Momentus Inc

Previous wording

During the quarter ended June 30, 2024, the Company recognized $1.2 million of revenue, primarily from the completion of performance obligations on engineering services performed for U.S. government as well as some forfeited customer deposits upon contract expiration and engineering project services.

Current wording

During the quarter ended September 30, 2024, the Company recognized $0.1 million of revenue, primarily from the completion of performance obligations on engineering services performed for U.S. government and engineering project services.

Previous wording

As of June 30, 2024 we have signed contracts with customers and have collected approximately $1.1 million in customer deposits, $0.6 million of which are recorded as non-current contract liabilities in our condensed consolidated balance sheets.

Current wording

As of September 30, 2024 we have signed contracts with customers and have collected approximately $1.6 million in customer deposits, $1.1 million of which are recorded as non-current contract liabilities in our condensed consolidated balance sheets.

Previous wording

Cost of revenue consists primarily of expenses associated with third-party launch costs. Development of the orbital service vehicles is part of the Company’s technology roadmap. Therefore, to date, the cost of these orbital service vehicles has been expensed as research and development costs as materials and services are received. The current design and technology allow for a single use of the orbital service vehicle.

Current wording

Cost of revenue consists primarily of expenses associated with third-party launch costs and direct headcount cost related to the engineering project. Development of the orbital service vehicles is part of the Company’s technology roadmap. Therefore, to date, the cost of these orbital service vehicles has been expensed as research and development costs as materials and services are received. The current design and technology allow for a single use of the orbital service vehicle.

Previous wording

Research and development expenditures consist primarily of the cost of the following activities for developing existing and future technologies for our satellites, satellite technologies, and our Orbital Service Vehicles. Research and development activities include basic research, applied research, design, development, and related test program activities. Costs incurred for developing our technologies primarily include equipment, material, and labor hours (both internal and subcontractors). The Company also records launch costs related to the testing of its Vigoride vehicles as research and development costs.

Current wording

Research and development expenditures consist primarily of the cost of the following activities for developing existing and future technologies for our satellites, satellite technologies, and our Orbital Service Vehicles. Research and development activities include basic research, applied research, design, development, and related test program activities. Costs incurred for developing our technologies primarily include equipment, material, and labor hours

Previous wording

Realized loss on disposal of assets

Current wording

Realized loss on disposal of assets consists of disposals of machinery and equipment with carrying values in excess of proceeds received, if any.

Previous wording

The revenue recognized during the three months ended June 30, 2024 was primarily driven by engineering services in relation with fulfillment of performance obligations in SDA agreement. The Company recognized $1.2 million of revenue.

Current wording

During the three months ended September 30, 2024 The Company recognized$0.1 million of revenue, primarily driven by engineering services in relation to the fulfillment of performance obligations in the Defense Advanced Research Project Agency agreement (“DARPA Agreement”).

Previous wording

During thethree months ended June 30, 2023, the Company recognized $1.7 million of revenue, primarily from the completion of performance obligation in connection with the Vigoride 5 and Vigoride 6 missions as well as some forfeited customer deposits upon contract expiration.

Current wording

During thethree months ended September 30, 2023, the Company recognized $0.3 million of revenue, primarily from the completion of performance obligation in connection with the Vigoride 5 and Vigoride 6 missions as well as some forfeited customer deposits upon contract expiration.

Previous wording

Research and development expenses decreased from $10.2 million in the three months ended June 30, 2023 to $2.9 million in the three months ended June 30, 2024. The decrease was mostly headcount driven whereas payroll related cost went down by a $3.0 million including a decrease of $0.4 million in non-cash stock based compensation. Subcontractor costs and other overhead costs also decreased by $1.8 million and $1.4 million, respectively. Additionally, there was a $1.0 million decrease in spending on materials and a $0.1 million decrease in information technology and facilities expense.

Current wording

Research and development expenses decreased from $6.0 million in the three months ended September 30, 2023 to $2.2 million in the three months ended September 30, 2024. The decrease was mostly headcount driven whereas payroll related cost went down by a $2.5 million including a decrease of $0.2 million in non-cash stock based compensation. Subcontractor costs decreased by $1.0 million. Additionally, there was a $0.1 million decrease in spending on materials and a $0.1 million decrease in information technology and facilities expense.

Previous wording

Selling, general and administrative expenses decreased from $10.0 million in the three months ended June 30, 2023 to $5.3 million in the three months ended June 30, 2024. Payroll costs decreased by $1.8 million inclusive of a decrease of $0.5 million in non-cash stock based compensation. NSA compliance spending decreased by $0.4 million and SEC and legal services expenses decreased by $1.6 million. Consulting and other professional services and other general corporate expenses decreased by $0.8 million and $0.1 million, respectively.

Current wording

Selling, general and administrative expenses decreased from $9.3 million in the three months ended September 30, 2023 to $5.4 million in the three months ended September 30, 2024. Payroll costs decreased by $1.2 million inclusive of a decrease of $0.3 million in non-cash stock based compensation. NSA compliance spending decreased by $0.2 million and SEC and legal services expenses decreased by $1.7 million. Consulting and other professional services and other general corporate expenses decreased by $0.7 million and $0.1 million, respectively.

Previous wording

For both the three months ended June 30, 2024 and 2023, the decrease of $0.5 million in the calculated fair value of the Company’s outstanding warrants, which were assumed from the Business Combination, was primarily driven by the observable market price of the publicly listed warrants to purchase the Company’s stock under comparable terms. See Note 9 for additional information.

Current wording

For both the three months ended September 30, 2024 and 2023, the decrease of $0.2 million in the calculated fair value of the Company’s outstanding warrants, which were assumed from the Business Combination, was primarily driven by the observable market price of the publicly listed warrants to purchase the Company’s stock under comparable terms. See Note 9 for additional information.

Previous wording

Realized loss on disposal of assets in the six months ended June 30, 2024 and 2023, was immaterial.

Current wording

Realized loss on disposal of assets in the three months ended September 30, 2024 was $0.1 million while in 2023, was zero.

Previous wording

Interest income decreased from $0.4 million for three months ended June 30, 2023 to $4 thousand for the three months ended June 30, 2024 as the Company invested less money market funds given liquidity constrains.

Current wording

Interest income decreased from $0.2 million for three months ended September 30, 2023 to $2 thousand for the three months ended September 30, 2024 as the Company invested less money market funds given liquidity constrains.

Previous wording

Interest expense decreased from $0.7 million of cash and amortization interest for the three months ended June 30, 2023 to $0 interest for the three months ended June 30, 2024 due to the application of the effective interest method which results in less cash and amortization interest as the Term Loan approaches maturity. See Note 8 for additional information.

Current wording

Interest expense decreased from $0.5 million of cash and amortization interest for the three months ended September 30, 2023 to $42,500 interest for the three months ended September 30, 2024 due to the application of the effective interest method which results in less cash and amortization interest as the Term Loan approaches maturity. See Note 8 for additional information.

Previous wording

Comparison of Financial Results for the Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of Financial Results for the Nine Months Ended September 30, 2024 and 2023

Previous wording

The revenue recognized during the six months ended June 30, 2024 was primarily driven by engineering services performed for Space Development Agency agreement resulting in revenue recognition as well as $1.7 million of engineering services for the Space Development Agency.

Current wording

Revenue recognized during the nine months ended September 30, 2024 was primarily driven by engineering services performed for the Space Development Agency agreement, resulting in $1.8 million of revenue recognition.

Previous wording

The revenue recognized during the six months ended June 30, 2023 was primarily driven by fulfillment of performance obligations for Vigoride 5 and Vigoride 6 customers, resulting in $1.3 million of revenue recognition. The remaining $0.4 million of revenue recognized was a combination of customer deposit forfeiture upon contract expiration and the launch of one customer payload through another supplier on the SpaceX Transporter 8 mission.

Current wording

The revenue recognized during the nine months ended September 30, 2023 was primarily driven by fulfillment of performance obligations for Vigoride 5 and Vigoride 6 customers, resulting in $1.6 million of revenue recognition. The remaining $0.5 million of revenue recognized was a combination of customer deposit forfeiture upon contract expiration and the launch of one customer payload through another supplier on the SpaceX Transporter 8 mission.

Previous wording

The costs associated with performing engineering service were expensed in research and development operating expenses during the three months ended June 30, 2024.

Current wording

The costs associated with performing engineering service were expensed in research and development operating expenses during nine months ended September 30, 2024 except for the cost associated with the on-going DARPA Agreement of $0.1 million were classed to cost of revenue.

Previous wording

The cost of revenue during the six months ended June 30, 2023 consists primarily of expenses associated with the cost of the orbital service vehicle and third-party launch costs. Until the orbital service vehicle design is completed and released for production, the cost of these orbital service vehicles is being expensed as research and development costs as materials and services are received. The current design and technology allow for a single use of the orbital service vehicle.

Current wording

The cost of revenue during the nine months ended September 30, 2023 consists primarily of expenses associated with the cost of the orbital service vehicle and third-party launch costs. Until the orbital service vehicle design is completed and released for production, the cost of these orbital service vehicles is being expensed as research and development costs as materials and services are received. The current design and technology allow for a single use of the orbital service vehicle.

Previous wording

Research and development expenses decreased from $20.3 million in the six months ended June 30, 2023 to $5.5 million in the six months ended June 30, 2024. The decrease was primarily due to (i) a $6.1 million reduction in payroll costs due to decreased headcount and related decreases in signing bonuses (ii) a $3.9 million reduction on subcontractor cost, (iii) a $2.0 million reduction in spending on materials and components, (iv) decreases in launch costs of $1.9 million associated with impairment of our Space X and ABL deposits, and amortization of the Vigoride 5 and Vigoride 6 missions, (v) a $0.4 million reduction in allocated information technology and facilities expenses, and (vi) a $0.4 million decrease in other overhead costs.

Current wording

Research and development expenses decreased from $26.3 million in the nine months ended September 30, 2023 to $7.7 million in the nine months ended September 30, 2024. The decrease was primarily due to (i) a $8.6 million reduction in payroll costs due to decreased headcount and related decreases in signing bonuses (ii) a $4.8 million reduction on subcontractor cost, (iii) a $2.1 million reduction in spending on materials and components, (iv) decreases in launch costs of $1.9 million associated with impairment of our Space X and ABL deposits, and amortization of the Vigoride 5 and Vigoride 6 missions, (v) a $0.6 million reduction in allocated information technology and facilities expenses, and (vi) a $0.5 million decrease in other overhead costs.

Previous wording

Selling, general and administrative expenses decreased from $20.3 million in the six months ended June 30, 2023 to $11.5 million in the six months ended June 30, 2024. The decrease is primarily due to (i) a $2.5 million decrease in payroll related expenses inclusive $0.2 million of stock based compensation. The decrease was primarily due to prior year one-time bonuses and executive departures temporarily replaced by consultants (ii) a $2.3 million decrease in legal services expenses followed by (iii) a $0.9 million decrease in NSA compliance spending and (iv) a $0.4 million decrease in SEC compliance spending as the Company’s activity related to the NSA and SEC topics discussed in Note 12 shifted from legal proceedings to compliance. (v) Non legal professional fees decreased by $2.0 million and other general corporate office expenses (including insurance costs) decreased by $0.8 million partially offset by a $0.1 million increase in IT overhead costs.

Current wording

Selling, general and administrative expenses decreased from $29.6 million in the nine months ended September 30, 2023 to $16.9 million in the nine months ended September 30, 2024. The decrease is primarily due to (i) a $3.8 million decrease in payroll related expenses inclusive $0.4 million of stock based compensation. Factors contributing to the decrease was primarily due to prior year one-time bonuses and executive departures temporarily replaced by consultants (ii) a $3.2 million decrease in legal services expenses followed by (iii) a $1.1 million decrease in NSA compliance spending and (iv) a $1.2 million decrease in SEC compliance spending as the Company’s activity related to the NSA and SEC topics discussed in Note 12 shifted from legal proceedings to compliance. (v) Non legal professional fees decreased by $2.3 million and other general corporate office expenses (including insurance costs) decreased by $1.3 million partially offset by a $0.2 million increase in IT overhead costs.

Previous wording

For the six months ended June 30, 2023, the decrease in the calculated fair value of the Company’s currently outstanding warrants, which were assumed from the Business Combination, was primarily driven by the observable market price of the publicly listed warrants to purchase the Company’s stock under comparable terms. See Note 9 for additional information.

Current wording

For the nine months ended September 30, 2023, the decrease in the calculated fair value of the Company’s currently outstanding warrants, which were assumed from the Business Combination, was primarily driven by the observable market price of the publicly listed warrants to purchase the Company’s stock under comparable terms. See Note 9 for additional information.

Previous wording

Realized loss on disposal of assets in the three months ended June 30, 2024 and 2023, was immaterial.

Current wording

Realized loss on disposal of assets in the nine months ended September 30, 2024 was $0.2 million while 2023, was immaterial.

Previous wording

Interest income decreased from $0.9 million for six months ended June 30, 2023 to $22 thousand for the six months ended June 30, 2024 as the Company invested less in money market funds due to liquidity constrains.

Current wording

Interest income decreased from $1.1 million for nine months ended September 30, 2023 to $24 thousand for the nine months ended September 30, 2024 as the Company invested less in money market funds due to liquidity constrains.

Previous wording

Interest expense decreased from $1.7 million of cash and amortization interest for the six months ended June 30, 2023 to $0.1 million of cash and amortization interest for the six months ended June 30, 2024 due to the application of the effective interest method which results in less cash and amortization interest as the Term Loan approaches maturity. See Note 8 for additional information.

Current wording

Interest expense decreased from $2.2 million of cash and amortization interest for the nine months ended September 30, 2023 to $0.1 million of cash and amortization interest for the nine months ended September 30, 2024 due to the application of the effective interest method which results in less cash and amortization interest as the Term Loan approaches maturity. See Note 8 for additional information.

Previous wording

Other income increased from $20.0 thousand for the six months ended June 30, 2023 to $0.1 million six months ended June 30, 2024. The increase was related to the release of interest accrued in relation to the loan during 2023.

Current wording

Other income increased from $20 thousand for the nine months ended September 30, 2023 to $0.1 million nine months ended September 30, 2024. The increase was related to the release of interest accrued in relation to the loan during 2023.

Previous wording

The Company’s ability to continue as a going concern is dependent on the Company’s ability to successfully raise capital to fund its business operations and execute on its business plan. To date, the Company has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally and the Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern. This is reflected by the Company’s incurred net losses of $15.3 million for the six months ended June 30, 2024 and had an accumulated deficit of $388.4 million as of June 30, 2024. Additionally, the Company used net cash of $6.4 million to fund its operating activities for the six months ended June 30, 2024, and had cash and cash equivalents of $0.9 million as of June 30, 2024.

Current wording

The Company’s ability to continue as a going concern is dependent on the Company’s ability to successfully raise capital to fund its business operations and execute on its business plan. To date, the Company has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally and the Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern. This is reflected by the Company’s incurred net losses of $23.1 million for the nine months ended September 30, 2024 and had an accumulated deficit of $396.1 million as of September 30, 2024. Additionally, the Company used net cash of $10.9 million to fund its operating activities for the nine months ended September 30, 2024, and had cash and cash equivalents of $0.8 million as of September 30, 2024.

Previous wording

In connection with the preparation of the consolidated interim financial statements for the six months ended June 30, 2024, management conducted an evaluation and concluded that there were conditions and events, considered in the aggregate, which raised substantial doubt as to the Company’s ability to continue as a going concern within twelve months after the date of the issuance of such financial statements. The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and sale of its services and products. These conditions raise substantial doubt regarding its ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated interim financial statements. In order to proceed with the Company’s business plan and operating strategy, the Company will need to raise substantial additional capital to fund its operations. Until such time, if ever, the Company can generate revenues sufficient to achieve profitability, the Company expects to finance its operations through equity or debt financings, which may not be available to the Company on the timing needed or on terms that the Company deems to be favorable. In an effort to alleviate these conditions, the Company continues to seek and evaluate opportunities to access additional capital through all available means.

Current wording

In connection with the preparation of the consolidated interim financial statements for the nine months ended September 30, 2024, management conducted an evaluation and concluded that there were conditions and events, considered in the aggregate, which raised substantial doubt as to the Company’s ability to continue as a going concern within twelve months after the date of the issuance of such financial statements. The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and sale of its services and products. These conditions raise substantial doubt regarding its ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated interim financial statements. In order to proceed with the Company’s business plan and operating strategy, the Company will need to raise substantial additional capital to fund its operations. Until such time, if ever, the Company can generate revenues sufficient to achieve profitability, the Company expects to finance its operations through equity or debt financings, which may not be available to the Company on the timing needed or on terms that the Company deems to be favorable. In an effort to alleviate these conditions, the Company continues to seek and evaluate opportunities to access additional capital through all available means.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2024 was $6.4 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.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $10.9 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.

Previous wording

Headcount related payroll costs, excluding stock-based compensation of $3.2 million, were $5.2 million. Professional fees of $3.4 million included $1.9 million in legal fees and $11.9 thousand of costs related to the SEC and NSA topics discussed in Note 12. Office overheads and other general corporate expenses were $3.1 million, which includes insurance costs of $1.0 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $1.1 million. These cash outflows were partially offset by gross profit of $1.7 million primarily related to the fulfillment of performance obligations for Vigoride 5 and Vigoride 6 customers during the six months ended June 30, 2024. Additionally, the Company had a change in operating assets and liabilities of $4.7 million during the six months ended June 30, 2024.

Current wording

Headcount related payroll costs, excluding stock-based compensation of $4.9 million, were $7.3 million. Professional fees of $5.1 million included $2.6 million in legal fees discussed in Note 12. Office overheads and other general corporate expenses were $4.4 million, which includes insurance costs of $1.3 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $1.5 million. These cash outflows were partially offset by gross profit of $1.8 million primarily related to the fulfillment of performance obligations for Vigoride 5 and Vigoride 6 customers during the nine months ended September 30, 2024. Additionally, the Company had a change in operating assets and liabilities of $5.6 million during the nine months ended September 30, 2024.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2023 was $33.2 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 accrued bonus of $1.7 million and stock-based compensation of $4.3 million, were $5.5 million. Research and development activity expenses, including materials, components, and subcontractor costs were $3.6 million. Professional fees of $4.9 million included $0.6 million of costs related to the SEC and NSA topics discussed in Note 12 and legal fees of $2.4 million. Office overheads, other general corporate expenses, and cash interest were $2.0 million, which includes insurance costs of $0.8 million. The Company also incurred launch costs of $0.5 million during the six months ended June 30, 2023, that were amortized in connection with its first launch. The Company additionally had change in cash from changes in operating assets and liabilities of $0.1 million.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2023 was $46.0 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 accrued bonus of $2.6 million and stock-based compensation of $6.5 million, were $5.5 million. Research and development activity expenses, including materials, components, and subcontractor costs were $3.6 million. Professional fees of $4.9 million included $0.6 million of costs related to the SEC and NSA topics discussed in Note 12 and legal fees of $2.4 million. Office overheads, other general corporate expenses, and cash interest were $1.5 million, which includes insurance costs of $0.8 million. The Company also incurred launch costs of $0.5 million during the nine months ended September 30, 2023, that were amortized in connection with its first launch. The Company additionally had change in cash from changes in operating assets and liabilities of $0.9 million.

Previous wording

Net cash used in investing activities was $39.9 thousand and $14.7 thousand for the six months ended June 30, 2024 and 2023, respectively, which consisted of purchases of machinery and equipment and intangible assets and proceeds received on the sale of machinery and equipment.

Current wording

Net cash used in investing activities was $94 thousand and $7 thousand for the nine months ended September 30, 2024 and 2023, respectively, which consisted of purchases of machinery and equipment and intangible assets and proceeds received on the sale of machinery and equipment.

Previous wording

Net cash provided by financing activities was $5.2 million for the six months ended June 30, 2024, primarily due to gross proceeds of approximately $8.0 million received from the January Offering and March Offering, partially offset by principal repayments of $2.3 million under the Term Loan and $0.8 million in issuance costs related to common stock and related warrants.

Current wording

Net cash provided by financing activities was $9.6 million for the nine months ended September 30, 2024, primarily due to gross proceeds of approximately $10.8 million received from the January Offering and March Offering, and $$2.3 million received from SIV partially offset by principal repayments of $2.3 million under the Term Loan and $1.1 million in issuance costs related to common stock and related warrants.

Previous wording

Net cash used in financing activities was $7.0 million for the six months ended June 30, 2023, primarily due to principal repayment under the Term Loan.

Current wording

Net cash used in financing activities was $5.9 million for the nine months ended September 30, 2023, primarily due to principal repayment under the Term Loan.

Previous wording

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 June 30, 2024, we had cash and cash equivalents of $0.9 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 market value of our cash and cash equivalents.

Current wording

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 September 30, 2024, we had cash and cash equivalents of $0.8 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 market value of our cash and cash equivalents.

Previous wording

There were no material foreign currency transactions for the three and six months ended June 30, 2024. Currently, a significant portion of our cash receipts and expenses are generated in U.S. dollars.

Current wording

There were no material foreign currency transactions for the three and nine months ended September 30, 2024. Currently, a significant portion of our cash receipts and expenses are generated in U.S. dollars.