment | — | 9,450 | |||
| SEC and CFIUS legal expenses | 1,740 | 10,038 | |||
| Reduction in SEC and CFIUS legal expenses due to fee dispute resolution | — | (2,551) | |||
| Class action litigation legal expenses | 2,659 | 852 | |||
| Other non-recurring litigation legal expense | 1,736 | — | |||
| SEC compliance costs | 2,268 | 1,073 | |||
| NSA compliance costs | 2,530 | 1,835 | |||
| Severance and other non-recurring expenses | 421 | 136 | |||
| Stock-based compensation | 11,580 | 18,452 | |||
| Adjusted EBITDA | $ | (67,197) | $ | (59,389) |
A reconciliation of selling, general, and administrative expenses to non-GAAP selling, general, and administrative expenses for the years ended December 31, 2022 and December 31, 2021 is set forth below:
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||
| (in thousands) | |||||
| Selling, general, and administrative expenses | $ | 49,827 | $ | 48,905 | |
| Stock-based compensation | 9,446 | 16,111 | |||
| SEC and CFIUS legal expenses | 1,740 | 10,038 | |||
| Reduction in SEC and CFIUS legal expenses due to fee dispute resolution | — | (2,551) | |||
| Class action litigation legal expenses | 2,659 | 852 | |||
| Other non-recurring litigation legal expense | 1,736 | — | |||
| SEC compliance costs | 2,268 | 1,073 | |||
| NSA compliance costs | 2,530 | 1,835 | |||
| Severance and other non-recurring expenses | 155 | 63 | |||
| Non-GAAP selling, general, administration expenses | $ | 29,293 | $ | 21,484 |
A reconciliation of research and development expenses to non-GAAP research and development expenses for the years ended December 31, 2022 and December 31, 2021 is set forth below:
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||
| (in thousands) | |||||
| Research and development expenses | $ | 41,721 | $ | 51,321 | |
| Prepaid launch deposit impairment | — | 9,450 | |||
| Stock-based compensation | 2,134 | 2,341 | |||
| Severance and other non-recurring expenses | 388 | 74 | |||
| Non-GAAP Research and development expenses | $ | 39,199 | $ | 39,456 |
Quarterly adjusted EBITDA
A reconciliation of adjusted EBITDA to net loss for the three months ended December 31, 2022, December 31, 2021, and September 30, 2022, is set forth below:
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Three Months Ended September 30, 2022 | ||||||
| (in thousands) | ||||||||
| Net Income (Loss) | $ | (24,440) | $ | (2,729) | $ | (21,298) | ||
| Income tax expense | — | 1 | — | |||||
| Interest income | (489) | — | (28) | |||||
| Interest expense | 1,096 | 5,544 | 1,261 | |||||
| Depreciation & amortization | 259 | 324 | 253 | |||||
| EBITDA | (23,574) | 3,140 | (19,812) | |||||
| (Decrease) increase in fair value of warrants | (1,803) | (27,505) | (1,579) | |||||
| Realized loss on disposal of assets | 54 | 17 | 45 | |||||
| Litigation settlement, net | 4,500 | — | — | |||||
| SEC and CFIUS legal expenses | 161 | 464 | 279 | |||||
| Reduction in SEC and CFIUS legal expenses due to fee dispute | — | (2,551) | — | |||||
| Class action litigation legal expenses | 755 | 797 | 621 | |||||
| Other non-recurring litigation legal expense | 1,004 | — | 447 | |||||
| SEC compliance costs | 76 | 1,073 | 20 | |||||
| NSA compliance costs | 233 | 905 | 487 | |||||
| Severance and other non-recurring expenses1 | — | (13) | 90 | |||||
| Stock-based compensation | 3,044 | 7,265 | 3,289 | |||||
| Adjusted EBITDA | $ | (15,550) | $ | (16,408) | $ | (16,113) |
| 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 December 31, 2022, December 31, 2021, and September 30, 2022, is set forth below:
| (in thousands) | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Three Months Ended September 30, 2022 | ||||||
| Selling, general, and administrative expenses | $ | 10,929 | $ | 13,103 | $ | 11,184 | |||
| Stock-based compensation | 2,534 | 5,109 | 2,552 | ||||||
| SEC and CFIUS legal expenses | 161 | 464 | 279 | ||||||
| Reduction in SEC and CFIUS legal expenses due to fee dispute resolution | — | (2,551) | — | ||||||
| Class action litigation legal expenses | 755 | 797 | 621 | ||||||
| Other non-recurring litigation legal expense | 1,004 | — | 447 | ||||||
| SEC compliance costs | 76 | 1,073 | 20 | ||||||
| NSA compliance costs | 233 | 905 | 487 | ||||||
| Severance and other non-recurring expenses1 | — | (13) | 52 | ||||||
| Non-GAAP selling, general, administration expenses | $ | 6,166 | $ | 7,318 | $ | 6,726 |
| 1 | – | Loss contingencies for certain severance agreements were reversed when the Company determined they would not be signed and paid |
A reconciliation of research and development expenses to non-GAAP research and development expenses for the three months ended December 31, 2022, December 31, 2021, and September 30, 2022, is set forth below:
| (in thousands) | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | Three Months Ended September 30, 2022 | |||||
| Research and development expenses | $ | 10,283 | $ | 11,574 | $ | 10,571 | ||
| Stock-based compensation | 510 | 2,156 | 737 | |||||
| Severance and non-recurring expenses | — | — | 38 | |||||
| Non-GAAP Research and development expenses | $ | 9,773 | $ | 9,418 | $ | 9,796 |
| 1 | – | Loss contingencies for certain severance agreements were reversed when the Company determined they would not be signed and paid |
