Momentus Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022; the filing is an annual report, not a standalone fourth-quarter report. Comparative figures are for FY2021. Momentus is developing orbital service vehicles for satellite transportation and other in-space services. Its audited financial statements received an unqualified opinion from Armanino LLP.
Financial performance and liquidity
| Metric | FY2022 / Dec. 31, 2022 | FY2021 / Dec. 31, 2021 |
|---|---|---|
| Service revenue | $0.299 million | $0.330 million |
| Gross profit | $0.273 million | $0.465 million |
| Research and development | $41.7 million | $51.3 million |
| Selling, general and administrative | $49.8 million | $48.9 million |
| Operating loss | $91.3 million | $99.8 million |
| Net income (loss) | $(95.4) million | $120.7 million |
| Net cash used in operating activities | $87.9 million | $86.7 million |
| Cash and cash equivalents | $61.1 million | $160.0 million |
| Total assets / total liabilities | $92.4 million / $53.8 million | $185.8 million / $53.9 million |
FY2022 gross margin was approximately 91% on very low revenue; the prior-year percentage is not meaningfully comparable because cost of revenue was a $0.135 million reversal. The FY2021 net income included a $209.3 million non-cash gain from the change in fair value of SAFE notes, which converted in the 2021 business combination. The FY2022 net loss included a $4.5 million net litigation-settlement expense.
Cash, cash equivalents and restricted cash fell by $98.1 million during 2022. Investing activities used $0.7 million and financing activities used $9.5 million, primarily for loan principal repayment. Current assets were $76.3 million and current liabilities $43.2 million. The company reported $15.3 million of Term Loan principal outstanding, with scheduled principal maturities of $13.0 million in 2023 and $2.3 million in 2024; the loan bears a stated 12% annual rate. Management said cash on hand was expected to support operations for at least 12 months from the filing date, but additional capital is required for the longer-term plan.
Material changes and business developments
- Revenue declined $31,000 year over year and remained minimal relative to operating costs. FY2022 revenue included launch-related performance and forfeited deposits; FY2021 revenue primarily reflected forfeited customer deposits.
- Operating loss narrowed by $8.5 million, mainly as R&D expense fell by $9.6 million, including the absence of $9.5 million of prior-year prepaid-launch-cost impairments. SG&A rose by $0.9 million.
- FY2022 operating cash use was broadly similar to 2021. Cash and cash equivalents declined by $98.9 million year over year.
- Backlog, described as potential revenue, fell from $86 million in March 2021 to $67 million in January 2022 and $33 million as of February 28, 2023. It includes options and cancellable contracts; approximately 87% related to three launch providers or aggregators and affiliates, and the top ten customers represented approximately 98%.
- Vigoride 3 launched in May 2022 but suffered deployable-solar-array, power and communications anomalies. Momentus reported deploying seven satellites from Vigoride 3 and one using a partner’s deployer, but could not confirm deployment of two other Vigoride 3 payloads. The vehicle could not perform planned orbit-change maneuvers or technology demonstrations.
- Vigoride 5 launched in January 2023. At the filing date, Momentus reported it was in good health, with both solar arrays deployed and power and temperatures within expected ranges; its primary purpose was still testing and commissioning.
Outlook, risks and unusual items
- Management planned two additional Vigoride test and demonstration missions during 2023, subject to regulatory approvals and flight readiness. No numerical revenue or earnings guidance was provided. Reusable vehicles were an objective as early as 2025, requiring significant further development.
- The water-plasma propulsion system remained experimental: the company said it had not experimentally confirmed thrust in space, a prerequisite for orbital maneuvers and commercialization. Service development, reliability, launch timing and customer demand remain uncertain.
- Momentus expects continued operating cash consumption and says longer-term execution requires additional financing. Its $50 million at-the-market facility had no sales through the filing date. A February 2023 registered offering generated approximately $10 million gross; substantially all net proceeds were expected to satisfy a founder stock-repurchase obligation. The offering triggered a $10 million liability under those agreements and included shares and warrants, creating dilution risk.
- A securities class-action settlement was agreed in principle for $8.5 million, subject to court approval; at least $4 million was expected from insurance. The company recorded the $8.5 million contingency and $4 million insurance receivable. Other securities, derivative, contract and indemnification litigation remained pending or disputed.
- The National Security Agreement imposes operating, personnel, contract and technology-access restrictions, compliance costs and potential liquidated damages of up to $1 million per breach. Future missions also depend on government licenses. Momentus surrendered its NOAA license in February 2023 and said future authorizations would be sought case by case.
- The company reported a $7 million SEC civil penalty under a 2021 settlement; the remaining $5 million was paid in July 2022. A recent Delaware court petition sought validation of the charter amendment increasing authorized common shares from 100 million to 250 million; the hearing was scheduled for March 2023.
- Disclosure controls were assessed as effective. The filing did not include management’s internal-control effectiveness assessment or an auditor attestation, citing the public-company transition period. The auditor did not express an opinion on internal control over financial reporting.
Most important facts for investors to verify
- Actual cash burn, funding needs and runway, including the cash impact of the $10 million founder repurchase liability and subsequent financing.
- Vigoride 5 mission results, including whether the propulsion system demonstrates measurable thrust and reliable orbital maneuvers.
- Required FAA, FCC, NOAA and other approvals and whether planned launch schedules can be met.
- Backlog conversion, cancellations, customer concentration and the terms of deposits and options.
- Final court approval and funding of the $8.5 million securities settlement, plus the exposure and status of remaining litigation.
- Outcome of the Delaware authorized-share petition and the dilution effects of outstanding and newly issued warrants and equity awards.