mnts-20230930
00017811622023Q3falseDecember 31http://fasb.org/us-gaap/2023#ServiceMemberhttp://fasb.org/us-gaap/2023#ServiceMemberhttp://fasb.org/us-gaap/2023#ServiceMemberhttp://fasb.org/us-gaap/2023#ServiceMember0.20.2663300017811622023-01-012023-09-300001781162us-gaap:CommonClassAMember2023-01-012023-09-300001781162us-gaap:WarrantMember2023-01-012023-09-3000017811622023-11-10xbrli:shares00017811622023-09-30iso4217:USD00017811622022-12-31iso4217:USDxbrli:shares00017811622023-07-012023-09-3000017811622022-07-012022-09-3000017811622022-01-012022-09-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001781162us-gaap:AdditionalPaidInCapitalMember2022-12-310001781162us-gaap:RetainedEarningsMember2022-12-310001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001781162us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-3100017811622023-01-012023-03-310001781162us-gaap:RetainedEarningsMember2023-01-012023-03-310001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-03-310001781162us-gaap:AdditionalPaidInCapitalMember2023-03-310001781162us-gaap:RetainedEarningsMember2023-03-3100017811622023-03-310001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-04-012023-06-300001781162us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-3000017811622023-04-012023-06-300001781162us-gaap:CommonClassAMember2023-04-012023-06-300001781162us-gaap:RetainedEarningsMember2023-04-012023-06-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-06-300001781162us-gaap:AdditionalPaidInCapitalMember2023-06-300001781162us-gaap:RetainedEarningsMember2023-06-3000017811622023-06-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-07-012023-09-300001781162us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001781162us-gaap:CommonClassAMember2023-07-012023-09-300001781162us-gaap:RetainedEarningsMember2023-07-012023-09-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-09-300001781162us-gaap:AdditionalPaidInCapitalMember2023-09-300001781162us-gaap:RetainedEarningsMember2023-09-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-12-310001781162us-gaap:AdditionalPaidInCapitalMember2021-12-310001781162us-gaap:RetainedEarningsMember2021-12-3100017811622021-12-310001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-01-012022-03-310001781162us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100017811622022-01-012022-03-310001781162us-gaap:RetainedEarningsMember2022-01-012022-03-310001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-03-310001781162us-gaap:AdditionalPaidInCapitalMember2022-03-310001781162us-gaap:RetainedEarningsMember2022-03-3100017811622022-03-310001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-04-012022-06-300001781162us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-3000017811622022-04-012022-06-300001781162us-gaap:CommonStockMember2022-04-012022-06-300001781162us-gaap:RetainedEarningsMember2022-04-012022-06-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-06-300001781162us-gaap:AdditionalPaidInCapitalMember2022-06-300001781162us-gaap:RetainedEarningsMember2022-06-3000017811622022-06-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-07-012022-09-300001781162us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001781162us-gaap:RetainedEarningsMember2022-07-012022-09-300001781162us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-09-300001781162us-gaap:AdditionalPaidInCapitalMember2022-09-300001781162us-gaap:RetainedEarningsMember2022-09-3000017811622022-09-3000017811622022-05-25mnts:satellite00017811622023-01-03mnts:payloadmnts:patent00017811622023-04-150001781162srt:ScenarioForecastMember2023-12-31mnts:spacecraftmnts:mission00017811622021-08-122021-08-120001781162us-gaap:SubsequentEventMemberus-gaap:CommonClassAMember2023-09-112023-10-040001781162us-gaap:CommonClassAMember2023-08-222023-08-22xbrli:pure0001781162mnts:CashDesignatedForCollateralMember2023-09-300001781162mnts:CashDesignatedForExpendituresUnderNationalSecurityAgreementMember2023-09-300001781162us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-09-300001781162us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-12-310001781162us-gaap:OtherNoncurrentAssetsMember2023-09-300001781162us-gaap:OtherNoncurrentAssetsMember2022-12-310001781162us-gaap:ComputerEquipmentMember2023-09-300001781162us-gaap:FurnitureAndFixturesMember2023-09-300001781162us-gaap:LeaseholdImprovementsMembersrt:MinimumMember2023-09-300001781162us-gaap:LeaseholdImprovementsMembersrt:MaximumMember2023-09-300001781162us-gaap:MachineryAndEquipmentMember2023-09-300001781162us-gaap:PatentsMember2023-09-3000017811622022-01-012022-12-310001781162mnts:TransportationServicesMember2023-07-012023-09-300001781162mnts:TransportationServicesMember2022-07-012022-09-300001781162mnts:TransportationServicesMember2023-01-012023-09-300001781162mnts:TransportationServicesMember2022-01-012022-09-300001781162mnts:HostedPayloadServicesMember2023-07-012023-09-300001781162mnts:HostedPayloadServicesMember2022-07-012022-09-300001781162mnts:HostedPayloadServicesMember2023-01-012023-09-300001781162mnts:HostedPayloadServicesMember2022-01-012022-09-300001781162mnts:ForfeitedCustomerDepositsMember2023-07-012023-09-300001781162mnts:ForfeitedCustomerDepositsMember2022-07-012022-09-300001781162mnts:ForfeitedCustomerDepositsMember2023-01-012023-09-300001781162mnts:ForfeitedCustomerDepositsMember2022-01-012022-09-300001781162us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001781162us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMemberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-09-300001781162us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001781162us-gaap:FairValueInputsLevel3Membermnts:ShareRepurchaseLiabilityMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001781162us-gaap:FairValueInputsLevel3Membermnts:ShareRepurchaseLiabilityMemberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-09-300001781162us-gaap:FairValueInputsLevel3Membermnts:ShareRepurchaseLiabilityMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001781162us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001781162us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-09-300001781162us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001781162us-gaap:MeasurementInputExpectedTermMember2023-09-300001781162us-gaap:MeasurementInputOptionVolatilityMember2023-09-300001781162us-gaap:MeasurementInputRiskFreeInterestRateMember2023-09-300001781162us-gaap:MeasurementInputExpectedDividendRateMember2023-09-300001781162mnts:PrivatePlacementWarrantMember2023-09-300001781162mnts:PublicWarrantMember2023-09-300001781162mnts:PublicWarrantMember2021-08-122021-08-120001781162mnts:PrivatePlacementWarrantMember2021-08-120001781162us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001781162us-gaap:EmployeeStockMember2023-01-012023-09-30mnts:service_linemnts:segment0001781162us-gaap:ComputerEquipmentMember2022-12-310001781162us-gaap:LeaseholdImprovementsMember2023-09-300001781162us-gaap:LeaseholdImprovementsMember2022-12-310001781162us-gaap:MachineryAndEquipmentMember2022-12-310001781162us-gaap:ConstructionInProgressMember2023-09-300001781162us-gaap:ConstructionInProgressMember2022-12-310001781162us-gaap:IntellectualPropertyMember2023-09-300001781162us-gaap:IntellectualPropertyMember2022-12-3100017811622021-01-3100017811622021-12-30mnts:lease0001781162mnts:TermLoanMember2021-02-220001781162mnts:TermLoanMember2021-02-222021-02-220001781162mnts:TermLoanMember2023-09-300001781162mnts:TermLoanMember2023-07-012023-09-300001781162mnts:TermLoanMember2023-01-012023-09-300001781162mnts:TermLoanMember2022-07-012022-09-300001781162mnts:TermLoanMember2022-01-012022-09-3000017811622021-08-130001781162us-gaap:CommonClassAMember2021-08-130001781162us-gaap:PreferredStockMember2021-08-130001781162us-gaap:CommonClassAMember2023-09-072023-09-070001781162us-gaap:CommonClassAMember2023-09-070001781162mnts:PrefundedWarrantsMember2023-09-070001781162mnts:SeriesAWarrantsMember2023-09-070001781162mnts:SeriesBWarrantsMember2023-09-070001781162mnts:FebruaryClassAWarrantsMember2023-09-0700017811622023-09-072023-09-070001781162mnts:PrefundedWarrantsMember2023-09-072023-09-070001781162mnts:SeriesBWarrantsMember2023-09-072023-09-070001781162mnts:SeriesAWarrantsMember2023-09-110001781162mnts:SeriesBWarrantsMember2023-09-110001781162mnts:SeriesAWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-110001781162mnts:SeriesBWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-110001781162mnts:SeriesAWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-09-110001781162us-gaap:MeasurementInputRiskFreeInterestRateMembermnts:SeriesBWarrantsMember2023-09-110001781162mnts:SeriesAWarrantsMemberus-gaap:MeasurementInputExpectedDividendRateMember2023-09-110001781162us-gaap:MeasurementInputExpectedDividendRateMembermnts:SeriesBWarrantsMember2023-09-110001781162mnts:FebruaryClassAWarrantsMember2023-02-230001781162mnts:FebruaryClassAWarrantsMember2023-09-112023-09-110001781162mnts:FebruaryClassAWarrantsMember2023-09-100001781162mnts:FebruaryClassAWarrantsMember2023-09-110001781162mnts:FebruaryClassAWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-100001781162mnts:FebruaryClassAWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-110001781162us-gaap:MeasurementInputRiskFreeInterestRateMembermnts:FebruaryClassAWarrantsMember2023-09-100001781162us-gaap:MeasurementInputRiskFreeInterestRateMembermnts:FebruaryClassAWarrantsMember2023-09-110001781162us-gaap:MeasurementInputExpectedDividendRateMembermnts:FebruaryClassAWarrantsMember2023-09-100001781162us-gaap:MeasurementInputExpectedDividendRateMembermnts:FebruaryClassAWarrantsMember2023-09-110001781162us-gaap:CommonStockMember2023-02-232023-02-230001781162us-gaap:CommonStockMember2023-02-230001781162us-gaap:WarrantMembermnts:PrefundedWarrantsMember2023-04-012023-06-300001781162us-gaap:WarrantMembermnts:PrefundedWarrantsMember2023-02-230001781162us-gaap:CommonStockMembermnts:PrefundedWarrantsMember2023-02-232023-02-230001781162us-gaap:WarrantMemberus-gaap:CommonClassAMember2023-02-230001781162mnts:FebruaryClassAWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-02-230001781162us-gaap:MeasurementInputRiskFreeInterestRateMembermnts:FebruaryClassAWarrantsMember2023-02-230001781162us-gaap:MeasurementInputExpectedDividendRateMembermnts:FebruaryClassAWarrantsMember2023-02-2300017811622021-06-300001781162mnts:ConsiderationFromFundsLegallyAvailableMember2021-06-3000017811622021-06-302021-06-3000017811622023-02-272023-02-270001781162mnts:OtherWarrantsMember2022-09-300001781162mnts:OtherWarrantsMemberus-gaap:WarrantMemberus-gaap:CommonClassAMember2023-02-272023-02-270001781162mnts:OtherWarrantsMemberus-gaap:WarrantMemberus-gaap:CommonClassAMember2023-09-112023-09-110001781162mnts:PrivateWarrantMember2023-07-012023-09-300001781162mnts:PrivateWarrantMember2023-01-012023-09-300001781162mnts:PrivateWarrantMember2022-07-012022-09-300001781162mnts:PrivateWarrantMember2022-01-012022-09-300001781162mnts:ContingentSponsorEarnoutSharesMemberus-gaap:CommonClassAMember2021-08-132021-08-130001781162mnts:ContingentSponsorEarnoutSharesMemberus-gaap:CommonClassAMembermnts:WeightedAverageClosingPriceTrancheOneMember2021-08-130001781162mnts:ContingentSponsorEarnoutSharesMembermnts:WeightedAverageClosingPriceTrancheTwoMemberus-gaap:CommonClassAMember2021-08-130001781162mnts:WeightedAverageClosingPriceTrancheThreeMembermnts:ContingentSponsorEarnoutSharesMemberus-gaap:CommonClassAMember2021-08-130001781162mnts:ATMSalesAgreementMember2022-09-282022-09-280001781162mnts:ATMSalesAgreementMember2022-09-280001781162mnts:ATMSalesAgreementMember2023-01-012023-09-300001781162mnts:A2021EquityIncentivePlanMember2021-08-120001781162mnts:A2021EquityIncentivePlanMember2021-08-122021-08-120001781162mnts:EvergreenPlanMember2023-01-012023-09-300001781162mnts:LegacyStockPlanMember2023-01-012023-09-300001781162mnts:A2021EquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-09-300001781162mnts:A2021EmployeeStockPurchasePlanMember2021-08-120001781162mnts:A2021EmployeeStockPurchasePlanMember2021-08-122021-08-120001781162mnts:A2021EmployeeStockPurchasePlanMember2023-01-012023-09-300001781162mnts:A2021EmployeeStockPurchasePlanMember2023-09-300001781162mnts:A2022InducementEquityPlanMember2022-02-280001781162mnts:A2022InducementEquityPlanMember2022-02-012022-02-280001781162mnts:A2022InducementEquityPlanMember2023-02-280001781162mnts:A2022InducementEquityPlanMember2023-03-210001781162mnts:A2022InducementEquityPlanMember2023-03-220001781162mnts:A2022InducementEquityPlanMember2023-05-080001781162mnts:A2022InducementEquityPlanMember2023-09-300001781162us-gaap:EmployeeStockOptionMember2023-09-300001781162us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001781162mnts:RestrictedStockUnitsAndRestrictedStockAwardsMember2022-12-310001781162mnts:RestrictedStockUnitsAndRestrictedStockAwardsMember2023-01-012023-09-300001781162mnts:RestrictedStockUnitsAndRestrictedStockAwardsMember2023-09-300001781162us-gaap:RestrictedStockUnitsRSUMember2023-09-300001781162mnts:OutstandingVestedAndExpectedToVestRSUsMember2023-09-300001781162us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001781162us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001781162us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001781162us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001781162us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-07-012023-09-300001781162us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300001781162us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-09-300001781162us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300001781162us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001781162us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001781162us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001781162mnts:RestrictedStockUnitsAndRestrictedStockAwardsMember2023-07-012023-09-300001781162mnts:RestrictedStockUnitsAndRestrictedStockAwardsMember2022-07-012022-09-300001781162mnts:RestrictedStockUnitsAndRestrictedStockAwardsMember2022-01-012022-09-300001781162us-gaap:EmployeeStockMember2023-07-012023-09-300001781162us-gaap:EmployeeStockMember2022-07-012022-09-300001781162us-gaap:EmployeeStockMember2022-01-012022-09-300001781162us-gaap:PerformanceSharesMember2023-07-012023-09-300001781162us-gaap:PerformanceSharesMember2022-07-012022-09-300001781162us-gaap:PerformanceSharesMember2023-01-012023-09-300001781162us-gaap:PerformanceSharesMember2022-01-012022-09-300001781162us-gaap:PerformanceSharesMember2023-09-300001781162us-gaap:ShareBasedPaymentArrangementNonemployeeMember2023-01-012023-03-310001781162us-gaap:ShareBasedPaymentArrangementNonemployeeMember2023-01-012023-09-300001781162us-gaap:ShareBasedPaymentArrangementNonemployeeMember2023-01-012023-06-300001781162us-gaap:ShareBasedPaymentArrangementNonemployeeMember2023-07-012023-09-300001781162mnts:ShareBasedPaymentArrangementOptionsAndUnvestedStockUnitsMember2023-07-012023-09-300001781162mnts:ShareBasedPaymentArrangementOptionsAndUnvestedStockUnitsMember2022-07-012022-09-300001781162mnts:ShareBasedPaymentArrangementOptionsAndUnvestedStockUnitsMember2023-01-012023-09-300001781162mnts:ShareBasedPaymentArrangementOptionsAndUnvestedStockUnitsMember2022-01-012022-09-300001781162us-gaap:WarrantMember2023-07-012023-09-300001781162us-gaap:WarrantMember2022-07-012022-09-300001781162us-gaap:WarrantMember2023-01-012023-09-300001781162us-gaap:WarrantMember2022-01-012022-09-300001781162mnts:ContingentSponsorEarnoutSharesMember2023-07-012023-09-300001781162mnts:ContingentSponsorEarnoutSharesMember2022-07-012022-09-300001781162mnts:ContingentSponsorEarnoutSharesMember2023-01-012023-09-300001781162mnts:ContingentSponsorEarnoutSharesMember2022-01-012022-09-300001781162mnts:BakerMckenzieMember2023-09-300001781162us-gaap:SubsequentEventMembermnts:BakerMckenzieMember2023-10-050001781162us-gaap:SubsequentEventMembermnts:BakerMckenzieMember2023-10-052023-10-050001781162mnts:BakerMckenzieMember2022-01-012022-12-310001781162mnts:ConsiderationDueWithin10BusinessDaysMember2021-06-300001781162mnts:ConsiderationDueWithin10BusinessDaysMember2021-06-302021-06-3000017811622023-02-270001781162mnts:NationalSecurityAgreementMember2021-06-082021-06-080001781162mnts:NationalSecurityAgreementMember2023-07-012023-09-300001781162mnts:NationalSecurityAgreementMember2023-01-012023-09-300001781162mnts:NationalSecurityAgreementMember2022-07-012022-09-300001781162mnts:NationalSecurityAgreementMember2022-01-012022-09-300001781162mnts:SAFENoteLitigationMember2022-07-200001781162mnts:SAFENoteLitigationMemberus-gaap:PendingLitigationMember2022-07-202022-07-200001781162mnts:StephenJPurcellMemberus-gaap:SubsequentEventMember2023-10-232023-10-230001781162us-gaap:SubsequentEventMemberus-gaap:CommonClassAMember2023-10-022023-10-020001781162us-gaap:SubsequentEventMemberus-gaap:CommonClassAMember2023-10-020001781162us-gaap:SubsequentEventMember2023-10-022023-10-020001781162us-gaap:SubsequentEventMembermnts:PrefundedWarrantsMember2023-10-020001781162mnts:OctoberWarrantsMemberus-gaap:SubsequentEventMember2023-10-020001781162us-gaap:SubsequentEventMemberus-gaap:CommonClassAMember2023-10-042023-10-040001781162us-gaap:SubsequentEventMembermnts:SeriesBWarrantsMember2023-10-042023-10-040001781162us-gaap:SubsequentEventMembermnts:FounderLitigationMember2023-10-182023-10-180001781162mnts:NovemberWarrantsMemberus-gaap:SubsequentEventMember2023-11-070001781162mnts:OctoberWarrantsMemberus-gaap:SubsequentEventMember2023-11-070001781162us-gaap:SubsequentEventMember2023-11-092023-11-090001781162us-gaap:SubsequentEventMember2023-11-09
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from   to
Commission file number 001-39128
Momentus Inc.
(Exact name of registrant as specified in its charter)
Delaware84-1905538
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
3901 N. First Street
San Jose, California
95134
(Address of Principal Executive Offices)(Zip Code)
(650) 564-7820
Registrant's telephone number, including area code
Securities registered pursuant to section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stockMNTS
The Nasdaq Stock Market LLC
WarrantsMNTSW
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated fileroAccelerated filero
Non-accelerated filerxSmaller reporting companyx
Emerging growth companyx
1

Table of Contents
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o   No  x
The registrant had outstanding 6,562,221 shares of common stock as of November 10, 2023.

2

Tables of Contents
TABLE OF CONTENTS
Page
Item 3. Quantitative and Qualitative Disclosures About Market Risk
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”), including, without limitation, statements under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations," includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"). Generally, statements that are not historical facts, including statements concerning Momentus Inc.’s (the “Company,” “Momentus,” “we,” “us,” or “our”) possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should," or, in each case, their negative or other variations or comparable terminology, but the absence of these words does not mean that a statement is not forward-looking. There can be no assurance that actual results will not materially differ from expectations.
The forward-looking statements contained in this Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, without limitation, the ability of the Company to raise additional capital to finance its operations and business plan; the results of the Company’s evaluation of the strategic alternatives and the risks associated with any transactions pursued as a results thereof; the ability of the Company to obtain licenses and government approvals for its missions, which are essential to its operations; successful completion of our efforts to prepare our spacecraft for flight, that the vehicles that we plan to operate in future missions will be ready on time, or that they will operate as intended; the ability of the Company to effectively market and sell satellite buses; the ability of the Company to protect its intellectual property and trade secrets; the development of markets for satellite transport and in-orbit services; the ability of the Company to develop, test and validate its technology, including its water plasma propulsion technology; delays or impediments that the Company may face in the development, manufacture and deployment of next generation satellite transport systems; the ability of the Company to convert backlog or inbound inquiries into revenue; changes in applicable laws or regulations and extensive and evolving government regulations that impact operations and business, including export control license requirements; the ability to attract or maintain a qualified workforce with the required security clearances and requisite skills; level of product service or product or launch failures or delays that could lead customers to use competitors’ services; investigations, claims, disputes, enforcement actions, litigation and/or other regulatory or legal proceedings; the Company’s ability to comply with the terms of its National Security Agreement (the “NSA”) and any related compliance measures instituted by the
3

Tables of Contents
director who was approved by the Committee on Foreign Investment in the United States (“CFIUS”) Monitoring Agencies (the “Security Director”); the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and/or other risks and uncertainties described under Part II, Item 1A: "Risk Factors," in this Form 10-Q and under Part I, Item 1A. in our Annual Report on Form 10-K filed with the SEC on March 8, 2023. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws. These risks and others described under Part II, Item 1A: "Risk Factors," in this Form 10-Q and under Part I, Item 1A in our Annual Report on Form 10-K filed with the SEC on March 8, 2023, may not be exhaustive.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.
4

Tables of Contents


ITEM 1. Financial Statements

MOMENTUS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands except number of shares and par value)
September 30,
2023
December 31,
2022
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$9,750 $61,094 
Restricted cash, current394 1,007 
Accounts receivable44  
Insurance receivable500 4,000 
Prepaids and other current assets10,469 10,173 
Total current assets21,157 76,274 
Property, machinery and equipment, net3,353 4,016 
Intangible assets, net329 337 
Operating right-of-use asset5,629 6,441 
Deferred offering costs583 331 
Restricted cash, non-current370 312 
Other non-current assets2,068 4,712 
Total assets$33,489 $92,423 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$2,517 $2,239 
Accrued liabilities7,422 8,026 
Loan payable, current5,740 11,627 
Contract liabilities, current1,162 1,654 
Operating lease liability, current1,239 1,153 
Stock repurchase liability 10,000 
Litigation settlement contingency5,000 8,500 
Other current liabilities22 27 
Total current liabilities23,102 43,226 
Contract liabilities, non-current420 1,026 
Loan Payable, non-current 2,404 
Warrant liability5 564 
Operating lease liability, non-current5,187 6,131 
Other non-current liabilities483 465 
Total non-current liabilities6,095 10,590 
Total liabilities29,197 53,816 
Commitments and Contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.00001 par value; 250,000,000 shares authorized and 2,700,909 issued and outstanding as of September 30, 2023; 250,000,000 shares authorized and 1,688,824 issued and outstanding as of December 31, 2022
  
Additional paid-in capital363,238 342,734 
Accumulated deficit(358,946)(304,127)
Total stockholders’ equity4,292 38,607 
Total liabilities and stockholders’ equity$33,489 $92,423 
The accompanying notes are an integral part of these condensed consolidated financial statements
5

Tables of Contents
MOMENTUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Service revenue$339 $129 $2,066 $179 
Cost of revenue119 14 507 26 
Gross profit220 115 1,559 153 
Operating expenses:
Research and development expenses5,992 10,571 26,315 31,438 
Selling, general and administrative expenses9,294 11,184 29,571 38,898 
Total operating expenses15,286 21,755 55,886 70,336 
Loss from operations(15,066)(21,640)(54,327)(70,183)
Other income (expense), net:
Change in fair value of warrant liability221 1,579 559 3,382 
Realized loss on disposal of assets (45)(17)(114)
Interest income216 28 1,128 33 
Interest expense(530)(1,261)(2,182)(4,166)
Other income (expense) 41 20 44 
Total other income (expense), net(93)342 (492)(821)
Net loss$(15,159)$(21,298)$(54,819)$(71,004)
Net loss per share, basic and diluted$(7.20)$(12.98)$(28.45)$(43.77)
Weighted average shares outstanding, basic and diluted2,106,707 1,641,308 1,927,049 1,622,316 
The accompanying notes are an integral part of these condensed consolidated financial statements

6

Tables of Contents
MOMENTUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share data)

Common stock –
Class A
Additional paid in capitalAccumulated deficitTotal stockholders’ equity
SharesAmount
Balance, December 31, 20221,688,824$ $342,734 $(304,127)$38,607 
Issuance of common stock upon exercise of stock options7,406 — 92 — 92 
Issuance of common stock upon vesting of RSUs15,336 — — — — 
Share repurchase related to Section 16 Officer tax coverage exchange(2,498)— (60)— (60)
Stock-based compensation - stock options, RSAs, RSUs— — 1,720 — 1,720 
Issuance of common stock and related warrants in registered offering, net of issuance costs187,920 — 9,300 — 9,300 
Issuance of common stock to non-employees2,700 — 112 — 112 
Net loss— — — (20,825)(20,825)
Balance, March 31, 20231,899,688$ $353,898 $(324,952)$28,946 
Issuance of common stock upon exercise of stock options2,648 — 38 — 38 
Issuance of common stock upon vesting of RSUs9,440 — — — — 
Issuance of common stock upon purchase of ESPP2,131 — 31 — 31 
Issuance of common stock upon exercise of pre-funded warrants43,401 — — — — 
Stock-based compensation - stock options, RSAs, RSUs— — 2,577 — 2,577 
Net loss— — — (18,835)(18,835)
Balance, June 30, 20231,957,308$ $356,544 $(343,787)$12,757 
Issuance of common stock upon exercise of stock options27 — — —  
Issuance of common stock upon vesting of RSUs12,891 — — — — 
Share repurchase related to Section 16 Officer tax coverage exchange(2,066)— (27)— (27)
Issuance of common stock and related warrants in registered offering, net of issuance costs210,000— 4,565 — 4,565 
Issuance of common stock upon exercise of pre-funded warrants462,948 — — — — 
Stock-based compensation - stock options, RSAs, RSUs— — 2,156 — 2,156 
Common stock issued in connection with reverse stock split59,801 — — — — 
Net loss— — — (15,159)(15,159)
Balance, September 30, 20232,700,909$ $363,238 $(358,946)$4,292 

7

Tables of Contents
Common stock –
Class A
Additional paid in capitalAccumulated deficitTotal stockholders’ equity
SharesAmount
Balance, December 31, 20211,624,236$ $340,570 $(208,683)$131,887 
Issuance of common stock upon exercise of stock options3,415 — 48 — 48 
Issuance of common stock upon vesting of RSUs2,274 — — — — 
Share repurchase related to Section 16 Officer tax coverage exchange(374)— (59)— (59)
Stock-based compensation— — 2,212 — 2,212 
Share repurchase valuation adjustment— — (6,000)— (6,000)
Shares issued upon exercise of warrant5,563 — — — — 
Net loss— — — (26,834)(26,834)
Balance, March 31, 20221,635,114  336,771 (235,517)101,254 
Issuance of common stock upon exercise of stock options25,893 — 345 — 345 
Issuance of common stock upon vesting of RSUs2,999 — — — — 
Issuance of common stock purchase of ESPP1,543 — 190 — 190 
Share repurchase related to Section 16 Officer tax coverage exchange(253)— (38)— (38)
Stock-based compensation— — 3,105 — 3,105 
Share repurchase valuation adjustment— — 220 — 220 
Net loss— — — (22,872)(22,872)
Balance, June 30, 20221,665,296  340,593 (258,389)82,204 
Issuance of common stock upon exercise of stock options9,651 — 125 — 125 
Issuance of common stock upon vesting of RSUs6,535 — — — — 
Share repurchase related to Section 16 Officer tax coverage exchange(1,791)— (168)— (168)
Stock-based compensation— — 3,247 — 3,247 
Share repurchase valuation adjustment— — (4,220)— (4,220)
Net loss— — — (21,298)(21,298)
Balance, September 30, 20221,679,691$ $339,577 $(279,687)$59,890 
The accompanying notes are an integral part of these condensed consolidated financial statements
8

Tables of Contents
MOMENTUS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Nine Months Ended
September 30,
20232022
Cash flows from operating activities:
Net loss$(54,819)$(71,004)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization667 831 
Amortization of debt discount and issuance costs1,182 2,114 
Amortization of right-of-use asset812 889 
Change in fair value of warrant liability(559)(3,382)
Loss on disposal of property, machinery, equipment and intangible assets17 121 
Stock-based compensation expense6,453 8,564 
Non-cash consulting expense112  
Changes in operating assets and liabilities:
Accounts receivable(44) 
Prepaids and other current assets(297)(1,571)
Other non-current assets2,644 (901)
Accounts payable278 (328)
Accrued liabilities(610)(1,873)
Accrued interest118 92 
Other current liabilities(2)(4,967)
Contract liabilities(1,098)851 
Lease liability(859)(908)
Other non-current liabilities18 (23)
Net cash used in operating activities(45,987)(71,495)
Cash flows from investing activities:
Purchases of property, machinery and equipment(94)(618)
Proceeds from sale of property, machinery and equipment113 7 
Purchases of intangible assets(26)(30)
Net cash used in investing activities(7)(641)
Cash flows from financing activities:
Proceeds from exercise of stock options130 517 
Proceeds from employee stock purchase plan31 190 
Repurchase of Section 16 Officer shares for tax coverage exchange(87)(265)
Principal payments on loan payable(9,592)(6,686)
Payment of deferred offering costs(252) 
Payment for repurchase of common shares(10,000) 
Proceeds from issuance of common stock and related warrants15,000  
Payments for issuance costs related to common stock and related warrants(1,135) 
Net cash used in financing activities(5,905)(6,244)
Decrease in cash, cash equivalents and restricted cash(51,899)(78,380)
Cash, cash equivalents and restricted cash, beginning of period62,413 160,547 
Cash, cash equivalents and restricted cash, end of period$10,514 $82,167 
Supplemental disclosure of non-cash investing and financing activities
Purchases of intangible assets in accounts payable and accrued liabilities at period end$5 $ 
Issuance costs related to warrant modification$648 $ 
Deferred offering costs in accounts payable and accrued liabilities at period end$ $238 
Stock repurchase liability fair value$ $10,000 
Supplemental disclosure of cash flow information
Cash paid for interest$882 $1,960 
The accompanying notes are an integral part of these condensed consolidated financial statements
9

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Operations
The Company
Momentus Inc. (together with its consolidated subsidiaries “Momentus” or the “Company”) is a U.S. commercial space company that offers satellite buses, in-space infrastructure services, including in-space transportation, hosted payloads and in-orbit services. Momentus is making new ways of operating in space possible with its in-space transfer and service vehicles, powered by an innovative, space-proven water plasma-based propulsion system.
On May 25, 2022, the Company launched its Vigoride 3 Orbital Service Vehicle (OSV) to Low-Earth Orbit aboard the SpaceX Transporter-5 mission. In addition to Vigoride 3, Momentus used a second port on the same SpaceX mission to fly a third-party deployer from a partner company. Momentus deployed a total of eight customer satellites in low-earth orbit during its inaugural mission, comprising seven satellites from Vigoride 3 and one satellite from the third-party deployer system. The Company incorporated improvements identified during its inaugural mission in advance of its first follow-on mission and other planned follow-on missions.
On January 3, 2023, the Company launched its Vigoride 5 OSV to Low-Earth Orbit aboard the SpaceX Transporter-6 mission. The mission is ongoing and the Vigoride 5 OSV is maneuvering under its own power in low-earth orbit. The primary mission objective is to test the spacecraft on orbit, learn from any issues that are encountered and implement lessons-learned on future Vigoride vehicles and missions. The mission also supported two customers: the Qosmosys Zeus-1 payload which was deployed on orbit on May 10, 2023, and Caltech’s Space Solar Power Demonstrator project, a hosted payload for which the Vigoride 5 continues to provide thrusting maneuvers and on-orbit support, including providing data, power, communication, commanding and telemetry, and resources for optimal picture taking and solar cell lighting.
As part of the Vigoride 5 mission, we successfully completed the initial tests on-orbit of the pioneering Microwave Electrothermal Thruster (MET) that relies on solar power and uses distilled water as a propellant. The MET is the Vigoride OSV’s primary propulsion method that produces thrust by expelling extremely hot gases through a rocket nozzle. Unlike a conventional chemical rocket engine, which creates thrust through a chemical reaction, the MET is designed to create a plasma and thrust using solar power to drive a microwave energy source that heats the water propellant. Momentus has two patents in support of this proprietary propulsion technology.

The recent MET testing done on-orbit included dozens of firings of the thruster that imparted forces on the Vigoride 5 spacecraft. These forces can change the orbital velocity of the spacecraft, allowing the orbit to be adjusted, changing parameters such as altitude and orbital inclination. This capability allows Momentus to deliver its customers’ payloads to custom orbits. Momentus has used the MET to change the spacecraft altitude during the current Vigoride 5 mission.

The Vigoride OSV’s Attitude Control and Reaction Control Systems also use water as a propellant and were recently tested and fully commissioned. With its water-based propulsion systems, Momentus aims to offer cost-effective, efficient, safe, and environmentally friendly propulsion to meet the demands for in-space transportation and infrastructure services.
On April 15, 2023, the Company launched its Vigoride 6 OSV to low-earth orbit aboard the SpaceX Transporter-7 mission and used Vigoride 6 OSV to support the deliveries of six customer payloads, including two satellites for the NASA LLITED mission.
The Vigoride 6 mission is also hosting a Momentus technology demonstration of a new kind of solar array. The Tape Spring Solar Array (TASSA) technology features large sheets of flexible solar cells bonded to tape springs. To stow, they are tightly coiled around a mandrel. After launch, motors unroll the mandrel, deploying the solar array. Momentus aims to drive down vehicle production costs and streamline on-orbit operations, while reducing the cost of power for the satellite, with this technology once operational.
Momentus has entered a new phase by operating two spacecraft in orbit concurrently as the Company continues to grow its capabilities. To date, Momentus has executed four missions, deployed 20 customer satellites in orbit, and
10

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
provided hosted payload support, for Caltech’s Solar Power Project Demonstrator mission that recently demonstrated its ability to wirelessly transmit power in space and to beam detectable power to Earth.
In addition to the Vigoride Orbital Service Vehicle, Momentus is now also offering its M-1000 satellite bus which has substantial commonality with Vigoride. With a growing demand for satellite bus services, Momentus is positioned to advance its hardware and flight-proven technology for this market. The M-1000 bus is a flexible option to meet various mission requirements. Innovations to improve sensor capability, maneuverability, increased power, and lower costs are integrated into the product. Momentus believes it can manufacture satellite buses like the M-1000 at a rapid and scalable pace.
Momentus has started work in support of its Small Business Innovation Research award from the Space Development Agency. This project's scope involves making tailored modifications to the system underlying the M-1000 satellite bus and Vigoride OSV to support a full range of U.S. Department of Defense (DoD) payloads. Some of these areas include adding a secure payload interface, optical communications terminals, a high-volume data recorder, and improving the modularity of the propulsion system. Completion of this work is expected in mid-2024.
Momentus submitted a bid for the Tranche 2 Tracking Layer to the U.S. Space Force Space Development Agency (SDA) to produce 18 satellites for missile tracking and fire control. Under this proposal to the SDA, Momentus is the prime contractor with a strong team of traditional and non-traditional space companies.
Momentus' next mission is scheduled to deliver customers to orbit during the SpaceX Transporter-10 mission, which is targeted to launch no earlier than March 2024 and will feature a Rendezvous and Proximity Operations demonstration of a new Momentus capability that has application to future satellite inspection, servicing, refueling, and de-orbit missions. During this demonstration, Momentus plans to release a satellite and then maneuver into close proximity utilizing its Vigoride Orbital Service Vehicle.
The Company has space reserved on every SpaceX Transporter mission through the end of 2024 and is actively booking customers.
Business Combination
On August 12, 2021, the Company consummated a merger pursuant to the terms of the Agreement and Plan of Merger, dated October 7, 2020, and as amended on March 5, 2021, April 6, 2021, and June 29, 2021 (the “Merger Agreement”), by and among Stable Road Acquisition Corp (“SRAC”), Project Marvel First Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of SRAC (“First Merger Sub”), and Project Marvel Second Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of SRAC (“Second Merger Sub”), pursuant to which First Merger Sub merged with and into Momentus Inc., a Delaware corporation (“Legacy Momentus”) with Legacy Momentus as the surviving corporation of the First Merger Sub, and immediately following which Legacy Momentus merged with and into the Second Merger Sub, with the Second Merger Sub as the surviving entity (the “Business Combination”). In connection with the closing of the Business Combination (“Closing”), the Company changed its name from Stable Road Acquisition Corp. to Momentus Inc., and Legacy Momentus changed its name to Momentus Space, LLC.
The Business Combination was accounted for as a reverse recapitalization under ASC 805, Business Combinations, with SRAC and its two wholly owned subsidiaries. The Company received gross proceeds of $247.3 million upon the closing of the Business Combination. Public and private warrants of SRAC were assumed by the Company as a result of the Business Combination.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these unaudited condensed consolidated interim financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. 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 remains heavily focused on growth and continued development of its proprietary technology, and as a result, it has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally and the Company’s financial
11

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 $15.2 million and $54.8 million for the three and nine months ended September 30, 2023, respectively, and accumulated deficit of $358.9 million as of September 30, 2023. Additionally, the Company used net cash of $46.0 million to fund its operating activities for the nine months ended September 30, 2023, and had cash and cash equivalents of $9.7 million as of September 30, 2023.
Pursuant to the requirements of ASC Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these unaudited condensed consolidated interim financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the unaudited condensed consolidated interim financial statements are issued. When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the unaudited condensed consolidated Interim financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated interim financial statements are issued.
In connection with the preparation of the condensed consolidated financial statements for the three and nine months ended September 30, 2023, 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 its regular operations and 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 unaudited condensed consolidated 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 has executed a term sheet to raise capital with Deutsche Bank, and continues to seek and evaluate all opportunities to access additional capital through any available means. On September 11th and October 4th of 2023, the Company executed registered directed offerings of its Class A common stock that raised net proceeds of approximately $8 million.
As a result of these uncertainties, and notwithstanding management’s plans and efforts to date, there is substantial doubt about the Company’s ability to continue as a going concern. If the Company is unable to raise substantial additional capital in the near term, the Company's operations and business plan will need to be scaled back or halted altogether. Additionally, if the Company is able to raise additional capital but that capital is insufficient to provide a bridge to full commercial production at a profit, the Company's operations could be severely curtailed or cease entirely and the Company may not realize any significant value from its assets.
The accompanying condensed consolidated financial statements have been prepared on a going concern basis of accounting. The accompanying condensed consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.
Reverse Stock Split
Effective August 22, 2023, the Company’s stockholders approved a 1-for-50 reverse stock split of the Company’s Class A common stock. As a result of the reverse stock split, every 50 shares of Class A common stock issued and outstanding on August 22, 2023, were automatically combined into one share of Class A common stock. Any fractional shares resulting from the reverse stock split were rounded up to the next nearest whole share of Class A common stock. The reverse stock split did not affect the stated par value of the Class A common stock nor did it change the total number of the Company’s authorized shares of Class A common stock. The Company’s preferred stock was not affected by the reverse stock split.
12

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Also on the effective date of the reverse stock split, all options, warrants and other convertible securities of the Company outstanding immediately prior to the reverse stock split were adjusted by dividing the number of shares of Class A common stock into which the options, warrants and other convertible securities are exercisable or convertible by 50 and multiplying the exercise or conversion price thereof by 50, all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share. Such proportional adjustments were also made to the number of shares and restricted stock units issued and issuable under the Company’s equity compensation plan.
The Company has retroactively adjusted all periods presented for the effects of the stock split. See Note 9 for additional information.
Note 2. Summary of Significant Accounting Policies
Unaudited Interim Financial Information
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The balance sheet as of December 31, 2022 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP for audited financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (the “FASB”).
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. The accompanying unaudited interim condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of September 30, 2023 and December 31, 2022, the results of operations for the three and nine months ended September 30, 2023 and 2022, the statement of stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023, or for any future period. These interim condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the years ended December 31, 2022 and 2021 filed with the SEC in our Annual Report on Form 10-K filed by the Company on March 8, 2023.
Principles of Consolidation
The condensed consolidated financial statements include the financial statements of all the subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Accordingly, actual results could differ from those estimates. Significant estimates inherent in the preparation of the condensed consolidated financial statements include, but are not limited to, the timing of revenue recognition, accounting for useful lives of property, machinery and equipment, net, intangible assets, net, accrued liabilities, leases, income taxes including deferred tax assets and liabilities, impairment valuation, stock-based compensation, warrant liabilities, and litigation contingencies.
Emerging Growth Company Status
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements
13

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. The Company is an “emerging growth company” as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. The Company will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of Common Stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which the Company after the consummation of the Business Combination has total annual gross revenue of $1.07 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which the Company has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2024. The Company expects to continue to take advantage of the benefits of the extended transition period, although it may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare the Company’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have remaining maturities of three months or less when initially purchased.
The Company places its cash in the bank, which may at times be in excess of the United States' Federal Deposit Insurance Corporation insurance limits, with high credit quality financial institutions and attempts to limit the amount of credit exposure with any one institution.
Restricted Cash
Restricted cash primarily represents deposited cash that is restricted by financial institutions for two purposes. $0.4 million is restricted primarily as collateral for a letter of credit issued to the Company’s landlord in accordance with the terms of a lease agreement entered into in December 2020, and is classified as a non-current asset as it will be returned to the Company upon the occurrence of future events which are expected to occur beyond one year from September 30, 2023. The remaining $0.4 million is held in an escrow bank account which is restricted for expenditures related to the NSA. See Note 12 for additional information regarding the NSA.
Deferred Fulfillment and Prepaid Launch Costs
The Company prepays for certain launch costs to third-party providers that will carry the transport vehicle to orbit. Prepaid costs allocated to the delivery of a customers’ payload are classified as deferred fulfillment costs and recognized as cost of revenue upon delivery of the customers’ payload. Prepaid costs allocated to our payload are classified as prepaid launch costs and are amortized to research and development expense upon the release of our payload. The allocation is determined based on the distribution between customer and our payload weight on each launch.
As of September 30, 2023, and December 31, 2022, the Company had deferred fulfillment and prepaid launch costs of $6.4 million and $7.4 million, respectively, with $4.5 million and $3.0 million recorded within prepaids and other current assets, respectively, and $1.9 million and $4.4 million are recorded other non-current asset, respectively, in our condensed consolidated balance sheets.
Property, Machinery and Equipment, net
Property, machinery and equipment are stated at cost less accumulated depreciation. Depreciation is generally recorded using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives of fixed assets by asset category are described below:
14

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
Fixed Assets
Estimated Useful Life
Computer equipment
Three years
Furniture and fixtures
Five years
Leasehold improvements
Lesser of estimated useful life or remaining lease term (one year to seven years)
Machinery and equipment
Seven years
Costs of maintenance or repairs that do not extend the lives of the respective assets are charged to expenses as incurred.
Intangible Assets, net
Intangible assets, which consist of patents, are considered long-lived assets and are reported at cost less accumulated amortization and accumulated impairment loss, if any. Amortization is recognized on a straight-line basis over 10 years for patents, which is the estimated useful lives of the intangible assets.
In accordance with ASC 350, Intangibles, the Company presents capitalized implementation costs for cloud computing arrangements within prepaid and other current assets, and other non-current assets to properly present the capitalized costs with their related subscription fees.
Deferred Offering Costs
Offering costs consist of legal, accounting, underwriting fees and other costs incurred that are directly related to fundraising activities. During the year ended December 31, 2022, and the nine months ended September 30, 2023, deferred offering costs were attributable to the Company’s S-3 Universal Shelf registration (the “Form S-3”) and the at-the-market offering program and Securities Purchase Agreement. These costs will be netted with the proceeds proportional to the at-the-market program fundraising and any future fundraising under the "Form S-3". Refer to Note 9 for additional information.
Loss Contingencies
The Company estimates loss contingencies in accordance with ASC 450-20, Loss Contingencies (“ASC 450-20”), which states that a loss contingency shall be accrued by a charge to income if both of the following conditions are met: (i) information available before the condensed consolidated financial statements are issued or are available to be issued indicates that it is probable that a liability had been incurred at the date of the condensed consolidated financial statements and (ii) 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 for additional information.
Revenue Recognition
The Company enters into short-term contracts for ‘last-mile’ satellite and cargo delivery (transportation service), 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 single 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 consistently throughout the mission to its customers and also has services available on a ‘stand ready’ basis as needed until the mission reaches its conclusion. The Company recognizes revenue for these in-orbit services ratably over time on a straight-line basis.
The Company accounts for customer contracts in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 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.
15

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
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.
As part of its contracts with customers, the Company collects up-front non-refundable deposits prior to launch. As of September 30, 2023, and December 31, 2022, the Company had customer deposit balances of $1.6 million and $2.7 million, respectively, related to signed contracts with customers, including firm orders and options (some of which have already been exercised by customers). These deposits are recorded as current and non-current contract liabilities in the Company’s condensed consolidated balance sheets. Included in the collected amount as of September 30, 2023 and December 31, 2022 are $0.4 million and $1.0 million, respectively, of non-current deposits.
During the nine months ended September 30, 2023, the Company recognized $2.1 million of revenue, due to transportation services performed in Vigoride 5 and Vigoride 6 spaceship launches, hosted payload services in Vigoride 5, and forfeited customer deposits primarily related to expired options. The Company recognized $0.2 million in revenue from transportation services during the nine months ended September 30, 2022.
The disaggregation of revenue by type is as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2023202220232022
Transportation services$ $101 $1,305 $151 
Hosted payload services284  426  
Forfeited customer deposits55 28 335 28 
Total revenue$339 $129 $2,066 $179 
Fair Value Measurement
The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. A three-tiered hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value. This hierarchy requires that the Company use observable market data, when available, and minimize the use of unobservable inputs when determining fair value:
Level 1, observable inputs such as quoted prices in active markets;
Level 2, inputs other than the quoted prices in active markets that are observable either directly or indirectly; and
Level 3, unobservable inputs in which there is little or no market data, which requires that the Company develop its own assumptions.
The fair values of cash and cash equivalents, accounts payable, and certain prepaid and other current assets and accrued expenses approximate carrying values due to the short-term maturities of these instruments which fall with Level 1 of the fair value hierarchy. The carrying value of certain other non-current assets and liabilities approximates fair value. The Company had no Level 2 inputs for the three and nine months ended September 30, 2023 and 2022.
The Company’s warrants are recorded as a derivative liability pursuant to ASC 815, Derivatives and Hedging (“ASC 815”), and are classified within Level 3 of the fair value hierarchy as the Company is using the Black Scholes Option Pricing model. The primary significant unobservable input used in the valuation of the warrants is expected stock price volatility. Expected stock price volatility is based on the actual historical volatility of a group of comparable publicly traded companies observed over a historical period equal to the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal
16

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
to the remaining expected life of the warrants. The expected term was based on the maturity of the warrants, which is 5 years. The dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the warrants. Upon conversion of the Legacy Momentus private warrants immediately prior to the business combination, the key valuation input was the closing price of Company’s Common Stock on the Closing Date, as the expected term and volatility were immaterial to the pricing model.
The Company’s stock repurchase agreements with the Co-Founders (see Note 12 for additional information) are recorded as contingent liabilities pursuant to ASC 480, measured at fair value. The stock repurchase agreements are classified within Level 3 of the hierarchy as the fair value is dependent on management assumptions about the likelihood of non-market outcomes. The Company paid $10.0 million to satisfy the stock repurchase agreement contingent liabilities during the three months ended March 31, 2023 (see Note 9 for additional information). There were no transfers between levels of input during the three and nine months ended September 30, 2023 and 2022.
The change in fair values of liabilities subject to recurring remeasurement were as follows:
(in thousands)LevelFair value as of December 31, 2022Payment of Stock Repurchase LiabilityChange in Fair ValueFair value as of September 30, 2023
Warrant Liability3$564 $— $(559)$5 
Stock Repurchase Liability310,000 (10,000)—  
Total$10,564 $(10,000)$(559)$5 
Key assumptions for the Black-Scholes model used to determine the fair value of warrants outstanding as of September 30, 2023 were as follows:
Warrant term (years)2.87
Volatility111.00 %
Risk-free rate4.77 %
Dividend yield0.00 %
Warrant Liability
The Company’s private warrants and stock purchase warrants are recorded as derivative liabilities pursuant to ASC 815 and are classified within Level 3 of the fair value hierarchy as the Company is using the Black Scholes Option Pricing model to calculate fair value. See Note 9 for additional information. Significant unobservable inputs, prior to the Company’s stock being publicly listed, included stock price, volatility and expected term. At the end of each reporting period, changes in fair value during the period are recognized as components of other income within the condensed consolidated statements of operations. The Company will continue to adjust the warrant liability for changes in fair value until the earlier of (i) the exercise or expiration of the warrants or (ii) the redemption of the warrants, at which time the warrants will be reclassified to additional paid-in capital within the condensed consolidated statements of stockholders’ equity.
The warrants issued by Momentus Inc. prior to the Business Combination were exercised in connection with the Business Combination and as a result, the Company performed a fair value measurement of those warrants on the Closing Date and recorded the change in the instruments’ fair values prior to converting them to equity. The warrants assumed by the Company as a result of the Business Combination remain outstanding.
Public and Private Warrants
Prior to the Business Combination, SRAC issued 225,450 private placement warrants (“Private Warrants”) and 172,500 public warrants (“Public Warrants” and, together with the “Private Warrants”, “Warrants”). Each whole warrant entitles the holder to purchase one share of the Company’s common stock at a price of $575.00 per share, subject to adjustments and will expire five years after the Business Combination or earlier upon redemption or liquidation.
The Private Warrants do not meet the derivative scope exception and are accounted for as derivative liabilities. Specifically, the Private Warrants contain provisions that cause the settlement amounts to be dependent upon the
17

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
characteristics of the holder of the warrant which is not an input into the pricing of a fixed-for-fixed option on equity shares. Therefore, the Private Warrants are not considered indexed to the Company’s stock and should be classified as a liability. Since the Private Warrants meet the definition of a derivative, the Company recorded the Private Warrants as liabilities on the condensed consolidated balance sheet at fair value upon the Closing, with subsequent changes in the fair value recognized in the condensed consolidated statements of operations at each reporting date. The fair value of the Private Warrants was measured using the Black-Scholes option-pricing model at each measurement date.
In addition, the Public Warrants are accounted for as equity classified by the Company. On consummation of the Business Combination, the Company recorded equity related to the Public Warrants of $20.2 million, with an offsetting entry to additional paid-in capital. Similarly, on the consummation of the Business Combination, the Company recorded a liability related to the Private Warrants of $31.2 million, with an offsetting entry to additional paid-in capital.
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 815, at the initial recognition.
Other than the Public and Private Warrants noted above, the company also had other warrants issued and outstanding which were recognized as derivative liabilities in accordance with ASC 815 until they were fully exercised. Accordingly, the Company recognized the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period until exercised. The fair value of the warrant liabilities issued were initially measured using the Black-Scholes model and were subsequently remeasured at each reporting period with changes recorded as a component of other income in the Company’s condensed consolidated statements of operations. Derivative warrant liabilities are classified as non-current as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. See Note 9 for additional information.
Modification of Equity Classified Warrants
A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt offering, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications, the incremental change in fair value is recognized as a deemed dividend.
Basic and Diluted Loss Per Share
Net loss per share is provided in accordance with FASB ASC 260-10, Earnings per Share. Basic net loss per share is computed by dividing losses by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive. See Note 11 for additional information.
Impairment of Long-lived Assets
The Company evaluates the carrying value of long-lived assets, which includes intangible assets, on an annual basis, or more frequently whenever circumstances indicate a long-lived asset may be impaired. When indicators of impairment exist, the Company estimates future undiscounted cash flows attributable to such assets. In the event cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair value. During the three and nine months ended September 30, 2023 and 2022, there were no impairments of long-lived assets. See Note 4 and Note 5 for additional information.
18

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
Stock-based Compensation
The Company has a stock incentive plan under which equity awards are granted to employees, directors, and consultants. All stock-based payments are recognized in the condensed consolidated financial statements based on their respective grant date fair values.
Restricted stock unit fair value is based on our closing stock price on the day of the grant. Stock option fair value is determined using the Black Scholes Merton Option Pricing model. The model requires management to make a number of assumptions, including expected volatility of the Company’s stock, expected life of the option, risk-free interest rate, and expected dividends. Employee Stock Purchase Plan (“ESPP”) compensation fair value is also determined using the Black Scholes Merton Option Pricing model, using a six-month expected term to conform with the six month ESPP offering period.
The fair value of equity awards is expensed over the related service period which is typically the vesting period, and expense is only recognized for awards that are expected to vest. The Company accounts for forfeitures as they occur.
401(k) Plan
The Company has a 401(k) plan that it offers to its full-time employees. The Company did not contribute to the plan for the three and nine months ended September 30, 2023 and 2022.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs include activities to develop existing and future technologies for the Company’s vehicles. Research and development activities include basic research, applied research, design, development, and related test program activities. Costs incurred for developing our vehicles primarily include equipment, material, and labor hours (both internal and subcontractors).
Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities related to an executory contractual arrangement are deferred and capitalized. These advance payments are recognized as an expense as the related goods are delivered or services performed. When the related goods are no longer expected to be delivered or services rendered, the capitalized advance payment should be charged to expense.
Leases
The Company determines if an arrangement contains a lease at inception based on whether there is an identified property, plant or equipment and whether the Company controls the use of the identified asset throughout the period of use.
Operating leases are included in the accompanying condensed consolidated balance sheets. Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease and are included in current and non-current liabilities. Operating lease ROU assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for borrowings with a similar term.
The Company’s operating lease ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable lease payments are recognized in the period in which the obligation for those payments is incurred. In addition, the Company elected the practical expedient such that it does not recognize ROU assets or lease liabilities for leases with a term of 12
19

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
months or less of all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term. See Note 6 for additional details on the Company’s leases.
Income Taxes
The Company accounts 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, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the “more likely than not” threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. 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.
Concentrations of Risk
Financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents in banks that management believes are creditworthy, however deposits may exceed federally insured limits.
Segment Reporting
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. In consideration of ASC 280, Segment Reporting, we are not organized around specific services or geographic regions. We currently operate in one service line providing in-space transportation services.
Our chief operating decision maker uses condensed financial information to evaluate our performance, which is the same basis on which our results and performance are communicated to our Board of Directors. Based on the information described above and in accordance with the applicable literature, management has concluded that we are organized and operated as one operating and reportable segment.
Recently Issued Accounting Standards
Although there are several new accounting pronouncements issued or proposed by the FASB, which have been adopted or will be adopted as applicable, management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s financial position or results of operations.
20


Note 3. Prepaids and Other Current Assets
Prepaids and other current assets consisted of the following:
(in thousands)September 30,
2023
December 31,
2022
Prepaid launch costs, current$4,493 $3,000 
Prepaid research and development2,377 2,841 
Prepaid insurance and other assets3,599 4,332 
Total$10,469 $10,173 
As of September 30, 2023 and December 31, 2022, the non-current portion of prepaid launch costs recorded in other non-current assets was $1.9 million and $4.4 million, respectively.
Note 4. Property, Machinery and Equipment, net
Property, machinery and equipment, net consisted of the following:
(in thousands)September 30,
2023
December 31,
2022
Computer equipment$10 $10 
Leasehold improvements2,281 2,281 
Machinery and equipment3,411 3,411 
Construction in-progress 106 
Property, machinery and equipment, gross5,702 5,808 
Less: accumulated depreciation(2,349)(1,792)
Property, machinery and equipment, net$3,353 $4,016 
Depreciation expense related to property, machinery and equipment was $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively, and $0.2 million and $0.7 million for the three and nine months ended September 30, 2022, respectively.
Note 5. Intangible Assets, net
Intangible assets, net consisted of the following as of September 30, 2023:
(in thousands)Gross ValueAccumulated AmortizationNet ValueWeighted Average Remaining Amortization Period (In Years)
Patents/Intellectual Property$492 $(163)$329 6.4
Total$492 $(163)$329 
Intangible assets, net consisted of the following as of December 31, 2022:
(in thousands)Gross ValueAccumulated AmortizationNet ValueWeighted Average Remaining Amortization Period (In Years)
Patents/Intellectual Property$461 $(124)$337 7.0
Total$461 $(124)$337 
Amortization expense related to intangible assets was $0.01 million and $0.04 million for the three and nine months ended September 30, 2023, respectively, and $0.01 million and $0.10 million for the three and nine months ended September 30, 2022, respectively.
21

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Intangible Assets, net (cont.)
As of September 30, 2023, the future estimated amortization expense related to intangible assets is as follows:
(in thousands)
Remainder of 2023$13 
202454 
202554 
202654 
202754 
Thereafter100 
Total$329 
Note 6. Leases
The Company leases office space under non-cancellable operating leases. In January 2021, the Company commenced a lease in San Jose, California. The lease expires in February 2028. The Company is obligated to pay approximately $11 million over the term of the lease. Prior to December 31, 2021, the Company amended two minor leases to extend access until April 2022 to aid the full transition to the San Jose facility. The Company had one additional minor lease that expired in November 2022.
The components of operating lease expense were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Operating lease cost$368 $385 $1,103 $1,229 
Variable lease expense136 138 394 429 
Short-term lease expense 21  22 
Total lease expense$504 $544 $1,497 $1,680 
Variable lease expense consists of the Company’s proportionate share of operating expenses, property taxes, and insurance.
As of September 30, 2023, the weighted-average remaining lease term was 4.4 years and the weighted-average discount rate was 5.6%.
As of September 30, 2023, the maturities of the Company’s operating lease liabilities were as follows:
(in thousands)
Remainder of 2023$383 
20241,580 
20251,627 
20261,674 
20271,729 
Thereafter298 
Total lease payments7,291 
Less: Imputed interest(865)
Present value of lease liabilities$6,426 
22

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Note 7. Accrued Liabilities
Accrued expenses consisted of the following:
(in thousands)September 30,
2023
December 31,
2022
Legal and other professional services$3,882 $3,128 
Compensation expense2,947 3,584 
Research and development projects451 981 
Other accrued liabilities142 333 
Total$7,422 $8,026 
Note 8. Loan Payable
Term Loan
On February 22, 2021, the Company entered into a Term Loan and Security Agreement (the “Term Loan”) which provided the Company with up to $40.0 million in borrowing capacity at an annual interest rate of 12%. $25.0 million of the Term Loan was immediately available for borrowing by the Company at the inception of the agreement, the Company borrowed this amount on March 1, 2021. The remaining $15.0 million of borrowing capacity is no longer available as the Company did not achieve certain milestones by the June 30, 2021 deadline. The repayment terms of the Term Loan provide for interest-only payments from March 1, 2021 through February 28, 2022.
Under the original terms, the principal amount was due and payable on March 1, 2022. However, during January 2022 the Company exercised its option to pay back the principal amount of the Term Loan over two years beginning on March 1, 2022 and ending on February 28, 2024.
The Company allocated the proceeds from the Term Loan agreement to the note and warrants issued in conjunction with the Term Loan comprising the financing agreement based on the relative fair value of the individual securities on the February 22, 2021 closing date of the agreements. The discount attributable to the note, an aggregate of $15.8 million, primarily related to the value of the warrant liability with immaterial issuance costs, is amortized using the effective interest method over the term of the note, originally maturing on March 1, 2022, but now being repaid over two years, recorded as interest expense. Because the discount on the note exceeds 63% of its initial face value, and because the discount is amortized over the period from issuance to maturity, the calculated effective interest rate up until January 2022 was 126.0%.
As a result of the exercised extended repayment schedule, the unamortized discount and issuance costs were recast over the updated term of the loan and resulted in a recalculated effective interest rate of 28.2%. Interest expense amortization was $0.3 million and $1.2 million for the three and nine months ended September 30, 2023, respectively, and $0.7 million and $2.1 million for the three and nine months ended September 30, 2022, respectively.
As of September 30, 2023, the Company’s total loan payable consisted of gross Term Loan payable of $5.7 million and accrued interest of $0.2 million, offset by unamortized debt discount and issuance costs of $0.2 million. The Term Loan principal has future scheduled maturities of $3.4 million and $2.3 million for the remainder of 2023 and 2024, respectively.
Note 9. Stockholders' Equity
Common Stock and Preferred Stock
Effective August 22, 2023, the Company’s stockholders approved a 1-for-50 reverse stock split of the Company’s Class A common stock. As a result of the reverse stock split, every 50 shares of Class A common stock issued and outstanding on August 22, 2023, were automatically combined into one share of Common Stock. Any fractional shares resulting from the reverse stock split were rounded up to the next nearest whole share of Class A common stock.
23

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Stockholders' Equity (cont.)
To effectuate the reverse stock split, the Company filed a certificate of amendment to the Second Amended and Restated Certificate of Incorporation. As a result of the reverse stock split, there was no change to par value and the total number of authorized shares of Class A common stock.
Pursuant to the terms of the Second Amended and Restated Certificate of Incorporation, as amended, the Company is authorized and has available a total of 270,000,000 shares of stock, consisting of (i) 250,000,000 shares of Class A common stock, par value $0.00001 per share, and (ii) 20,000,000 shares of preferred stock, par value $0.00001 per share.
September 2023 Securities Purchase Agreement
On September 7, 2023, the Company entered into a Securities Purchase Agreement (the “September SPA”) with an investor, pursuant to which the Company issued and sold to the investor in a registered offering (the “September Offering”), (i) an aggregate of 210,000 shares of the Company’s Class A common stock at a purchase price of $7.43 per share, (ii) pre-funded warrants (the “September Pre-Funded Warrants”) to purchase an aggregate of 462,948 shares of Class A common stock and (iii) Series A warrants to purchase 672,948 shares of Class A common stock (the "Series A Warrants"), and (iv) Series B warrants to purchase 672,948 shares of Class A common stock (the "Series B Warrants" together with the Series A Warrants, the "September Warrants").
The purchase price of each September Pre-Funded Warrant was equal to the price per share of Class A common stock being sold in the Offering minus $0.00001. The September Pre-Funded Warrants have an exercise price of $0.00001 per share and are exercisable at any time after the issuance, subject to the availability of authorized but unissued shares of Class A common stock, and will not expire until exercised. The September Warrants have an exercise price of $7.18 and are exercisable at any time after issuance, subject to the availability of authorized but unissued shares of Class A common stock. 672,948 of the September Warrants will expire on September 11, 2028 (the Series A Warrants) and 672,948 of the September Warrants will expire on September 11, 2024 (the Series B Warrants).
The Company received aggregate gross proceeds from the September Offering of approximately $5.0 million, before deducting estimated expenses in connection with the September Offering. Both the September Pre-Funded Warrants and the September Warrants met the requirements for equity classification.
The Company estimated the fair value of the September Pre-Funded Warrants based on the fair value of the Company’s Class A common stock on the issuance date, less the $0.00001 exercise price. The Company allocated approximately $1.8 million in proceeds from the September Offering to the value of the September Pre-Funded Warrants on a relative fair value basis, which was recorded to additional paid in capital.
The Company estimated the fair value of the September Warrants using the Black-Scholes valuation model and allocated approximately $2.3 million in proceeds from the September Offering to the value of the September Warrants on a relative fair value basis, which was recorded to additional paid in capital.
The significant inputs into the Black-Scholes valuation model at September 11, 2023 (the initial recognition date) are as follows:
Series A WarrantsSeries B Warrants
Warrant term (years)5.001.00
Volatility85.00 %79.00 %
Risk-free rate4.35 %5.33 %
Dividend yield0.00 %0.00 %
In connection with the September Offering, the Company also agreed to amend the February Class A Warrants to purchase up to an aggregate of 231,321 shares of Class A common stock at an exercise price of $57.50 per share with a termination date of August 27, 2028 (see discussion of the February Offering below). Upon amendment, the
24

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Stockholders' Equity (cont.)
February Class A Warrants exercise price was reduced to $7.18 per share and the termination date was extended to September 11, 2028.
The Company estimated the fair value of the February Class A Warrants immediately before and after modification using the Black-Scholes valuation model and determined an incremental increase in fair value of approximately $0.6 million. In accordance with ASC 815 guidance on equity classified warrant modifications, the incremental change in fair value of the February Class A Warrants was accounted for as an equity issuance cost for the September Offering, which was recorded to additional paid in capital. The significant inputs into the Black-Scholes valuation model at September 11, 2023 (the modification date) are as follows:
Before ModificationAfter Modification
Warrant term (years)4.975.01
Volatility84.00 %85.00 %
Risk-free rate4.40 %4.33 %
Dividend yield0.00 %0.00 %
During the three months ended September 30, 2023, the Company issued 462,948 shares of Class A common stock as a result of all of the September Pre-Funded Warrants being exercised and the Company received an immaterial amount of cash proceeds.
February 2023 Securities Purchase Agreement
On February 23, 2023, the Company entered into a Securities Purchase Agreement (the “February SPA”) with an investor, pursuant to which the Company issued and sold to the investor in a registered offering (the “February Offering”), (i) an aggregate of 187,920 shares of the Company’s Class A common stock at a purchase price of $43.23 per share, (ii) pre-funded warrants (the “February Pre-Funded Warrants”) to purchase an aggregate of 43,401 shares of Class A Stock and (iii) warrants to purchase 231,321 shares of Class A Stock (the “February Class A Warrants”).
The purchase price of each February Pre-Funded Warrant was equal to the price per share of Class A common stock being sold in the February Offering minus $0.00001. The February Pre-Funded Warrants have an exercise price of $0.00001 per share and are exercisable at any time after the issuance, subject to the availability of authorized but unissued shares of Class A common stock, and will not expire until exercised. The February Class A Warrants have an exercise price of $57.50 per share and exercisable beginning on August 27, 2023, subject to the availability of authorized but unissued shares of Class A common stock, and will expire August 27, 2028.
The Company received aggregate gross proceeds from the February Offering of approximately $10.0 million, before deducting estimated expenses in connection with the February Offering. Both the February Pre-Funded Warrants and the February Class A Warrants met the requirements for equity classification.
The Company estimated the fair value of the February Pre-Funded Warrants based on the fair value of the Company’s Class A common stock on the issuance date, less the $0.00001 exercise price. The Company allocated approximately $1.1 million in proceeds from the February Offering to the value of the February Pre-Funded Warrants on a relative fair value basis, which was recorded to additional paid in capital.
The Company estimated the fair value of the February Class A Warrants using the Black-Scholes valuation model and allocated approximately $4.0 million in proceeds from the February Offering to the value of the February Class A Warrants on a relative fair value basis, which was recorded to additional paid in capital. The significant inputs into the Black-Scholes valuation model at February 23, 2023 (the initial recognition date) are as follows:
Warrant term (years)5.51
Volatility85.00 %
Risk-free rate4.03 %
Dividend yield0.00 %
25

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Stockholders' Equity (cont.)
During the three months ended June 30, 2023, the Company issued 43,401 shares of Class A common stock as a result of all of the February Pre-Funded Warrants being exercised and the Company received an immaterial amount of cash proceeds.
Co-Founder Divestment and Stock Repurchase Agreements
In accordance with the NSA and pursuant to stock repurchase agreements entered into with the Company, the Co-Founders sold 100% of their respective equity interests in the Company on June 30, 2021. The Company paid an aggregate of $40.0 million to the Co-Founders following the Business Combination, and an additional payment of an aggregate of $10.0 million was payable after cumulative business combination or capital raising transactions resulted in cash proceeds to the Company of no less than $250.0 million.
As a result of the February Offering on February 27, 2023, the Company raised $10.0 million of gross cash proceeds through the sale of securities which, together with the $247.3 million raised in the Business Combination and other capital raising activities, triggered the $10.0 million obligation under the stock repurchase agreements. The Company paid the Co-Founders $10.0 million to pay off the liability during the three months ended March 31, 2023.
Public and Private Warrants
As of September 30, 2023, the Company had public and private warrants outstanding to purchase 172,500 shares and 225,450 shares of Class common stock, respectively, related to the Business Combination. The warrants entitle the registered holder to purchase stock at a price of $575.00 per share, subject to adjustment, at any time commencing on August 12, 2021. The public and private warrants expire on the fifth anniversary of the Business Combination, or earlier upon redemption or liquidation.
The Company also had private warrants outstanding to purchase 6,171 shares of Class A common stock, with an exercise price of $10.00 per share, unrelated to the Business Combination, which were exercised on a net basis for 5,563 shares during the three months ended March 31, 2022.
The Company issued 231,321 of additional warrants on February 27, 2023, in relation to the February Offering, and an aggregate of 1,345,896 of additional warrants on September 11, 2023, in relation to the September Offering. The warrants entitle the registered holder to purchase shares of Class A common stock at a price of $7.18 per share.
The private warrants assumed in connection with the Business Combination are accounted for as a derivative liability and decrease of the estimated fair value of the warrants of $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively, and $1.6 million and $3.4 million for the three and nine months ended September 30, 2022, respectively, was recorded in other income (expense) within the condensed consolidated statements of operations. The public warrants and the legacy outstanding private warrants were recorded as equity within the condensed consolidated statements of stockholders’ equity.
Contingent Sponsor Earnout Shares
As a result of the Business Combination, the Company modified the terms of 28,750 shares of Class A common stock held by SRAC’s sponsor (the “Sponsor Earnout Shares”), such that all such shares will be forfeited if the share price of Class A common stock does not reach a volume-weighted average closing sale price of $625.00, two thirds of such shares will be forfeited if the share price of Class a common stock does not reach a volume-weighted average closing sale price of $750.00, and one third of such shares will be forfeited if the share price of Class A common stock does not reach a volume-weighted average closing sale price of $875.00, in each case, prior to the fifth anniversary of the Business Combination. Certain events which change the number of outstanding shares of Common Stock, such as a split, combination, or recapitalization, among other potential events, will equitably adjust the target vesting prices above. The Sponsor Earnout Shares may not be transferred without the Company’s consent until the shares vest.
The Sponsor Earnout Shares are recorded within equity. Due to the contingently forfeitable nature of the shares, the Sponsor Earnout Shares are excluded from basic EPS calculations but are considered potentially dilutive shares for the purposes of diluted EPS (refer to Note 11).
26

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Stockholders' Equity (cont.)
At-The-Market Offering
On September 28, 2022, Momentus entered into an At-the-Market Equity Offering Sales Agreement with a sales agent (the “ATM Sales Agreement”). Pursuant to the ATM Sales Agreement, the Company may from time to time sell, through the sales agent using at-the-market (“ATM”) offerings, shares of Common Stock up to an aggregate offer price of $50.0 million. Under the ATM Sales Agreement, the sales agent will be entitled to compensation at a commission rate of up to 3.0% of the gross sales price per share sold.
During the nine months ended September 30, 2023 there were no sales under the ATM Sales Agreement.
Note 10. Stock-based Compensation
Legacy Stock Plans
In May 2018, the Board of Directors of Momentus Inc. approved the 2018 Stock Plan (the “Initial Plan”) that allowed for granting of incentive and non-qualified stock options and restricted stock awards to employees, directors, and consultants. The Initial Plan was terminated in November 2018. Awards outstanding under the Initial Plan continue to be governed by the terms of the Initial Plan.
In February and March 2020, the Board approved the Amended and Restated 2018 Stock Plan (the “2018 Plan”). No additional grants have been made since 2020 and no new grants will be made from the 2018 Plan, however, the options issued and outstanding under the plan continue to be governed by the terms of the 2018 Plan. Forfeitures from the legacy plans become available under the 2021 Equity Incentive Plan, described below.
2021 Equity Incentive Plan
In connection with the Closing, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), under which 119,658 shares of Common Stock were initially reserved for issuance. The 2021 Plan allows for the issuance of incentive stock options (“ISOs”), non-qualified stock options (“NSOs”), restricted stock awards (“RSAs”), stock appreciation rights (“SARs”), restricted stock units (“RSUs”), and performance awards. The Board of Directors determines the period over which grants become exercisable. The 2021 Plan became effective immediately following the Closing. The 2021 Plan has an evergreen provision which allows for shares available for issuance under the plan to be increased on the first day of each fiscal year beginning with the 2022 fiscal year and ending on (and including) the first day of the 2031 fiscal year, in each case, in an amount equal to the lesser of (i) three percent (3.0%) of the outstanding shares on the last day of the immediately preceding fiscal year and (ii) such number of Shares determined by the Board. During the nine months ended September 30, 2023, the shares available for grant under the 2021 Plan increased by 50,664 and 5,584 due to the evergreen provision and forfeitures from both the Initial Plan and the 2018 Plan, respectively. As of September 30, 2023, there were 39,787 shares remaining available for grant. Grant activity under the 2021 Plan is described below.
2021 Employee Stock Purchase Plan
In connection with the Closing, the Company adopted the Employee Stock Purchase Plan (the “2021 ESPP Plan”), under which 31,909 shares of Common Stock were initially reserved for issuance. The Plan provides a means by which eligible employees of the Company may be given an opportunity to purchase shares of Common Stock at a discount as permitted under the Internal Revenue Code of 1986, as amended. The 2021 ESPP Plan has an evergreen provision which allows for shares available for issuance under the plan to be increased on the first day of each fiscal year beginning with the 2022 fiscal year and ending on (and including) the first day of the 2031 fiscal year, in each case, in an amount equal to the lesser of (i) half a percent (0.5%) of the outstanding shares on the last day of the calendar month prior to the date of such automatic increase and (ii) 31,909 shares. The 2021 ESPP Plan became effective immediately following the Closing. During the nine months ended September 30, 2023, the shares available for issuance under the 2021 ESPP Plan increased by 8,444 due to the evergreen provision. During the nine months ended September 30, 2023, there were 2,131 shares issued under the 2021 ESPP Plan. The Company has an outstanding liability pertaining to the ESPP of $0.09 million as of September 30, 2023, included in accrued expenses, for employee contributions to the 2021 ESPP Plan, pending issuance at the end of the offering period. As of September 30, 2023, there were 43,036 shares remaining available for issuance.
27

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Stock-based Compensation (cont.)
2022 Inducement Equity Plan
In February 2022, the Company adopted the 2022 Inducement Equity Plan (the “2022 Plan”), under which 80,000 shares of Common Stock were initially reserved for issuance. The 2022 Plan allows for the issuance of NSOs, RSAs, SARs, RSUs, and stock bonus awards, subject to certain eligibility requirements. The Board of Directors determines the period over which grants become exercisable and grants generally vest over a four-year period.
On March 21, 2023, the Company adopted the first amendment to the 2022 Plan to increase the number of shares of Common Stock available for issuance under the 2022 Plan from 80,000 shares of Common Stock to 140,000 shares of Common Stock. All other terms of the 2022 Plan remained the same.
On May 8, 2023, the Company adopted the second amendment to the 2022 Plan to increase the number of shares of Common Stock available for issuance under the 2022 Plan from 140,000 shares of Common Stock to 160,000 shares of Common Stock. All other terms of the 2022 Plan remained the same.
As of September 30, 2023, only RSU grants have been made under the 2022 Plan and there were 24,541 shares remaining available for issuance. Grant activity under the 2022 Plan is described below.
Options Activity
The following table sets forth the summary of options activity, under the 2018 Plan and the 2021 Plans, for the nine months ended September 30, 2023:
(in thousands, except share-based data)Total OptionsWeighted- Average Exercise Price Per ShareWeighted- Average Remaining Contractual Term (In Years)Aggregate Intrinsic Value
Outstanding as of December 31, 202251,166 $60.69 
Vested exercised(10,067)12.95 
Forfeitures(15,298)85.82 
Outstanding as of September 30, 202325,801 $64.42 6.8$ 
Exercisable as of September 30, 202319,067 $47.89 6.3$ 
Vested and expected to vest as of September 30, 202325,801 $64.42 6.8$ 
As of September 30, 2023, there was a total of $0.4 million in unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of 1.2 years.
The total intrinsic value of options exercised during the three and nine months ended September 30, 2023 was $0.00 million and $0.2 million, respectively, and during the three and nine months ended September 30, 2022, and $0.7 million and $4.9 million, respectively.
28

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Stock-based Compensation (cont.)
Restricted Stock Unit and Restricted Stock Award Activity
The following table sets forth the summary of RSU and RSA activity, under the Initial Plan, the 2018 Plan, the 2021 Plan, and the 2022 Plan, for the nine months ended September 30, 2023. RSAs were an immaterial portion of activity for the period:
SharesWeighted Average Grant Date Fair Value (i.e. Share Price)
Outstanding as of December 31, 2022155,573 $199.74
Granted211,509 27.33 
Vested(37,627)200.98 
Forfeited(64,540)117.92 
Outstanding as of September 30, 2023264,915 $81.94 
As of September 30, 2023, there was a total of $17.6 million in unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.6 years. Outstanding unvested and expected to vest RSUs had an intrinsic value of $0.5 million.
Stock-based Compensation
The following table sets forth the stock-based compensation under the Initial Plan, the 2018 Plan, the 2021 Plan, and the 2022 Plan by expense type:
Three Months Ended
September 30,
Nine Months Ended September 30,
(in thousands)2023202220232022
Research and development expenses$472 $737 $1,629 $1,624 
Selling, general and administrative expenses1,684 2,552 4,824 6,911 
Total$2,156 $3,289 $6,453 $8,535 
The following table sets forth the stock-based compensation under the Initial Plan, the 2018 Plan, the 2021 Plan, and the 2022 Plan by award type:
Three Months Ended
September 30,
Nine Months Ended September 30,
(in thousands)2023202220232022
Options$81 $106 $269 $357 
RSUs & RSAs2,068 3,096 6,167 8,079 
ESPP7 45 17 127 
Performance Awards$ $42  (28)
Total$2,156 $3,289 $6,453 $8,535 
Performance Awards
Performance awards under the 2021 Plan are accounted for as liability-classified awards, as the obligations are typically a fixed monetary amount which is settled on a future date in a variable number of shares of the Company’s Common Stock. The variable number of potentially settled shares is not limited. Performance awards are measured at their fair value based on management’s estimates of potential outcomes of the performance. Outstanding performance awards correspond to zero shares if they were settled on September 30, 2023.
Issuance of Common Stock to Non-employees
During the three months ended March 31, 2023, the Company issued 2,700 shares of the Company’s Common Stock to a third party consulting firm in exchange for public relations services. The shares were not issued under the equity incentive plans described above. Under the agreement, the shares are contingently forfeitable in the event of early termination by the Company. The shares had an issuance date fair value of $0.1 million to be recorded as consulting
29

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Stock-based Compensation (cont.)
expense over the six-month term of the agreement. Related consulting expense of $0.1 million was recognized during the six months ended June 30, 2023. The Company issued no shares to non-employees in the current quarter.
Note 11. Diluted Earnings Per Share
Net Loss Per Share
Net loss per share is provided in accordance with ASC 260-10, Earnings Per Share. Basic earnings per share is computed by dividing net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period. It is computed by dividing undistributed earnings allocated to common stockholders for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding preferred shares, options and unvested stock units, and warrants outstanding pursuant to the treasury stock method.
As the Company incurred a net loss for the three and nine months ended September 30, 2023 and 2022, the inclusion of certain options, unvested stock units, warrants, and contingent Sponsor Earnout Shares in the calculation of diluted earnings per share would be anti-dilutive and, accordingly, were excluded from the diluted loss per share calculation.
The following table summarizes potential common shares that were excluded as their effect is anti-dilutive:
Three Months Ended
September 30,
Nine Months Ended September 30,
2023202220232022
Options and unvested stock units outstanding296,861 211,821 235,736 124,860 
Warrants outstanding629,271 397,950 629,271 399,548 
Contingent Sponsor Earnout Shares28,750 28,750 28,750 28,750 
Total954,882 638,521 893,757 553,158 
Note 12. Commitments and Contingencies
Purchase Obligations
Momentus enters 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. As of September 30, 2023, the Company’s future unconditional purchase obligations are as follows:
(in thousands)
Remainder of 202315,226 
2024600 
Total$15,826 
Legal Proceedings
Securities Class Actions
On July 15, 2021, a purported stockholder of SRAC filed a putative class action complaint against SRAC, SRC-NI Holdings, LLC ("Sponsor"), Brian Kabot (SRAC CEO), James Norris (SRAC CFO), Momentus, and the Company's co-founder and former CEO, Mikhail Kokorich, in the United States District Court for the Central District of California, in a case captioned Jensen v. Stable Road Acquisition Corp., et al., No. 2:21-cv-05744 (the "Jensen class action"). The complaint alleges that the defendants omitted certain material information in their public statements and disclosures regarding the Business Combination, in violation of the securities laws, and seeks damages on behalf of a putative class of stockholders who purchased SRAC stock between October 7, 2020 and July 13, 2021. Subsequent complaints captioned Hall v. Stable Road Acquisition Corp., et al., No. 2:21-cv-05943 and Depoy v. Stable Road Acquisition Corp., et al., No. 2:21-cv-06287 were consolidated in the first filed matter (collectively,
30

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Commitments and Contingencies (cont.)
referred to as the "Securities Class Actions"). An amended complaint was filed on November 12, 2021. The Company disputes the allegations in the Securities Class Actions.
On February 10, 2023, the lead plaintiff in the Securities Class Actions and the Company reached an agreement in principle to settle the Securities Class Actions. Under the terms of the agreement in principle, the lead plaintiff, on behalf of a class of all persons that purchased or otherwise acquired Company stock between October 7, 2020 and July 13, 2021, inclusive, would release the Company from all claims asserted or that could have been asserted in the Securities Class Actions and dismiss such claims with prejudice, in exchange for payment of $8.5 million by the Company (at least $4.0 million of which is expected to be funded by insurance proceeds).
On April 10, 2023, the parties filed a Notice of Settlement with the Court, and on August 18, 2023, the parties executed a Settlement Agreement. On August 30, 2023 the lead plaintiff filed a Motion for Preliminary Approval of Class Action Settlement, and the Court entered an Order Preliminarily Approving Settlement and Providing for Notice on September 21, 2023. Pursuant to that Order, the deadline for the deposit of funds into the settlement escrow account originally was October 5, 2023. With $5.0 million of the $8.5 million settlement amount deposited in the settlement escrow account. The Company requested an extension of the deadline to deposit the balance of the funds, and the parties negotiated an extension of that deadline to October 12, 2023. The deadline extension was granted by Court Order dated, October 10, 2023.

On October 23, 2023, lead plaintiff filed a Motion to Enforce Settlement Agreement with a hearing on the motion set for November 20, 2023. The Company filed a response to the motion on October 30, 2023. As of the date of the filing of this Form 10-Q, the parties continue to discuss an extension of the deadline for the deposit of $3.5 million the balance of the settlement escrow account funds.

The settlement agreement remains subject to the satisfaction of various conditions, including negotiation and execution of a memorandum of understanding, final stipulation of settlement, notice to the proposed class, and approval by the United States District Court for the Central District of California. If these conditions are satisfied, the proposed settlement will resolve all claims in the Securities Class Actions against the Company (except as to any shareholders that may elect to opt-out of the class). The Company and the other defendants have denied and continue to deny each and all of the claims alleged in the Securities Class Actions, and the proposed settlement contains no admission of liability, wrongdoing or responsibility by any of the defendants. In the event that the Company is unable to execute a final stipulation of settlement and obtain Court approval, the Company will continue to vigorously defend against the claims asserted in the Securities Class Actions.

As a result of the agreement to settle the Securities Class Action, the Company recorded a litigation settlement contingency of $8.5 million. The Company additionally recorded an insurance receivable of $4.0 million for the insurance proceeds expected from its insurers related to the settlement. The net amount of $4.5 million was recognized in litigation settlement, net during the year ended December 31, 2022.
CFIUS Review
In February 2021, the Company and Mikhail Kokorich submitted a joint notice to the CFIUS for review of the historical acquisition of interests in the Company by Mr. Kokorich, his wife, and entities that they control in response to concerns of the U.S. Department of Defense regarding the Company’s foreign ownership and control. On June 8, 2021, the U.S. Departments of Defense and the Treasury, on behalf of CFIUS, Mr. Kokorich, on behalf of himself and Nortrone Finance S.A. (an entity controlled by Mr. Kokorich), Lev Khasis and Olga Khasis, each in their respective individual capacities and on behalf of Brainyspace LLC (an entity controlled by Olga Khasis) entered into the NSA.
In accordance with the NSA and pursuant to stock repurchase agreements entered into with the Company, effective as of June 8, 2021, each of Mr. Kokorich, Nortrone Finance S.A. and Brainyspace LLC (collectively “the Co-Founders”) agreed to sell 100% of their respective equity interests in the Company on June 30, 2021. The Company paid an aggregate of $40 million to the Co-Founders following the Business Combination, and an additional payment of an aggregate of $10 million was payable within 10 business days after cumulative business combination or capital raising transactions (whether in the form of debt or equity) resulted in cash proceeds to the Company of no less than $250 million.
31

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Commitments and Contingencies (cont.)
On February 27, 2023 the Company raised aggregate gross proceeds of $10.0 million through the sale of securities (see Note 9 for additional information), which together with the Business Combination and other capital raising activities triggered the $10.0 million liability to the Co-Founders in accordance with the terms of the stock repurchase agreements. The amount had previously been recorded as an estimated liability with a corresponding offset to additional paid in capital within the condensed consolidated statements of stockholders’ equity as of December 31, 2022.
The NSA establishes various requirements and restrictions on the Company to protect U.S. national security, certain of which may materially and adversely affect the Company’s operating results due to the cost of compliance, limitations on the Company’s control over certain U.S. facilities, contracts, personnel, vendor selection and operations, and any potential penalties for noncompliance with such requirements and restrictions. The NSA provides for quarterly compliance auditing by an independent auditor. The NSA further provides for liquidated damages up to $1,000,000 per breach of the NSA. If the CFIUS Monitoring Agencies, the U.S. Departments of Defense and Treasury, find noncompliance, the CFIUS Monitoring Agencies could impose penalties, including liquidated damages.
The Company incurred legal expenses related to these matters of approximately $0.1 million and $0.3 million for the three and nine months ended September 30, 2023, respectively, and $0.3 million and $1.6 million for the three and nine months ended September 30, 2022, respectively, and expects to continue to incur legal expenses in the future.
Shareholder Section 220 Litigation
On June 16, 2022, Plaintiff and the Company’s shareholder James Burk filed a verified complaint against the Company in the Delaware Court of Chancery, Case. No. 2022-0519, to inspect the books and records of the Company pursuant to Section 220 of the Delaware General Corporation Law. Plaintiff seeks production of books and records relating to the management of the Company and its disclosures to potential investors in connection with the Business Combination. On March 14, 2023, the Court granted the parties stipulation of dismissal with prejudice, and the matter was closed. The Company from time to time responds to books and records requests properly submitted pursuant to applicable Delaware law.
Shareholder Derivative Litigation
On June 20, 2022, a shareholder derivative action was filed by Brian Lindsey, on behalf of the Company, in the U.S. District Court for the Central District of California, Case No. 2:22-cv-04212, against the Company (as a nominal defendant), SRAC, Brian Kabot, Juan Manuel Quiroga, James Norris, James Hofmockel, Mikhail Kokorich, Dawn Harms, Fred Kennedy, Chris Hadfield, Mitchel B. Kugler, Victorino Mercado, Kimberly A. Reed, Linda J. Reiners, and John C. Rood. This derivative action alleges the same core allegations as stated in the securities class action litigation. Defendants dispute the allegations as stated in this derivative action. On September 27, 2022, Plaintiff filed his Notice of Voluntary Dismissal without Prejudice seeking to dismiss the case. Because Plaintiff’s dismissal of this derivative action was voluntary and without prejudice, this plaintiff and/or other shareholders may seek to re-file the claims asserted in this matter at a later date. As noted below, Brian Lindsey re-filed a shareholder derivative action in Delaware Chancery Court on June 30, 2023.

On January 25, 2023, a shareholder derivative action was filed by Melissa Hanna, on behalf of the Company, in the US District Court for the Northern District of California, Case No. 5:23-cv-00374, against the Company (as a nominal defendant), SRAC, Brian Kabot, Juan Manuel Quiroga, James Norris, James Hofmockel, Mikhail Kokorich, Dawn Harms, Fred Kennedy, Chris Hadfield, Mitchel B. Kugler, Victorino Mercado, Kimberly A. Reed, Linda J. Reiners, and John C. Rood (the “Derivative Action II”). The Derivative Action II alleges the same core allegations as stated in the Securities Class Actions, and also claims that the Company ignored and/or refused a prior demand made by Ms. Hanna on the Company’s Board of Directors. This matter had been stayed until at least August 2023. The Company intends to vigorously defend the litigation.

On April 25, 2023, a shareholder derivative action was filed by Justin Rivlin, purportedly on behalf of the Company, in the United States District Court for the District of California, Case No. 2:23-cv-03120, against the Company (as a nominal defendant), Brian Kabot, James Norris, Marc Lehmann, James Hofmockel, and Ann Kono. The Rivlin derivative action alleges the same core allegations as stated in the Securities Class Actions. The Company has filed a motion to dismiss the complaint on the grounds that the claims are time-barred and that the plaintiff was not excused from making a demand on the Company before filing the lawsuit. The Company intends to vigorously defend the litigation. On August 4, 2023, the plaintiff in the Rivlin action responded to the Company’s motion to dismiss by
32

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Commitments and Contingencies (cont.)
filing an amended complaint adding new claims and new defendants, including existing Board members Chris Hadfield, Mitchel B. Kugler, Kimberly A. Reed, Linda J. Reiners and John C. Rood.

On June 30, 2023, a shareholder derivative action was filed by Brian Lindsey, purportedly on behalf of the Company in the Court of Chancery for the State of Delaware (Case No. 2023-0674), against the Company (as a nominal defendant), Juan Manuel Quiroga, James Norris, James Hofmockel, Stable Road Acquisition Corp., SRC-NI Holdings, LLC, Mikhail Kokorich, Brian Kabot, Dawn Harms, Fred Kennedy, Chris Hadfield, Mitchel B. Kugler, Victorino Mercado, Kimberly A. Reed, Linda J. Reiners and John C. Rood. The Lindsey derivative action alleges the same core allegations as stated in the Securities Class Actions. The Company intends to vigorously defend the litigation.

The Company and other defendants held a joint mediation on October 25, 2023 with the plaintiffs in the Hanna, Rivlin and Lindsey derivative actions. The mediation did not result in a settlement at that time, but the parties are continuing to discuss possible settlement. If the cases do not settle, the Company intends to defend the action vigorously. The deadline for the Company and the other defendants to answer or move to dismiss each of the derivative actions is December 4, 2023.
SAFE Note Litigation
On July 20, 2022, The Larian Living Trust ("TLLT") filed an action against the Company in New Castle County Superior Court, Delaware, in the Complex Commercial Litigation Division, Case No. N22C-07-133 EMD CCLD. TLLT pleads claims for fraudulent inducement and breach of contract arising from two investment contracts pursuant to which TLLT alleges it invested $4.0 million in the Company. TLLT alleges that a "liquidity event" occurred when the Company closed the Business Combination, such that it was entitled to the greater of its $4.0 million investment or its “Conversion Amount” of the Company’s shares, which was a total of 14,500 shares of the Company’s stock. TLLT further alleges that the Company refused to provide it the conversion amount of shares until April 2022, at which point the value of its shares had dropped significantly from their peak value in August of 2021, in excess of $7.6 million. TLLT seeks damages in excess of $7.6 million, in addition to interests and its attorney's fees and costs. On March 16, 2023, the Company’s motion to dismiss TLLT’s claims was denied and the parties will move forward with discovery. On July 13, 2023, the Company filed a motion for partial summary judgment. The hearing on the Company’s motion for partial summary judgment is set for November 8, 2023, TLLT filed an Answering Brief on September 15, 2023, and the Company filed a Reply Brief on October 16, 2023. The Company disputes the allegations in the complaint and intends to vigorously defend the litigation.
Founder Litigation
On June 8, 2021, former co-founders and shareholders of the Company, Mikhail Kokorich and Lev Khasis signed the NSA alongside stock repurchase agreements, whereby they agreed to divest their interests in the Company in exchange for a cash payments and other considerations. As part of the NSA and stock repurchase agreements, Messrs. Kokorich and Khasis agreed to a broad waiver and release of all claims (broadly defined) against the Company. The Company has maintained that this release is effective as to various advancement and indemnification claims either individual may have against the Company.
Both Messrs. Kokorich and Khasis have, through counsel, disagreed with the Company’s position. For example, Mr. Kokorich is named as a defendant in the securities class action pending against the Company and other defendants, although he has not been served nor appeared in those matters. In addition, Mr. Kokorich is the sole defendant in a civil litigation action filed against him by the Securities and Exchange Commission, which remains pending in the US District Court for the District of Columbia, Case No. 1:21-cv-01869. Mr. Kokorich has demanded indemnification and advancement from the Company for his fees and costs incurred in these actions, which claims are disputed by the Company.
The Company continues to maintain that Mr. Kokorich’s release in the NSA and stock repurchase agreements is effective as to his claims for advancement and indemnification in these litigation matters. On August 16, 2022, Mr. Kokorich filed a verified complaint against the Company in the Delaware Court of Chancery (Case. No. 2022-0722) seeking indemnification and advancement from the Company. Following the Company filing a motion to dismiss this action, on November 14, 2022, Mr. Kokorich filed an amended complaint. Additional motions to dismiss and replies were filed and considered at a hearing on February 2, 2023. The Delaware Chancery Court granted the Company’s motion to dismiss the Kokorich indemnification claim action on May 15, 2023.On June 13, 2023, Kokorich filed a notice of appeal. On July 28, 2023, Kokorich filed Appellant’s Brief. The Company filed Appellee’s Answering Brief on August 28, 2023, and Kokorich filed a Reply Brief on September 15, 2023. The oral
33

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Commitments and Contingencies (cont.)
argument on Kokorich’s appeal is scheduled for Novermber 15, 2023. The Company continues to dispute the allegations in the complaint and intends to vigorously defend the litigation on appeal.

On March 24, 2023, Mr. Khasis filed a verified complaint against the Company in the Delaware Court of Chancery (Case. No. 2023-0361) seeking indemnification and advancement of expenses from the Company. On April 17, 2023, the Company filed a motion to dismiss. On May 16, 2023. Mr. Khasis filed an amended complaint. On May 23, 2023, Momentus filed a motion to dismiss the amended complaint. Separately, Khasis has requested an expedited trial in his claim for advancement of fees. On June 23, 2023, the Court of Chancery ordered that Khasis indemnification litigation will not be stayed pending the appeal of the Kokorich. Moreover, the Court of Chancery further ordered the parties to prepare a scheduling order to the Court which includes all relevant deadlines to argue the Company’s motion to dismiss and Khasis’ expedited motion for advancement concurrently. The parties are currently negotiating concerning an acceptable schedule. On October 17, 2023, the parties reached an agreement to stay the proceeding until January 1, 2024. The Company disputes the allegations in the complaint and intends to vigorously defend the litigation.
Delaware Class Actions
On November 10, 2022, purported stockholders filed a putative class action complaint against Brian Kabot, James Hofmockel, Ann Kono, Marc Lehmann, James Norris, Juan Manuel Quiroga, SRC-NI Holdings, LLC, Edward K. Freedman, Mikhail Kokorich, Dawn Harms, Fred Kennedy, and John C. Rood in the Court of Chancery of the State of Delaware, in a case captioned Shirley, et al. v. Kabot et al., 2022-1023-PAF (the “Shirley Action”). The complaint alleges that the defendants made certain material misrepresentations, and omitted certain material information, in their public statements and disclosures regarding the Proposed Transaction, in violation of the securities laws, and seeks damages on behalf of a putative class of stockholders who purchased SRAC stock on or before August 9, 2021.

On March 16, 2023, purported stockholders of the Company filed a putative class action complaint against certain current and former directors and officers of the Company in the Delaware Court of Chancery, in a case captioned Lora v. Kabot, et al., Case No. 2023-0322 (the “Lora Action”). Like the Shirley complaint, the complaint alleges that the defendants made certain material misrepresentations, and omitted certain material information, in their public statements and disclosures regarding the Business Combination in violation of the securities laws, and seeks damages on behalf of a putative class of stockholders who purchased SRAC stock on or before August 9, 2021.

On March 17, 2023, purported stockholders of the Company filed a putative class action complaint against certain current and former directors and officers of the Company in the Delaware Court of Chancery, in a case captioned Burk v. Kabot, et al., Case No. 2023-0334 (the “Burk Action”). Like the Lora and Shirley complaints, the Burk complaint alleges that the defendants made certain material misrepresentations, and omitted certain material information, in their public statements and disclosures regarding the Business Combination in violation of the securities laws, and seeks damages on behalf of a putative class of stockholders who purchased SRAC stock on or before August 9, 2021.

On May 26, 2023, plaintiffs filed a stipulation and proposed order for consolidation and appointment of co-lead plaintiffs and co-lead plaintiffs’ counsel designating the complaint filed in the Lora Action as the operative complaint.On June 30, 2023, the defendants each filed a motion to dismiss the complaint. On October 26, 2023, plaintiff’s filed their answering briefs in opposition to the motions to dismiss, and the defendants’ reply briefs are due to be filed on or before December 14, 2023, and a hearing on the motions to dismiss is scheduled for February 1, 2023.

The Shirley Action, the Lora Action, and the Burk Action have been consolidated under the caption, In re Momentus, Inc. Stockholders Litigation, C.A. No. 2022-1023-PAF (Del Ch. Nov. 10, 2022). These putative class actions do not name the Company as a defendant. Regardless, the SRAC directors and officers, together with current and former directors and officers of the Company, have demanded indemnification and advancement from the Company, under the terms of the merger agreement and the exhibits thereto, the Delaware corporate code, the Company’s bylaws, and their individual indemnification agreements. The Company may be liable for the fees and costs incurred by the defendants, and has an obligation to advance such fees during the pendency of the litigation. The Company understands that the defendants dispute the allegations in the complaint and intend to vigorously defend against any such litigation.
34

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Commitments and Contingencies (cont.)


Threatened Claims

On October 23, 2023, Stephen J. Purcell, on behalf of the law firm Purcell & Lefkowitz LLP, threatened to file a legal proceeding to receive attorney’s fees in the amount of $80,000 related to a stockholder litigation demand letter submitted to Momentus, dated July 20, 2021 on behalf of Joel Zalvin, a purported stockholder of Momentus. The stockholder litigation demand letter asserted that the vote to increase the number of shares of Class A common stock of Momentus at the special meeting of stockholders on August 11, 2021 was conducted in violation of Delaware law. On March 14, 2023, the Delaware Court of Chancery granted the Company’s request pursuant to 8 Del. C. §205, or Section 205 of the Delaware General Corporation Law (the “Petition”) in order to validate and declare effective the Second Amended and Restated Certificate of Incorporation of the Company and validate and declare effective the shares of the Company’s Class A Common Stock issued in reliance on such provisions of the Second Amended and Restated Certificate of Incorporation of the Company as of the date of the original issuance of such shares. Further on March 14, 2023, the Court of Chancery entered an order under 8 Del. C. §205 (i) declaring the Second Amended and Restated Certificate of Incorporation of the Company, including the filing and effectiveness thereof, as validated and effective retroactive to the date of its filing with the Office of the Secretary of State of the State of Delaware on August 12, 2021, and (ii) ordering that the Company’s Class A Common Stock (and the issuance of the Class A Common Stock) described in the Petition and any other securities issued in reliance of the validity of the Second Amended and Restated Certificate of Incorporation of the Company are validated and declared effective, each as of the original issuance dates. Momentus did not take action in response to the July 20, 2021 demand letter, but rather filed the Petition over one year later, following a decision by the Delaware Chancery Court that created uncertainty as to the validity of the Company’s Second Amended and Restated Certificate of Incorporation. Accordingly, Momentus believes that the threatened claim is without merit and intends to vigorously defend any such claim if brought.

Prior to the close of the Business Combination, Alex Ciccotelli, represented by Rigrodsky Law, sent SRAC a disclosure demand letter dated November 9, 2020, and Jeffrey Justice II, represented by Grabar Law Office, sent SRAC a disclosure demand letter dated August 3, 2021. Mr. Ciccotelli then filed a civil action against SRAC. After receiving various shareholder disclosure demands, SRAC voluntarily issued certain pre-closing supplemental disclosures, without admission, as stated in its August 5, 2021 Form 8-K filing. The Ciccotelli action was thereafter dismissed as moot. On March 20, 2023, Rigrodsky Law threatened to file a fee petition seeking an award of fees and expenses if the Company does not agree to pay a mootness fee, and more recently, in October 2023, reiterated the demand on behalf of Messrs. Ciccotelli and Justice for payment of mootness fees. The Company maintains that, while certain amendments were made by SRAC to pre-closing disclosures, none of the disclosures made was material and the Company disputes that the claims for fees have merit.
Other Litigation and Related Matters
These and other litigation matters may be time-consuming, divert management’s attention and resources, cause the Company to incur significant defense and settlement costs or liability, even if we believe the claims asserted against us are without merit. We intend to vigorously defend against all such claims. Because of the potential risks, expenses and uncertainties of litigation, as well as claims for indemnity from various of the parties concerned, we may from time to time, settle disputes, even where we believe that we have meritorious claims or defenses. Because litigation is inherently unpredictable, further compounded by various claims for indemnity which may or may not be fully insured, we cannot assure that the results of these actions, either individually or in the aggregate, will not have a material adverse effect on our operating results and financial condition.
From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business on in connection with the matters discussed above. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these matters will not have a material adverse effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of judgment, defense and settlement costs, diversion of management resources and other factors.
35

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12. Commitments and Contingencies (cont.)
At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450-20. Legal fees are expensed as incurred.
Note 13. Income Taxes
The Company’s effective tax rate for the three and nine months ended September 30, 2023 and 2022, respectively, was zero percent. The effective tax rate may vary significantly from period to period and can be influenced by many factors. These factors include, but are not limited to, changes to the statutory rates in the jurisdictions where the Company has operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21% primarily relates to certain nondeductible items, state and local income taxes, the absence of current income tax, and a full valuation allowance for deferred tax assets.
Note 14. Subsequent Events
Registered Direct Securities Sale
On October 2, 2023, the Company entered into an agreement to sell 290,000 shares of Class A common stock, at a purchase price of $2.00 per share, resulting in total gross proceeds of approximately $4.0 million before deducting placement agent commissions and other estimated offering expenses (the “October Offering”).
As part of the October Offering, the Company issued to the investor (i) 1,710,000 pre-funded warrants (the “October Pre-Funded Warrants”) and (ii) 2,000,000 warrants with a strike price of $2.00 (the “October Warrants”). The October Warrants will be exercisable immediately after issuance and will expire five years from the date of issuance. The offering closed on October 4, 2023.
In connection with the October Offering, the Company also agreed to amend each of the Series A Warrants, Series B Warrants, and February Class A Warrants to purchase up to an aggregate of 672,948, 672,948, and 231,321 shares of Class A common stock, respectively, at an exercise price of $7.18 per share. Prior to amendment, the Series A Warrants and February Class A Warrants had a termination date of September 11, 2028 and the Series B Warrants had a termination date of September 11, 2024. Upon amendment, each of the Series A Warrants, Series B Warrants, and February Class A Warrants will have a reduced exercise price of $2.00 per share and a termination date of October 4, 2028.
Immediately after modification on October 4, 2023, the Company issued 672,948 shares of Class A common stock as a result of the exercise of the Series B Warrants and received cash proceeds of approximately $1.3 million.
Securities Class Action Escrow Account Payment
On October 5, 2023, in relation to the Securities Class Action litigation settlement contingency (refer to Note 12), the Company paid $1.0 million into the lead plaintiff’s escrow account. Insurance carrier made an additional $0.5 million payment to that same escrow account resulting in a reduction to the litigation settlement contingency to $3.5 million.
Founder Litigation Payment
On October 18, 2023, in relation to the Founder Litigation (refer to Note 12), the Company paid Lev Khasis $0.1 million related to Mr. Khasis’ legal expenses.
Warrant Inducement Agreement
On November 7, 2023, the Company entered into a warrant inducement agreement with an investor. Pursuant to the warrant inducement agreement, the Company agreed to issue new warrants to purchase up to 5,808,538 shares of the Company’s Class A common stock, with a strike price of $3.86 per share, in consideration of the investor’s agreement to exercise the 672,948, 231,321, and 2,000,000 of Series A Warrants, February Class A Warrants, and October Warrants. The new warrants will be exercisable immediately after issuance and will expire five years from the date of issuance. The transactions contemplated by the warrant inducement agreement closed on November 9, 2023.
In connection with the warrant inducement agreement, on November 9, 2023 investor paid gross proceeds of approximately $6.5 million, before deducting offering fees and other expenses payable by the Company,
36

Tables of Contents
MOMENTUS INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
representing the exercise price of $2.00 per share for the 2,904,269 shares of Class A common stock issuable upon the exercise of the Series A Warrants, February Class A Warrants and October Warrants, plus an additional $0.25 consideration per share. On November 9, 2023, only 1,188,269 shares of Class A common stock were delivered to the investor due to beneficial ownership limitations on the exercise of the Series A Warrants, February Class A Warrants and October Warrants, with the remaining 1,716,000 shares deliverable to the investor in accordance with the beneficial ownership limitations in the respective warrant agreements.
F-37

Tables of Contents

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our results of operations and financial condition. This discussion and analysis should be read together with our audited and unaudited financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”) and Annual Report on Form 10-K filed with the SEC on March 8, 2023. This discussion and analysis should also be read together with our financial information for the period ended and as of September 30, 2023. In addition to historical financial information, this discussion and analysis contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks, uncertainties and assumptions. As a result of many factors, such as those set forth under the “Risk Factors” under Part II, Item 1A: "Risk Factors," in this Form 10-Q and under Part I, Item 1A in our Annual Report on Form 10-K filed with the SEC on March 8, 2023, and “Cautionary Statement Regarding Forward-Looking Statements” elsewhere in this Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.
Certain figures, such as interest rates and other percentages, included in this section have been rounded for ease of presentation. Percentage figures included in this section have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our financial statements or in the associated text. Certain other amounts that appear in this section may similarly vary slightly due to rounding.
Overview
Momentus offers satellite buses, and transportation and infrastructure services to help enable the commercialization of space and support the missions of U.S. and friendly government missions. Satellite operators are our target commercial customers. Momentus is also seeking business in support of U.S. Government missions for Departments and Agencies like NASA and the Department of Defense.

Services that we plan to provide include provision of satellite buses, integration of payload instruments, “last mile” satellite transportation, payload-hosting, on-orbit satellite refueling, on-orbit inspection, on-orbit satellite maintenance, de-orbiting, debris removal, and other satellite-to-satellite service offerings.
Our transportation service offering will focus on delivering our customers’ satellites to precision orbits of their choosing. To accomplish this, we plan to create a hub-and-spoke transportation network in partnership with leading launch service providers, such as SpaceX. Under this model, our customers’ satellites would “ride share” from Earth to space on a midsized or large rocket. Our Orbital Service Vehicles (“OSVs”) would then provide “last mile” transportation services from the rocket’s drop-off orbit to a custom orbit of the satellite operator’s choosing. We believe our hub-and-spoke model has the potential to expand our customers’ deployment options relative to what they would be able to achieve with ride share launch alone, while reducing their costs relative to what they could achieve with a dedicated small launch vehicle. Over time, we plan to begin introducing additional services beyond “last mile” transportation.
Since our founding in 2017, we have been working to develop, test and enhance our vehicles and supporting technologies, particularly our water plasma propulsion technology. In general, our customers have the right to cancel their contracts with the understanding that they will forgo their deposits. If a customer cancels a contract before it is required to pay non-refundable deposits, we may not receive revenue from these orders, except for an initial deposit which is paid at the time the contract is signed.
Our services are made possible by the space industry’s rapid technological developments over the past two decades, driven predominantly by significant decreases in launch costs, as well as the advent of smaller, lower-cost satellites. The convergence of these trends has resulted in substantial growth in the commercial space market, rooted in higher accessibility for companies entering the new space economy that aim to offer communication, earth observation and data collection services, and other satellite services.
We anticipate potential considerable growth over the coming years in the space transportation segment as companies continue to seek versatile and low-cost ways to deliver single satellites to specific orbits or deploy their satellite constellations. We anticipate that the need for small satellite transportation to low-earth orbit will continue to drive overall demand growth for space transportation services in the short-term as technology advancements continue to make space more accessible to new market entrants, although new applications beyond low-earth orbit are also emerging. We also believe that over the next decade, new space-based businesses may emerge, for example the
38

Table of Contents
generation of solar energy in space, space manufacturing or space data processing. The advent of these new business models could substantially increase demand for space transportation and other space infrastructure services.
Beyond transportation, we anticipate that growth of the satellite constellations market may drive demand for our hosted payload, on-orbit satellite refueling, on-orbit inspection, on-orbit satellite maintenance, de-orbiting, debris removal, and other satellite-to-satellite service offerings, if we are successful in executing on our business plan, including fully developing and validating our technology in space. Satellite constellations have relatively short lifespans and, in our view, will require maintenance, de-orbiting, and other general servicing with higher frequency.
Momentus has developed the M-1000 satellite bus that the company is offering to both commercial and U.S. government customers. The market for satellite buses in this class is substantial and growing. The M-1000 satellite bus is based on the Vigoride OSV and has substantial commonality.
On January 3, 2023, the Company launched its Vigoride 5 OSV to Low-Earth Orbit aboard the SpaceX Transporter-6 mission. The mission is ongoing and the Vigoride 5 OSV is maneuvering under its own power in low-earth orbit. The primary mission objective is to test the spacecraft on orbit, learn from any issues that are encountered and implement lessons-learned on future Vigoride vehicles and missions. The mission also supported two customers: the Qosmosys Zeus-1 payload which was deployed on orbit on May 10, 2023, and Caltech’s Space Solar Power Demonstrator project, a hosted payload for which the Vigoride 5 continues to provide thrusting maneuvers and on-orbit support, including providing data, power, communication, commanding and telemetry, and resources for optimal picture taking and solar cell lighting.
As part of the Vigoride 5 mission, we successfully completed the initial tests on-orbit of the pioneering Microwave Electrothermal Thruster (MET) that relies on solar power and uses distilled water as a propellant. The MET is the Vigoride OSV’s primary propulsion method that produces thrust by expelling extremely hot gases through a rocket nozzle. Unlike a conventional chemical rocket engine, which creates thrust through a chemical reaction, the MET is designed to create a plasma and thrust using solar power to drive a microwave energy source that heats the water propellant. Momentus has two patents in support of this proprietary propulsion technology.

The recent MET testing done on-orbit included dozens of firings of the thruster that imparted forces on the Vigoride 5 spacecraft. These forces can change the orbital velocity of the spacecraft, allowing the orbit to be adjusted, changing parameters such as altitude and orbital inclination. This capability allows Momentus to deliver its customers’ payloads to custom orbits. Momentus has used the MET to change the spacecraft altitude during the current Vigoride 5 mission.

The Vigoride OSV’s Attitude Control and Reaction Control Systems also use water as a propellant and were recently tested and fully commissioned. With its water-based propulsion systems, Momentus aims to offer cost-effective, efficient, safe, and environmentally friendly propulsion to meet the demands for in-space transportation and infrastructure services.
On April 15, 2023, the Company launched its Vigoride 6 OSV to low-earth orbit aboard the SpaceX Transporter-7 mission and used Vigoride 6 OSV to support the deliveries of six customer payloads, including two satellites for the NASA LLITED mission.
The Vigoride 6 mission is also hosting a Momentus technology demonstration of a new kind of solar array. The Tape Spring Solar Array (TASSA) technology features large sheets of flexible solar cells bonded to tape springs. To stow, they are tightly coiled around a mandrel. After launch, motors unroll the mandrel, deploying the solar array. Momentus aims to drive down vehicle production costs and streamline on-orbit operations, while reducing the cost of power for the satellite, with this technology once operational.
Our ability to execute on our business plan is dependent on the continued development and successful commercialization of the technologies described in this Form 10-Q. We believe our water plasma propulsion technology will be a key differentiator of our product offerings, and preliminary in-space tests are successful, however there can be no assurance that it can be operated in a manner that is sufficiently reliable and efficient to permit full commercialization of the technology. Development of space technologies is extremely complex, time consuming, and expensive, and there can be no assurance that our predicted theoretical and ground-based results will translate into operational space vehicles that operate within the parameters we expect, or at all. This Form 10-Q describes Momentus’ current business plans for continuing to develop its technology and marketing and commercializing its products, however there can be no assurance that Momentus will be able to successfully develop its technologies and implement them in commercially viable vehicles.

39

Table of Contents
Services Overview
When our technology is fully developed and validated in the future, we currently plan to provide the following infrastructure services to the space economy:
Space Transportation. We are developing a space transportation service based on a hub-and-spoke model, which combines ride share launch on a medium or large rocket with last-mile delivery using one of our OSVs. Under this model, our customers will deliver their payload to us a few months prior to launch for integration onto our vehicle. Once we have integrated our customers’ payloads, we will then ship our vehicle, holding the customer payload fixture, to the launch site, where it will be integrated onto the rocket. The rocket will then transport our vehicle to the drop-off orbit. After separation from the rocket, our vehicle will transport our customers’ payloads to their chosen final orbit.
We build our water plasma thrusters to enable our vehicle to efficiently transport each customer payload to its respective orbit. We believe our hub-and-spoke model has the potential to expand our customers’ deployment options relative to what they could achieve with ride share launch alone, while reducing their costs relative to what they could achieve with a dedicated small launch vehicle.
Initially, our vehicles will de-orbit after delivering our customer payloads to their final orbits. Ultimately, our plan is to develop the capability for our vehicles to be reusable, such that, upon delivery of the payload, they will be capable of remaining in space to conduct additional missions.
Hosted Payload. We are developing a modular approach to satellite systems through our hosted payload service. This service is designed to help our customers avoid a meaningful capital outlay to design and manufacture a bespoke satellite as they would under traditional business models, which assumed tight integration of a given payload with its satellite bus. We have designed our transfer vehicles for modularity and ease of integration with customer payloads, with a full suite of capabilities that our customers will need on orbit. Under our hosted payload model, after transporting a customer payload to a specific orbit our vehicle would stay connected to the payload for the duration of its mission to provide continuous power, orbit maintenance, orientation, and communications to support telemetry, commanding, and downlinking of payload data.
In-Orbit Servicing. We view in-orbit servicing of satellites as a quickly growing business opportunity. As the number of satellites in space increases, so does their need to be serviced. We are designing Momentus’ future reusable vehicles to be capable of performing in-orbit servicing and are pursuing development activities that support this objective. Our aim is to equip future vehicles with robotic arms and the ability to maneuver in close proximity to other spacecraft and dock or berth with them. Once fully developed, we believe these capabilities could allow us to offer a suite of different in-orbit services, such as inspection, refueling, life extension, re-positioning, salvage missions, maintenance and repair, and de-orbiting.
Satellite Bus. We are offering a modified version of the Vigoride OSV for use as a satellite bus for commercial and government customers