Momentus Inc.

The following tables set forth our results of operations for the periods presented. The period-to-period comparisons of financial results are not necessarily indicative of future results.

Comparison of Financial Results for the Three Months Ended March 31, 2026 and 2025

Service revenue

Service revenue increased $2.9 million, from $0.3 million for three months ended March 31, 2025 to $3.2 million for the three months ended March 31, 2026. The increase was driven by two factors. First, the Company recognized $1.6 million of revenue from hosted payload services related to the Vigoride 7 mission during the three months ended March 31, 2026, compared to no hosted payload services revenue during three months ended March 31, 2025. Second, engineering project services revenue increased $1.4 million, from $0.2 million for the three months ended March 31, 2025, to $1.6 million for three months ended March 31, 2026, primarily due to expanded work for NASA and continued work under the DARPA NOM4D and DARPA BRIDGES programs. The remaining components of service revenue consist of forfeited customer deposits upon contract expiration, which were zero and $0.1 million for the three months ended March 31, 2026 and 2025, respectively.

Cost of revenue

Cost of revenue for the three months ended March 31, 2026, was primarily due to the launch cost allocated to customer payloads on the Vigoride 7 mission.

Research and development expenses

Research and development expenses increased from $1.9 million in the three months ended March 31, 2025, to $4.2 million in the three months ended March 31, 2026. The increase was primarily due to a $0.9 million increase in payroll costs, a $0.6 million increase in subcontractor costs, and a $0.9 million increase in other miscellaneous fees, such as information technology and facilities overhead allocation.

Selling, general and administrative expenses

Selling, general and administrative expenses increased from $4.6 million in the three months ended March 31, 2025, to $6.3 million in the three months ended March 31, 2026. The increase is primarily due to (i) an increase in legal expenses of $1.5 million, and (ii) a $0.6 million increase in other miscellaneous fees, such as insurance and subscriptions. These increases were partially offset by (i) a $0.2 million decrease in payroll related expenses and (ii) a decrease in consulting and professional services of $0.2 million.

Realized loss on disposal of assets

The increase in realized loss on disposal of assets for the three months ended March 31, 2026, was due to losses from the write-off of machinery and equipment. There was no loss on disposal recognized during the three months ended March 31, 2025.

Interest income

Interest income increased from $4 thousand for three months ended March 31, 2025, to $0.1 million for the three months ended March 31, 2026, as the Company invested more in money market funds.

Interest expense

Interest expense increased from $(0.2) million for the three months ended March 31, 2025, to $0.6 million for the three months ended March 31, 2026. The interest increase is primarily due to increase in cash interest accrual and amortization of the debt discount on the SIV Convertible Notes and the September 2025 Convertible Note, partially offset by amortization of the debt premium on the SIV Convertible Notes. See Note 8 for additional information.

Gain on debt extinguishment

The gain on extinguishment of debt recognized for the three months ended March 31, 2025, was due to the amendment of the SIV Convertible Notes. See Note 8 for additional information. There was no gain or loss on extinguishment recognized during the three months ended March 31, 2026.

Other income (expense)

Other income increased to $0.01 million during the three months ended March 31, 2026, from other expense of $0.2 million during the three months ended March 31, 2025, primarily due to resolution of a prior obligation of the Company.

Liquidity and Capital Resources

Capital Resources and Recent Financing Transactions

In prior periods, the Company disclosed that conditions and events raised substantial doubt regarding its ability to continue as a going concern. As described in Note 1 in the notes to our condensed consolidated interim financial statements included elsewhere in this Form 10-Q, management has concluded that the financings completed since December 31, 2025, including approximately $16.7 million of net cash provided by financing activities during the three months ended March 31, 2026, and the $5.0 million private placement completed subsequent to quarter-end, together with the Company's current cash position, expected operating plan, and forecasted liquidity needs, are sufficient to fund operations and meet obligations for at least the twelve-month period following the issuance date of these condensed consolidated interim financial statements. Accordingly, substantial doubt no longer exists.

The Company’s forecasts and operating plans are subject to risks and uncertainties as discussed above under Cautionary Note Regarding Forward-Looking Statements, and actual results could differ from management’s expectations.

Cash Flows

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2026, was $5.8 million, consisting primarily of headcount costs, research and development activities, legal expenses, and professional fees, as well as net cash changes in operating assets and liabilities.

Headcount related payroll costs, excluding stock-based compensation of $0.3 million, were $3.0 million. Professional fees of $3.1 million included $1.9 million in legal fees. Office overheads and other general corporate expenses were $2.2 million, which includes insurance costs of $0.3 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $0.9 million. These cash outflows were partially offset by gross profit of $1.8 million primarily related to the fulfillment of performance obligations for

Vigoride 7 customers during the three months ended March 31, 2026. Additionally, the Company had a change in operating assets and liabilities of $1.5 million during the three months ended March 31, 2026.

Net cash used in operating activities for the three months ended March 31, 2025, was $4.2 million, driven primarily by headcount costs, research and development activities, legal expenses, and professional fees, as well as net cash changes in operating assets and liabilities.

Headcount related payroll costs, excluding stock-based compensation of $1.1 million, were $1.6 million. Professional fees of $2.1 million included $0.4 million in legal fees. Office overheads and other general corporate expenses were $1.2 million, which includes insurance costs of $0.3 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $0.3 million. These cash outflows were partially offset by gross profit of $0.3 million primarily related to the fulfillment of performance obligations during the three months ended March 31, 2025. Additionally, the Company had a change in operating assets and liabilities of $0.9 million during the three months ended March 31, 2025.

Investing Activities

Net cash used in investing activities was $0.2 million for three months ended March 31, 2026, which consisted of purchases of machinery and equipment.

Financing Activities

Net cash provided by financing activities was $16.7 million for the three months ended March 31, 2026, primarily due to gross proceeds of approximately $18.3 million received shares sold under the ATM Sales Agreement and the January 2026 Offering. These gross proceeds were partially offset by (i) principal repayments of $0.8 million on the SIV Convertible Notes and the September 2025 Convertible Note and (ii) $0.8 million in issuance costs related to common stock and related warrants.

Net cash provided by financing activities was $6.0 million for the three months ended March 31, 2025, primarily due to gross proceeds of approximately (i) $5.0 million received from the February 2025 Offering and (ii) $2.1 million received from the March 2025 Warrant Inducement. These gross proceeds were partially offset by (i) principal repayments of $0.3 million under the SIV Convertible Notes, and (ii) $0.8 million in issuance costs related to common stock and related warrants.

Funding Requirements

We expect our cash consumption to continue in connection with our ongoing activities.

Specifically, our operating expenses will continue as we:

•continue to refine and operate our corporate infrastructure, people, processes and systems;

•pursue sales and marketing activities for our product and services;

•pursue further research and development related to developing our satellites and satellite technology;

•seek regulatory approvals for operation of our satellites and vehicles;

•actively manage our workforce, including right sizing in personnel;

•maintain, expand and protect our intellectual property portfolio;

•comply with public company reporting requirements; and

•defend against litigation.

Changing circumstances may cause us to expend capital significantly faster than we currently anticipate, or we may need to spend more money than currently expected because of circumstances beyond our control. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected.

Commitments and Contingencies

We are a party to leases primarily for facilities (e.g., office buildings, warehouses, and spaceport) under non‑cancellable operating leases. Refer to Note 6.

We enter into purchase obligations in the normal course of business. These obligations include purchase orders and agreements to purchase goods or services that are enforceable, legally binding, and have significant terms and minimum purchases stipulated. Refer to Note 12.

In addition, we enter into agreements in the normal course of business with vendors for research and development services and outsourced services, which are generally cancellable upon written notice.

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet activities or have any arrangements or relationships with unconsolidated entities, such as variable interest, special purpose, and structured finance entities.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated interim financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated interim financial statements and related disclosures requires us to make estimates, assumptions and judgments as of the balance sheet date that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Our actual results may differ from these estimates under different assumptions and conditions. In addition to our critical accounting policies below, see Note 2 in the notes to our condensed consolidated interim financial statements included elsewhere in this Form 10-Q.

Revenue Recognition

The Company enters into short-term contracts for ‘last-mile’ satellite and cargo delivery (transportation services), payload hosting and in-orbit servicing options with customers that are primarily in the aerospace industry. For its transportation service arrangements, the Company has a performance obligation of delivering the customers’ payload to its designated orbit and recognizes revenue (along with any other fees that have been paid) at a point in time, upon satisfaction of this performance obligation. Additionally, for its in-orbit service arrangements, the Company provides a multitude of services during the mission to its customers. The Company recognizes revenue for these in-orbit services ratably over time on a straight-line basis. The Company enters into contracts to perform services for U.S. government customers. The Company recognizes revenue for these services in accordance with the terms of these contracts.

We account for customer contracts in accordance with ASC Topic 606, which includes the following five‑step model:

•Identification of the contract, or contracts, with a customer.

•Identification of the performance obligations in the contract.

•Determination of the transaction price.

•Allocation of the transaction price to the performance obligations in the contract.

•Recognition of revenue when, or as, the Company satisfies a performance obligation.

The Company estimates variable consideration at the most likely amount, which is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur. While the Company’s standard contracts do not contain refund or recourse provisions that enable its customers to recover any non-refundable fees that have been paid, the Company may issue full or partial refunds, or concessions on future services to customers on a case-by-case basis as necessary to preserve and foster future business relationships and customer goodwill.

The Company’s satellite and cargo delivery services (transportation services) are considered a performance obligation, to transport the customers’ payload to a specified orbit in space. We recognize revenue for these services at a point in time, when control is transferred, which is considered to be upon the release of the customers’ payload into its specified orbit. We will calculate the weight distribution of each transfer vehicle at the customer level, and we will estimate the delivery date for each customer’s payload based on the relative weight of payloads released to determine the point in time to recognize revenue for each payload release.

The Company’s in-orbit services consist of a collection of interdependent and integrated services which are not considered distinct from one another and may vary depending on the specific needs of the Customer and mission. Revenue for these in-orbit services is recognized ratably over time on a straight line basis.

The Company’s engineering project services to U.S. government organizations generally have specific payment attached to each milestone. When a milestone is achieved, the Company submits services performed for approval. Once approval is received, the Company invoices and collects on the milestone completed.

In periods in which we recognize revenue, we will disclose the amounts of revenue recognized that was included as a contract liability balance at the beginning of the reporting period in accordance with ASC Sub‑Topic 606-10-50-8(b).

Loss Contingencies

We are subject to the possibility of various loss contingencies arising in the ordinary course of business, including product-related and other litigation. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted and whether new accruals are required. Refer to Note 12.

Deferred Fulfillment and Prepaid Launch Costs

We prepay for certain launch costs to third-party providers that will carry the OSV or satellite to orbit. Prepaid costs allocated to the delivery of a customer’s payload are classified as deferred fulfillment costs. Prepaid costs allocated to our payload are classified as prepaid launch costs. These costs are then recognized as cost of revenues upon release of the customer’s payload and our payload, respectively.

Contract Liabilities

Customer deposits collected prior to the release of the customer’s payload into its specified orbit are recorded as current and non-current contract liabilities in our condensed consolidated balance sheets as the amounts received represent a prepayment for the satisfaction of a future performance obligation that has not yet commenced. Some customer deposits are non-refundable. Each non-refundable deposit is determined to be a contract liability upon cash collection. Prior to making this determination, we ensure that a valid contract is in place that meets the definition of the existence of a contract in accordance with ASC Sub-Topic 606-10-25-1 and 2.

We have various stock incentive plans under which incentive and NSOs and RSAs are granted to employees, directors, and consultants. All stock-based payments to employees, including grants of employee stock options are recognized in the condensed consolidated interim financial statements based on their respective grant date fair values.

We recognize stock-based compensation expense using a fair value-based method for costs related to all stock-based payments. We estimate the fair value of stock-based payments on the date of grant using the Black-Scholes-Merton option pricing model (or “BSM”). The model requires management to make a number of assumptions, including expected volatility of our stock, expected life of the option, risk-free interest rate, and expected dividends. The fair value of the stock is expensed over the related service period which is typically the vesting period. The stock-based compensation expense that is reported in our condensed consolidated interim financial statements is based on awards that are expected to vest. We account for forfeitures as they occur.

Estimating the fair value of equity awards as of the grant date using valuation models, such as the BSM option pricing model, is affected by assumptions regarding a number of variables as disclosed above, and any changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop.

Debt and Equity Financings

We have entered into various debt and equity financing arrangements, including convertible promissory notes, warrants, pre-funded warrants, and an equity line of credit agreement. Accounting for these instruments requires significant management judgment, including the determination of whether warrants and embedded conversion options meet the criteria for equity classification or must be accounted for as liabilities. Certain warrants are accounted for as liabilities and are remeasured at fair value each reporting period using Level 3 valuation techniques, with changes in fair value recognized in the consolidated statements of operations. The fair value calculations involve assumptions regarding stock price volatility, expected term, and risk-free interest rates. Changes in these assumptions could materially affect the Company’s financial statements. Refer to Notes 8 and 9 to the condensed consolidated interim financial statements for additional information.

Income Taxes

We account for income taxes in accordance with authoritative guidance, which requires the use of the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed.

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, management considers all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies.

In the event that management changes its determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.

ASC Topic 740-10 requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any tax benefit can be recorded in the condensed consolidated interim financial statements. It also provides guidance on the recognition, measurement, classification and interest and penalties related to uncertain tax positions. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

Please refer to Note 2 in the notes to our condensed consolidated interim financial statements included elsewhere in this Form 10-Q for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, the timing of their adoptions and our assessment, to the extent we have made one, of their potential impact on our consolidated financial condition and results of operations.

We are exposed to a variety of market and other risks, including the effects of changes in interest rates, and inflation, as well as risks to the availability of funding sources, hazard events, and specific asset risks.

Interest Rate Risk

The market risk inherent in our financial instruments and our financial position represents the potential loss arising from adverse changes in interest rates. As of March 31, 2026, we had cash and cash equivalents of $23.5 million, which were primarily invested in highly liquid investments purchased with a remaining maturity of three months or less. However, due to the short-term maturities and the low-risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair value of our cash and cash equivalents.

Foreign Currency Risk

There were no material foreign currency transactions for the three months ended March 31, 2026 and 2025.