☒ ~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐ ~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

Indicate by check mark whether the ~~registrant~~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 ☐

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 ☐

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,”~~filer” “smaller reporting ~~company,”~~company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ~~Exchange~~ Act). Yes ☒o No ☐

AsThe registrant had outstanding 83,276,728 shares of common stock as of August ~~6, 2021, there were 17,775,338 shares of Class A common stock and 4,312,500 shares of Class B common stock of the registrant issued and outstanding.~~

The accompanying notes are an integral part of ~~the unaudited~~these condensed consolidated financial ~~statements.~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS~~

Note 1. Nature of Operations

~~Stable Road Acquisition Corp. (the “Company”~~

The Company

Momentus Inc. (together with its consolidated subsidiaries “Momentus” or ~~“SRAC”~~the “Company”) is a ~~blank check~~U.S. commercial space company ~~incorporated~~that plans to offer in-space infrastructure services, including in-space transportation, hosted payloads and in-orbit services. Momentus believes it can make new ways of operating in ~~Delaware on~~space possible with its planned in-space transfer and service vehicles that will be powered by an innovative water plasma-based propulsion system that is under development.

On May 28, 2019. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

~~The Company is an early stage and emerging growth company and, as such,~~4, 2022, the Company ~~is subject~~received a favorable determination from the Federal Aviation Administration (the “FAA”) of its application for payload review, which was the final regulatory milestone needed to ~~all~~support the Company’s inaugural flight of the ~~risks associated with early stage~~Vigoride orbital transfer vehicle (Vigoride 3) in May 2022. The FAA favorable determination follows a license from the Federal Communications Commission (the “FCC”) received on April 28, 2022, and ~~emerging growth companies.~~

updates to existing licenses from the National Oceanic and Atmospheric Administration (the “NOAA”).

On May 25, 2022, the Company launched its first demonstration flight of the Vigoride spacecraft (Vigoride 3) to low-earth orbit aboard the SpaceX Transporter-5 mission. In addition to Vigoride, Momentus used a second port on the same SpaceX mission to fly a third-party deployer from a partner company. On May 25, 2022, Momentus used the third-party deployer to place its first customer satellite in orbit.

On May 26, 2022, upon establishing two-way contact between the Vigoride spacecraft in low-earth orbit and a ground station on Earth, Momentus discovered that the Vigoride spacecraft had experienced certain anomalies after its launch, primarily relating to its deployable solar arrays, which provide power to the spacecraft and its subsystems. Since that time, the Company has been working to address the anomalies, identify root causes and deploy customer satellites.

The Company has ~~two subsidiaries, Project Marvel First Merger Sub, Inc.,~~determined that the Vigoride spacecraft's deployable solar arrays, which are produced by a ~~wholly-owned subsidiary~~third party, and are folded and stowed during launch, did not operate as intended once in orbit. This resulted in low power and communications issues with the spacecraft. Meanwhile, the spacecraft's fixed, body-mounted solar panels appear to be working as intended and are providing some power to the spacecraft. The Company has been working closely with the producer of the ~~Company incorporated in Delaware on September 29, 2020 (“First Merger Sub”)~~solar arrays and ~~Project Marvel Second Merger Sub, LLC,~~has identified a ~~wholly-owned subsidiary~~mechanical issue as the root cause of the deployable arrays not operating as intended. The Company ~~incorporated in Delaware on September 29, 2020 (“Second Merger Sub”)~~also believes that it has identified the root cause of the anomalies that it experienced with other spacecraft systems during the low-power state.

On May 28, 2022, Momentus was able to deploy 2 customer satellites from Vigoride (of 9 total customer satellites onboard Vigoride 3). ~~First Merger Sub and Second Merger Sub were formed in connection~~Since that time, the Company has continued efforts to deploy other customer satellites, but did not confirm any subsequent deployments during the second quarter.

While Momentus initially established two-way communications with the ~~proposed business combination~~Vigoride spacecraft, it has not been able to continue such two-way communication given the spacecraft's low-power state. Momentus has been using an unplanned frequency to work through the anomalies and applied for a 30-day Special Temporary Authority (“STA”) from the FCC to properly comply with ~~Momentus Inc., a Delaware corporation (“Momentus”), as more fully discussed below.~~

~~As of~~the FCC’s radio frequency transmission requirements. On June ~~30, 2021,~~9, 2022 the Company ~~had~~received approval of a 30-day STA from the FCC as requested, which the FCC extended for an additional 30 days on July 13.

While Momentus has not ~~commenced any operations. All activity through June 30, 2021 relates~~been able to re-establish two-way communication with the Vigoride spacecraft, it has continued to broadcast commands to the ~~Company’s formation,~~spacecraft from ground stations on Earth, including commands to deploy customer satellites. Additionally, the ~~initial public offering (“Initial Public Offering”), which~~Vigoride spacecraft is ~~described below, identifying~~equipped with a ~~target company for a Business Combination,~~mechanism designed to autonomously deploy customer satellites in the event that the spacecraft loses communications with ground stations.

Subsequent to the end of the second quarter of 2022, the Vigoride spacecraft deployed 4 additional customer satellites including 2 on July 17, 2022 and 2 on July 29, 2022. With the ~~proposed business combination with Momentus, as more fully discussed below. The Company will not generate any operating revenues until after the completion~~Vigoride spacecraft having now deployed 6 of its ~~initial Business Combination, at the earliest. The Company generates non-operating income~~9 customer satellites, Momentus has now deployed a total of 7 customer satellites in ~~the form of interest income~~Low Earth Orbit, comprising 6 satellites from Vigoride 3 and one satellite from the ~~proceeds derived from~~third-party deployer system.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

While Momentus is continuing efforts to address the ~~Initial Public Offering.~~

~~The registration statement for~~anomalies experienced by the Vigoride spacecraft during its inaugural mission (Vigoride 3) and to deploy the 3 remaining customer satellites, the Company’s ~~Initial Public Offering was declared effective on November 7, 2019. On November 13, 2019, the Company consummated the Initial Public Offering~~level of 17,250,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of the over-allotment option to purchase an additional 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000, which is described in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 545,000 units (the “Placement Units”) at a price of $10.00 per Placement Unit in a private placement to SRC-NI Holdings, LLC, a Delaware limited liability company (the “Sponsor”), and Cantor Fitzgerald& Co. (“Cantor”), the underwriter of the Initial Public Offering, generating gross proceeds of $5,450,000, which is described in Note 4.

~~Transaction costs amounted to $10,924,857, consisting of $3,450,000 of underwriting fees, $6,900,000 of deferred underwriting fees and $574,857 of other offering costs.~~

Following the closing of the Initial Public Offering on November 13, 2019, an amount of $172,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Placement Units was placed in a trust account (“Trust Account”) and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment companyconfidence that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Companyit will be able to ~~complete a Business Combination successfully.~~perform some planned operations of the vehicle on this test and demonstration mission has substantially declined. The Company ~~must complete one~~is working to incorporate improvements identified during the current mission in advance of its planned follow-on missions.

The Company anticipates flying its second Vigoride vehicle to low-earth orbit on a third-party launch provider as early as November 2022. All future missions remain subject to the receipt of licenses and government approvals, and successful completion of our efforts to prepare our spacecraft for flight. The Company can offer no assurances that the vehicles that it plans to operate in future missions will be ready on time, or ~~more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions~~that they will operate as intended. Refer to “Risk Factors — We may not receive all required governmental licenses and ~~taxes payable on interest earned~~approvals,” and “Risk Factors — We are dependent on the ~~Trust Account) at the time~~successful development of the agreement to enter into the initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interestour satellite vehicles and related technology,” under Part II, Item 1A: "Risk Factors," in ~~the target sufficient for it not to be required to register as an investment company~~this Form 10-Q and under ~~the Investment Company Act.~~

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

The Company will provide holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i)Part I, Item 1A in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.00 per Public Share, plus any pro rata interest earnedour Annual Report on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations, less up to $100,000 of interest to pay dissolution expenses). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documentsForm 10-K filed with the SEC ~~prior to completing a~~on March 9, 2022.

Background and Business ~~Combination. If, however, stockholder approval of the transaction is required by law, or~~Combination

On August 12, 2021, the Company ~~decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with~~consummated a ~~proxy solicitation~~merger pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its Founder Shares (as defined in Note 5), Placement Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.

If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.

The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares, Placement Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have until August 13, 2021 to complete a Business Combination (the “Combination Period”), including the proposed business combination with Momentus. However, if the Company is unable to complete a Business Combination within the Combination Period, it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares and (along with Cantor) Placement Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriter has agreed to waive its rights to its deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets less taxes payable. This liability will not apply with respect to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) or to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. The Company’s independent registered public accounting firm and the underwriter of the Initial Public Offering will not execute agreements with the Company waiving such claims to the monies held in the Trust Account.

~~Proposed Business Combination with Momentus Inc.~~

~~On October 7, 2020, SRAC entered into an~~ Agreement and Plan of Merger, dated October 7, 2020, and as amended on March 5, 2021, April 6, 2021, and June 29, 2021 ~~(as it may be further amended and/or restated from time to time, the~~(the “Merger Agreement”), by and among ~~SRAC,~~Stable Road Acquisition Corp (“SRAC”), Project Marvel First Merger Sub, Inc., a Delaware corporation and ~~wholly-owned~~a direct, wholly owned subsidiary of SRAC ~~(“First~~(the “First Merger Sub”), and Project Marvel Second Merger Sub, LLC, a Delaware limited liability company and ~~wholly-owned~~a direct, wholly owned subsidiary of SRAC ~~(“Second~~(the “Second Merger Sub”), pursuant to which First Merger Sub merged with and into Momentus Inc., a Delaware corporation (“Legacy Momentus”~~), pursuant to which, among other things: (a) First Merger Sub will merge with and into Momentus (“First Merger”~~), with Legacy Momentus ~~being~~as the surviving corporation of the First Merger Sub, and ~~(b)~~ immediately following ~~the First Merger and as part of the same overall transaction as the First Merger,~~which Legacy Momentus ~~will merge~~merged with and into the Second Merger Sub, ~~(the “Second Merger” and, together~~ with the ~~First Merger, the “Mergers”), with~~ Second Merger Sub ~~being~~as the surviving ~~company of the Second Merger. The Merger Agreement, the Mergers and the other transactions contemplated by the Merger Agreement are referred to herein as the “Proposed Transaction.”~~

Pursuant to the Merger Agreement, the aggregate merger consideration payable to the equityholders of Momentus will be paid in equity consideration equal to $566,600,000, minus Momentus’ indebtedness for borrowed money as ofentity (the “Business Combination”). In connection with the closing of the ~~Mergers~~Business Combination (the “Closing”), ~~plus~~ the ~~amount of Momentus’ cash~~Company changed its name from Stable Road Acquisition Corp. to Momentus Inc., and ~~cash equivalents (excluding restricted cash~~Legacy Momentus changed its name to Momentus Space, LLC.

The Business Combination was accounted for as ~~determined~~a reverse recapitalization under ASC Topic 805, Business Combinations, ("ASC 805") in accordance with ~~GAAP, any cash being held on behalf~~accounting principles generally accepted in the United States (“GAAP”). Under this method of ~~Momentus’ customers~~accounting, SRAC, who was the legal acquirer, is treated as the “acquired” company for financial reporting purposes and ~~any security deposits~~Legacy Momentus is treated as the accounting acquirer. Accordingly, for ~~leases)~~accounting purposes, the Business Combination is treated as the equivalent of a capital transaction in which Legacy Momentus issued stock for the Closing, plus the aggregate exercise price of all outstanding options and warrants (the “Merger Consideration”). The Merger Consideration payable to the stockholders of Momentus will be paid in shares of newly issued Class A common stocknet assets of SRAC, with ~~a deemed value~~no goodwill or other intangible assets recorded, and Legacy Momentus’ financial statements became those of ~~$10~~the Company. Reported shares and earnings per ~~share. In addition, SRAC will pay off, or cause~~share available to ~~be paid off, on behalf~~holders of ~~Momentus~~the Company’s Common Stock, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination. See Note 3 for more information.

Pursuant to the Amended and ~~in connection with~~Restated Certificate of Incorporation of the ~~Closing, Momentus’ outstanding indebtedness for borrowed money.~~

~~In connection with~~Company, at the ~~Proposed Transaction,~~Closing, each share of ~~Momentus’ capital stock (subject to limited exceptions) will be cancelled~~SRAC’s Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”), converted into 1 share of SRAC’s Class A Common Stock. After the Closing and ~~automatically deemed for all purposes to represent~~following the ~~right to receive a portion~~effectiveness of the ~~Merger Consideration in accordance with Momentus’ organizational documents. In addition,~~Second Amended and Restated Certificate of Incorporation of the Merger Consideration that is paid with respect to any shares of Momentus’ capital stock that is subject to any vesting restrictions or other conditions shall continue to be subject to such vesting restrictions and conditions after the Closing.

Each option of Momentus that is outstanding and unexercised immediately prior to the Closing (whether vested or unvested) will be automatically assumed by SRAC and converted into an option to acquire an adjusted number of sharesCompany, each share of Class A ~~common stock at an adjusted exercise price~~Common Stock was automatically reclassified, redesignated and changed into 1 validly issued, fully paid and non-assessable share of the Company’s Common Stock, par value $0.00001 per share ~~and will continue to be governed~~(“Common Stock”), without any further action by ~~substantially~~ the ~~same terms and conditions (including vesting and exercisability terms) as were applicable~~Company or any stockholder thereof.

Prior to the ~~corresponding former option.~~

Business Combination, SRAC’s units, public shares, and public warrants were listed on the Nasdaq under the symbols “SRACU,” “SRAC,” and “SRACW,” respectively. On August 13, 2021, the Company's Common Stock and public warrants began trading on the Nasdaq, under the symbols “MNTS” and “MNTSW,” respectively.

Each warrant to purchase shares of capital stock of Momentus that is outstanding and unexercised immediately prior to the Closing will be automatically converted into a warrant to acquire an adjusted number of shares of Class A common stock at an adjusted exercise price per share and will continue to be governed by substantially the same terms and conditions (including applicable vesting conditions) as were applicable to the corresponding former warrant.

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

Consummation of the Proposed Transaction is subject to customary closing conditions for special purpose acquisition companies, including the following conditions to each party’s obligations, among others: (a) approval by SRAC’s stockholders and Momentus’ stockholders, (b) SRAC having at least $5,000,001 of net tangible assets as of the effective time of the consummation of the Mergers, and (c) the approval of the listing of the shares of Class A common stock to be issued in connection with the Closing on The Nasdaq Stock Market LLC and the effectiveness of a Registration Statement on Form S-4. The Merger Agreement may be terminated under certain customary and limited circumstances prior to the consummation of the Mergers.

On October 7, 2020 and July 15, 2021, ~~the Company~~SRAC entered into ~~Subscription Agreements (as amended from time to time, the “Subscription Agreements”)~~subscription agreements with certain investors (the “PIPE Investors”) ~~pursuant~~ to which ~~the~~such investors ~~have agreed to purchase~~collectively subscribed for an aggregate of 11,000,000 shares of ~~Class A common stock in a private placement for~~the Company’s Common Stock at $10.00 per share for aggregate gross proceeds of $110.0 million (the ~~“Private Placement”~~“PIPE Investment”). The ~~Subscription Agreements~~PIPE Investors were also ~~contemplate that the Company will issue to each PIPE Investor~~granted an equal number of private warrants to purchase ~~one share of~~ the Company’s ~~Class A common stock~~Common Stock at ~~a price of~~ $11.50 per ~~share (subject to adjustment~~share. The warrants were recorded as ~~described in~~a derivative liability under ASC Topic 815, Derivatives and

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Hedging, (“ASC 815”) and the warrant ~~agreement)~~liability was initially valued at $30.5 million. See Note 11 for ~~each share of Class A common stock purchased pursuant to such~~more information. The PIPE ~~Investor’s Subscription Agreement. The proceeds from~~Investment was consummated concurrently with the ~~Private Placement will be used to for general working capital purposes following the closing. The~~ closing of the ~~transactions contemplated by the Subscription Agreements is contingent upon, among other customary closing conditions, the substantially concurrent consummation of the Proposed Transaction.~~

Business Combination.

Concurrently with the execution of the Merger Agreement, an investor of Momentus, the Company and Momentus entered into a repurchase agreement (the “Repurchase Agreement”) pursuant to which, amongst other things, the Company has agreed to repurchase a certain number of shares of Class A common stock from an investor of Momentus, at a purchase price of $10.00 per share, immediately following the Closing (the “Repurchase”). The contemplated Repurchase was terminated pursuant to the June 29, 2021 amendment to the Merger Agreement.

The Company filed a Form 8-K on May 13, 2021 notifying shareholders of the approval to extend the date to consummate a business combination from May 13, 2021 to August 13, 2021. Shareholders redeemed 19,662 shares of common stock purchased in the Company’s initial public offering as part of the extension.

~~Going Concern~~

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until August 13, 2021 or the extension date, as applicable, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date or the extension date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the prescribed date. Management plans to continue its efforts in consummating a business combination by the prescribed date.

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~NOTE~~

Note 2. ~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

Summary of Significant Accounting Policies

~~Principles of Consolidation~~

~~The accompanying condensed~~These consolidated financial statements ~~include~~should be read in conjunction with the ~~accounts of~~audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed by the Company ~~and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.~~

on March 9, 2022.

~~Basis of Presentation~~

Unaudited Interim Financial Information

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with ~~accounting principles generally accepted in~~GAAP and pursuant to the ~~United States of America (“GAAP”) for interim financial information~~rules and ~~in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X~~regulations of the ~~SEC.~~U.S. Securities and Exchange Commission (the “SEC”). Certain information orand footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to ~~the~~such rules and ~~regulations~~regulations. The balance sheet as of December 31, 2021 was derived from the ~~SEC for interim~~Company’s audited financial ~~reporting. Accordingly, they do~~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 ~~information~~authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and ~~footnotes necessary for a complete presentation~~Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (the “FASB”).

The unaudited interim condensed consolidated financial ~~position, results of operations, or cash flows.~~statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements ~~include~~contain all adjustments ~~consisting of a normal recurring nature, which~~that are necessary ~~for a fair presentation of~~to present fairly the Company’s financial position ~~operating results~~as of June 30, 2022 and December 31, 2021, the net (loss) income for the three and six months ended June 30, 2022 and 2021, the stockholders’ equity (deficit) for the three and six months ended June 30, 2022 and 2021, and cash flows for the ~~periods presented.~~

six months ended June 30, 2022 and 2021. Such adjustments are of a normal and recurring nature. The ~~accompanying unaudited~~results for the three and six months ended June 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022, or for any future period. These interim condensed consolidated financial statements should be read in conjunction with the ~~Company’s~~audited financial statements as of and for the years ended December 31, 2021 and 2020, filed with the SEC in our Annual Report on Form ~~10-K/A~~10-K filed by the Company on March 9, 2022.

Basis of Presentation

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, SRAC is treated as the acquired company and Momentus Inc. is treated as the acquirer for financial statement reporting purposes (the “Combined Company”). Momentus Inc. was determined to be the accounting acquirer as Momentus Inc.'s stockholders prior to the Merger had the greatest voting interest in the combined entity, Momentus Inc. comprises all of the ongoing operations, and Momentus Inc.'s senior management directs operations of the combined entity.

Accordingly, for accounting purposes, the financial statements of the Combined Company represent a continuation of the financial statements of Momentus with the acquisition being treated as the equivalent of Momentus issuing stock for the ~~year ended December 31, 2020~~net assets of SRAC, accompanied by a recapitalization. The net assets of SRAC are recorded at historical cost, with no goodwill or other intangible assets recorded.

One-time direct and incremental transaction costs incurred by the Company were recorded based on the activities to which the costs relate and the structure of the transaction; cost allocated to the issuance of equity were recorded as ~~filed~~a reduction of the amount of equity raised, presented in additional paid in capital, while all costs allocated to the liability classified warrants were charged to expense.

In connection with the ~~SEC on June 10, 2021, which contains~~Business Combination, outstanding units of Momentus were converted into Common Stock of the Company, par value $0.00001 per share, representing a recapitalization. Momentus is deemed to be the predecessor of the Company, and the consolidated assets and liabilities and results of operations prior to the date of the Closing (the “Closing Date”) are those of Momentus. The shares and corresponding capital amounts and net (loss) income per share available to common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Merger Agreement.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

Reclassifications

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. None of the reclassifications have changed the total assets, liabilities, stockholders’ equity (deficit), income, expenses or net losses previously reported.

Principles of Consolidation

The consolidated financial statements ~~and notes thereto. The financial information as of December 31, 2020 is derived from~~include the ~~consolidated~~ financial statements ~~presented~~of all the subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the ~~Company’s Annual Report~~financial statements and accompanying notes. Management bases its estimates on ~~Form 10-K/A~~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 ~~year ended December 31, 2020. The interim~~carrying values of assets and liabilities. Accordingly, actual results ~~for~~could differ from those estimates. Significant estimates inherent in the ~~three and six months ended June 30, 2021~~preparation of the financial statements include, but are not ~~necessarily indicative~~limited to, accounting for useful lives of property, machinery and equipment, net, intangible assets, net, accrued liabilities, income taxes including deferred tax assets and liabilities, impairment valuation, stock-based awards, Simple Agreement for Future Equity (“SAFE”) notes and warrant liabilities.

COVID-19 Pandemic

As a result of the COVID-19 pandemic, the U.S. government and various states implemented quarantine requirements and travel restrictions. The extent of the impact of COVID-19 on the Company’s financial statements will depend on future developments, including the duration of the outbreak, resurgences and emergence of variants, all of which are highly uncertain and cannot be predicted. The potential impact of COVID-19 on the Company’s operations is inherently difficult to predict and could adversely impact the Company’s business, financial condition or results ~~to be expected for the year ending December 31, 2021 or for any future interim periods.~~

of operations.

Emerging Growth Company

Status

~~The Company is an “emerging growth company,” as defined in~~ Section ~~2(a)~~102(b)(1) of ~~the Securities Act, as modified by~~ the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

~~Further, Section 102(b)(1) of the JOBS Act~~ exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies ~~(that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act)~~ are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can ~~elect~~choose not to ~~opt out~~take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, ~~but~~and any such election to ~~opt out~~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 ~~not~~ to ~~opt out~~take advantage of ~~such~~the benefits of the extended transition period ~~which means that when a standard is issued~~for new or revised ~~and it has different application dates for public or private companies, the~~financial accounting standards. The Company aswill remain an emerging growth company ~~can~~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 ~~the~~such new or revised ~~standard at~~accounting standards to the ~~time private companies adopt the new or revised standard.~~extent permitted by such standards. This may make ~~comparison of~~it difficult or impossible to compare the Company’s ~~consolidated~~ financial ~~statements~~results with the financial results of another public company ~~which~~that is ~~neither~~either not an emerging growth company ~~nor~~or is an emerging growth company ~~which~~that has ~~opted out~~chosen not to take advantage of ~~using~~ the extended transition period ~~difficult or impossible~~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.

9Tables of Contents

MOMENTUS INC.

~~STABLE ROAD ACQUISITION CORP.~~

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

~~JUNE~~

Restricted Cash

Restricted cash primarily represents deposited cash that is restricted by financial institutions for two purposes. $0.4 million is restricted 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. $0.1 million of this restricted cash is classified as a current asset as it will be returned to the Company one year following the completion of the Business Combination, while the remaining $0.3 million 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 at least one year from June 30, ~~2021~~

2022. $0.9 million is restricted for expenditures related to the National Security Agreement (“NSA”). See Note 12.

Deferred Fulfillment and Prepaid Launch Costs

~~(Unaudited)~~

~~Use~~We prepay for certain launch costs to third party providers that will carry the transport vehicle to orbit. Prepaid costs allocated to the delivery of ~~Estimates~~

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 June 30, 2022, and December 31, 2021, the Company had $4.6 million and $3.0 million, respectively, of deferred fulfillment and prepaid launch costs in the accompanying consolidated balance sheets. On May 21, 2021, the Company received notification from one of its launch service providers that it was terminating 2 launch service agreements for flights scheduled during calendar year 2021 and that they considered the Company to be in default of prior payments totaling $8.7 million. The ~~preparation~~Company believed the prepayments would be non-recoverable as this was the third time the payload was rescheduled. As a result of ~~condensed~~the notification from one of its launch service providers, the Company recorded an impairment charge of $8.7 million of prepaid launch costs during the six months ended June 30, 2021. There was an unrelated impairment of $0.8 million in the six months ended June 30, 2021.

On October 12, 2021, the Company began discussions with the same launch service provider about reestablishing a future launch schedule. As a result of the discussion, the Company signed a Launch Services Agreement on October 19, 2021 that reserved space on a launch that occurred in May 2022. The Company determined that $2.7 million of the impaired deposits were potentially recoverable in connection with the reestablished schedule. The Company did not record any adjustments as a result of the discussions. See Note 4.

On May 4, 2022, the Company received a favorable determination from the Federal Aviation Administration (the “FAA”) of its application for payload review, which was the final regulatory milestone needed to support the Company’s inaugural flight of the Vigoride orbital transfer vehicle (Vigoride 3) in May 2022. The FAA favorable determination follows a license from the Federal Communications Commission (the “FCC”) received on April 28, 2022, and updates to existing licenses from the National Oceanic and Atmospheric Administration (the “NOAA”).

The Company has determined that the Vigoride spacecraft's deployable solar arrays, which are produced by a third party, and are folded and stowed during launch, did not operate as intended once in orbit. This resulted in low power and communications issues with the spacecraft. Meanwhile, the spacecraft's fixed, body-mounted solar panels appear to be working as intended and are providing some power to the spacecraft. The Company has been working closely with the producer of the solar arrays and has identified a mechanical issue as the root cause of the deployable arrays not operating as intended. The Company also believes that it has identified the root cause of the anomalies that it experienced with other spacecraft systems during the low-power state.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

On May 28, 2022, Momentus was able to deploy 2 customer satellites from Vigoride (of 9 total customer satellites onboard Vigoride 3). Since that time, the Company has continued efforts to deploy other customer satellites, but did not confirm any subsequent deployments during the second quarter.

While Momentus initially established two-way communications with the Vigoride spacecraft, it has not been able to continue such two-way communication given the spacecraft's low-power state. Momentus has been using an unplanned frequency to work through the anomalies and applied for a 30-day Special Temporary Authority (“STA”) from the FCC to properly comply with the FCC’s radio frequency transmission requirements. On June 9, 2022 the Company received approval of a 30-day STA from the FCC as requested, which the FCC extended for an additional 30 days on July 13.

While Momentus has not been able to re-establish two-way communication with the Vigoride spacecraft, it has continued to broadcast commands to the spacecraft from ground stations on Earth, including commands to deploy customer satellites. Additionally, the Vigoride spacecraft is equipped with a mechanism designed to autonomously deploy customer satellites in the event that the spacecraft loses communications with ground stations.

Subsequent to the end of the second quarter of 2022, the Vigoride spacecraft deployed 4 additional customer satellites including 2 on July 17, 2022 and 2 on July 29, 2022. With the Vigoride spacecraft having now deployed 6 of its 9 customer satellites, Momentus has now deployed a total of 7 customer satellites in Low Earth Orbit, comprising 6 satellites from Vigoride 3 and one satellite from the third-party deployer system.

While Momentus is continuing efforts to address the anomalies experienced by the Vigoride spacecraft during its inaugural mission (Vigoride 3) and to deploy the 3 remaining customer satellites, the Company’s level of confidence that it will be able to perform some planned operations of the vehicle on this test and demonstration mission has substantially declined. The Company is working to incorporate improvements identified during the current mission in advance of its planned follow-on missions.

In connection with the launch of the Company’s first Vigoride (Vigoride 3) and the third party deployer in May 2022, the Company amortized $1.2 million of prepaid launch costs. These costs were allocated proportionally based on payload weight. $12 thousand allocated to completed customer payload performance obligations was amortized to cost of revenue, $14 thousand allocated to customer payload subject to unresolved variable consideration was deferred within current deferred fulfillment costs, $0.6 million allocated to the Vigoride vehicle was amortized to research and development costs, and $0.6 million allocated to the third party deployer, intended as a demonstration of Company’s business model, was amortized to selling, general and administrative costs. As a result of the launch, the Company realized $1.8 million of benefit from the recovery of previously impaired prepaid launch costs.

Property, Machinery and Equipment, net

Property 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:


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

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

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 consist of patents and cloud computing implementation costs (in accordance with ASU 2018-15) 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, and 3 years for cloud computing implementation costs, which is the estimated useful lives of the intangible assets.

Deferred Offering Costs

Offering costs consist of legal, accounting, underwriting fees and other costs incurred that were directly related to the Business Combination. Upon completion of the Business Combination, all deferred offering costs were netted with proceeds from the Business Combination, with costs relating to the issuance of equity recorded as a reduction of additional paid in capital, while all costs related to the liability classified warrants were charged to expense. See Note 3 for more information.

Loss Contingencies

We estimate loss contingencies in accordance with ASC 450-20, Loss Contingencies, which states that a loss contingency shall be accrued by a charge to income if both of the following conditions are met: (a) information available before the consolidated financial statements ~~in conformity with GAAP requires management~~are issued or are available to ~~make estimates and assumptions~~be issued indicates that ~~affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities~~it is probable that a liability had been incurred at the date of the consolidated financial statements and (b) the ~~reported amounts~~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 toNote 12.

Revenue Recognition

The Company enters into contracts for ‘last-mile’ satellite and cargo delivery, payload hosting and in-orbit servicing options with customers that are primarily in the aerospace industry. The Company recognizes revenue (along with any other fees that have been paid) upon the earlier of the satisfaction of the Company’s performance obligation or when the customer cancels the contract.

In connection with the May 25, 2022 flight of the Vigoride spacecraft and the third-party deployer from a partner company, the Company completed one of the intended performance obligations, resulting in $50 thousand of recognized revenue, which was previously recorded in contract liabilities. The remaining customer payloads were negatively impacted by the Vigoride anomalies and as a result did not receive the anticipated level of service. As a result, the Company offered concessions to these customers, the value of which was unresolved as of June 30, 2022. Due to this unresolved variable consideration, the Company recorded the related customer deposits of $133 thousand as deferred revenues ~~and expenses~~within current contract liabilities.

For the year ended December 31, 2021, the Company recognized revenue related to customer cancelled contracts of $0.3 million, which were previously recorded as a contract liability. The Company also recorded $(135) thousand as a reduction of cost of revenue which represents the reversal of a contingency recorded during the ~~reporting period.~~

~~Making estimates requires management~~prior year for loss contracts, partially offset by costs incurred related to ~~exercise significant judgment. It is at least reasonably possible~~one of the cancelled contracts. During the year ended December 31, 2021, in conjunction with the isolated refunds described below, the Company signed amendments with those customers considered in the contingency, such that the ~~estimate~~services will no longer be free of charge.

As of June 30, 2022, and December 31, 2021, the Company had collected $1.7 million and $1.6 million, respectively, in customer deposits 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 consolidated balance sheets. Included in the collected amount as of June 30, 2022 are $1.2 million of non-current deposits.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

case basis as necessary to preserve and foster future business relationships and customer goodwill. As a result of the ~~effect~~Company’s inability to complete any launches in 2021 (refer to Note 4 for additional information), the Company issued customer refunds of $1.4 million during the year ended December 31, 2021.

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 ~~condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change~~basis for considering such assumptions and for inputs used in the ~~near term~~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 ~~one or more future events. One~~the short-term maturities of ~~the more significant accounting estimates included in~~ these ~~financial statements is the determination~~instruments which fall with Level 1 of the fair value hierarchy. The carrying value of ~~the warrant liability. Such estimates may be subject to change as more current information becomes available~~certain other non-current assets and ~~accordingly the actual results could differ significantly from those estimates.~~

~~Class A Common Stock Subject to Possible Redemption~~

liabilities approximates fair value. The Company ~~accounts~~had no Level 2 inputs for ~~its common stock subject to possible redemption in accordance with~~ the ~~guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument~~six months and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock held by Public Stockholders features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, atfiscal year ended June 30, ~~2021~~2022 and December 31, ~~2020, there~~2021.

The Company’s SAFE note liabilities, prior to conversion, were 11,395,368 and 11,126,916 shares of Class A common stock subject to possible redemption, respectively, presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets.

~~Offering Costs~~

Offering costs consisted of legal, accounting and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrantmarked-to-market liabilities were expensed as incurred in the statements of operations. Offering costs associated with the Class A common stock issued were charged to stockholders’ equity upon the completion of the Initial Public Offering.

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~Warrant Liabilities~~

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 480 and are classified within Level 3 of the fair value hierarchy as the Company is using a backsolve method within the Black Scholes Option Pricing model, which allowed the Company to solve for the implied value of the business based on the terms of the SAFE investments. Significant unobservable inputs included volatility and expected term. Volatility is based upon 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 SAFE investments. The expected term was based on the anticipated time until the SAFE investments would have a conversion event. Upon conversion, the SAFE notes were valued based on the closing price of Company’s Common Stock on the Closing Date.

The Company’s warrants are recorded as a derivative liability 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. Significant unobservable inputs include stock price, volatility and expected term. 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 to the remaining expected life of the warrants. The expected term was based on the maturity of the warrant, 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 performance awards under the equity incentive plans are recorded as contingent liabilities pursuant to ASC 480, measured at fair value. The performance awards are classified within Level 3 of the hierarchy as the fair value is dependent on management assumptions about the likelihood of non-market outcomes (see Note 11).

The Company’s share repurchase agreement with the Co-Founders is recorded as contingent liabilities pursuant to ASC 480, measured at fair value. The share repurchase agreement is classified within Level 3 of the hierarchy as the fair value is dependent on management assumptions about the likelihood of non-market outcomes (see Note 11). There were no transfers between levels of input during the three and six months ended June 30, 2022 and 2021.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

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 11. 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 a components of other income (expense), net within the consolidated statements of operations. The Company will continue to adjust the warrant liabilities for changes in fair value until the earlier of a) the exercise or expiration of the warrants or b) the redemption of the warrants, at which time the warrants will be reclassified to additional paid-in capital.

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.

SAFE Notes

The Company issued SAFE notes to investors during the three months ended March 31, 2021 and the years ended December 31, 2020 and 2019, which were converted to shares of Common Stock in connection with the Business Combination. Prior to conversion, the Company determined that the SAFE notes were not a legal form of debt (i.e., no creditors’ rights). The SAFE notes included a provision allowing for the investors to receive a portion of the proceeds upon a change of control equal to the greater of their investment amount or the amount payable based upon a number of shares of Common Stock equal to the investment amount divided by the liquidity price, the occurrence of which is outside the control of the Company. This provision required that the SAFE notes be classified as marked-to-market liabilities pursuant to ASC 480. See Note 9.

Basic and Diluted (Loss) Income Per Share

Net (loss) income per share is provided in accordance with FASB ASC ~~Topic 815, “Derivatives~~260-10, “Earnings per Share”. Basic net (loss) income per share is computed by dividing losses by the weighted average number of common shares outstanding during the period. Diluted (loss) income per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares and ~~Hedging”~~SAFE notes if their effect is anti-dilutive. See Note 11.

Impairment of Long-lived Assets

The Company evaluates the carrying value of long-lived 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 six months ended June 30, 2022 and 2021 there were immaterial impairments of long-lived assets. See Note 5 and Note 6.

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 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 (“~~ASC 815”~~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 ~~warrants~~forfeitures as ~~either equity-classified~~they occur.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

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 six months ended June 30, 2022 and 2021.

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).

Once the Company has achieved technological feasibility, the Company will capitalize the costs to construct any additional components of the vehicle systems.

Nonrefundable advance payments for goods or ~~liability-classified instruments~~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 leases real estate facilities under non-cancelable operating leases with various expiration dates through February 2028. The Company determines if an arrangement contains a lease at inception based on whether there is an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480,identified property, plant or equipment and whether the ~~warrants meet all~~Company controls the use of the ~~requirements~~identified asset throughout the period of use.

The Company adopted the ASU No. 2016-02, Leases (Topic 842) on January 1, 2020. The Company elected the package of practical expedients for ~~equity~~transition under which the Company did not reassess its prior conclusions about lease identification, lease classification and initial direct costs. Additionally, the Company elected the hindsight practical expedient for transition under ~~ASC 815, including whether~~which conclusions around lease term and impairment will not be reassessed.

Operating leases are included in the ~~warrants~~accompanying 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 ~~indexed~~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 ~~Company’s own common shares and whether~~total lease payments over the ~~warrant holders could potentially require “net cash settlement” in a circumstance outside~~term of the lease). Because the Company’s ~~control, among other conditions~~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 ~~equity classification. This assessment,~~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 months or less of all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term.

Income Taxes

The Company accounts for income taxes in accordance with authoritative guidance, which requires the use of ~~professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.~~

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in-capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company accounts for the warrants issued in connection with its Initial Public Offering in accordance with the guidance contained in ASC 815-40-15-7D, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statements of operations. The fair value of the public warrants initially was estimated using a Post-Acquisition Simulation, with subsequent measurements utilizing the public trading price. The fair value of the private warrants was initially and subsequently measured using the Black-Scholes Model (see Note 8).

~~Income Taxes~~

~~The Company follows~~ the asset and liability method. Under this method, ~~of accounting for~~deferred income ~~taxes under ASC Topic 740, “Income Taxes.” Deferred~~ tax assets and liabilities are ~~recognized for~~determined based upon the ~~estimated future tax consequences attributable to differences~~difference between the financial ~~statements~~statement carrying amounts and the tax basis of ~~existing~~ assets and liabilities and ~~their respective tax bases. Deferred tax assets and liabilities~~ are

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

measured using the enacted tax ~~rates~~rate expected to apply to taxable income in the years in which ~~those temporary~~the differences are expected to be ~~recovered or settled. The effect on~~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 ~~and liabilities of~~that can be realized, the Company will adjust its valuation allowance with a ~~change in tax rates is recognized in~~corresponding impact to the provision for income taxes in the period ~~that included~~in which such determination is made.

The Company is required to evaluate the ~~enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.~~

~~ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of~~ 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 ~~expected~~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 1 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.

Recently Adopted Accounting Standards

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was within the scope of those models before the adoption of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company adopted this standard on

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (cont.)

January 1, 2022. There was no impact to the Company's condensed consolidated financial statements on the date of adoption.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which simplified the accounting for income taxes by removing certain exceptions to the general principles in income taxes. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted this standard on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s financial statements.

Note 3. Reverse Recapitalization

As discussed in Note 1, "Nature of Operations," on the Closing Date, SRAC completed the acquisition of Momentus Inc. and acquired 100% of Momentus Inc.’s shares and Momentus Inc. received gross proceeds of $247.3 million, which included $110.0 million in proceeds from the PIPE Investment, and $137.3 million in proceeds from issuance of Common Stock upon the closing of the Business Combination.

Proceeds from the issuance of Common Stock comprised of $172.5 million of public investment in SRAC, reduced by redemptions of $35.6 million. SRAC had additional stockholder deficit of $8.5 million, inclusive of $0.4 million of additional cash in trust from operations, which reduced the total proceeds to $238.8 million.

The Merger was accounted for as a reverse recapitalization under ASC 805, with Momentus Inc. as the accounting acquirer and SRAC as the acquired company for accounting purposes. Momentus Inc. was determined to be ~~taken~~the accounting acquirer as Momentus Inc.'s stockholders prior to the Merger had the greatest voting interest in the combined entity, Momentus Inc. comprises all of the ongoing operations, and Momentus Inc.'s senior management directs operations of the combined entity. Accordingly, all historical financial information presented in these unaudited condensed consolidated financial statements represents the accounts of Momentus Inc. and its wholly owned subsidiary. Net assets were stated at historical cost consistent with the treatment of the transaction as a ~~tax return. For those benefits~~reverse recapitalization of Momentus Inc.

One-time direct and incremental transaction costs incurred by the Company were recorded based on the activities to which the costs relate and the structure of the transaction. Costs of $27.8 million allocated to the issuance of equity were recorded as a reduction of equity raised, presented in additional paid in capital, while costs of $4.8 million allocated to the liability classified warrants were charged to expense. On the Closing Date, each holder of Momentus Inc. preferred and common stock received approximately 0.2467416 shares of the Company’s Common Stock, par value $0.00001 per share. SeeNote 11 for additional details of the Company's stockholders' equity (deficit) prior to and subsequent to the Merger.

All equity awards of Momentus Inc. were assumed by the Company and converted into comparable equity awards that are settled or exercisable for shares of the Company’s Common Stock. As a result, each outstanding stock option was converted into an option to purchase shares of the Company’s Common Stock based on an exchange ratio of 0.2467416, and each outstanding restricted stock award was converted into restricted stock awards of the Company that, upon vesting, may be settled for shares of the Company’s Common Stock based on an exchange ratio of 0.2467416.

Outstanding private warrants of Momentus Inc. common stock were also converted into warrants to purchase shares of the Company’s Common Stock based on an exchange ratio of 0.2467416.

Each public and private warrant of SRAC that was unexercised at the time of the Merger was assumed by the Company and represents the right to purchase 1 share of the Company’s Common Stock upon exercise of such warrant. See Note 11 for more information.

Lock-up Agreements

In conjunction with the Closing, certain insider stockholders executed lock-up agreements, pursuant to which such stockholders agree not to transfer any shares of Common Stock for a period of six months after the Closing or, if earlier, the first date the closing price of the Common Stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period following the Closing.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PIPE Investment

On October 7, 2020 and July 15, 2021, SRAC entered into subscription agreements with the PIPE Investors to which such investors collectively subscribed for an aggregate of 11,000,000 shares of the Company’s Common Stock at $10.00 per share for aggregate gross proceeds of $110.0 million. The PIPE Investors were also granted an equal number of private warrants to purchase the Company’s Common Stock at $11.50 per share. The warrants were recorded as a derivative liability under ASC 815, and the warrant liability was initially valued at $30.5 million. See Note 11. The PIPE Investment was consummated concurrently with the closing of the Business Combination..

Note 4. Prepaids and Other Current Assets

Prepaids and other current assets consisted of the following:


(in thousands)	June 30, 2022		December 31, 2021
Prepaid launch costs, current	$	1,064	$	—
Prepaid research and development	3,813		4,870
Prepaid insurance and other assets	2,640		4,562
Total	$	7,517	$	9,431

As of June 30, 2022 and December 31, 2021, the non-current portion of prepaid launch costs recorded in other non-current assets was $3.6 million and $3.0 million, respectively.

FAA Application

On May 10, 2021, the Company received a letter from the FAA denying the Company’s application for a payload review for the then-planned June 2021 launch. According to the letter, during an interagency consultation, the FAA was informed that the launch of the Company’s payload posed national security concerns associated with the Company’s then-current corporate structure. The letter further stated that the FAA understood that the Company was undergoing a process that might resolve the national security concerns, and that the FAA could reconsider a payload application when that process was completed.

As a result of the FAA application denial, on May 21, 2021, the Company received notification from one of its launch service providers that it was terminating 2 launch service agreements for flights scheduled during calendar year 2021 and that they considered the Company to be ~~recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.~~in default of prior payments totaling $8.7 million. The Company ~~recognizes accrued interest~~believed the prepayments were non-recoverable as this was the third time the payload was rescheduled. As a result of the notification from one of its launch service providers, the Company recorded an impairment charge of $8.7 million of prepaid launch costs during the six months ended June 30, 2021. There was an unrelated impairment of $0.8 million for the three and ~~penalties~~six months ended June 30, 2021.

On October 12, 2021, the Company began discussions with the same launch service provider about reestablishing a future launch schedule. As a result of such discussion, the Company signed a Launch Services Agreement on October 19, 2021 that reserved space on a launch that occurred in May 2022. The Company determined that $2.7 million of the impaired deposits were potentially recoverable in connection with the reestablished schedule. The Company did not record any adjustments as a result of the discussions.

All future missions remain subject to the receipt of licenses and government approvals, and successful completion of current efforts to get the system ready for flight. Refer to “Risk Factors — We may not receive all required governmental licenses and approvals,” and “Risk Factors — We are dependent on the successful development of

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

our satellite vehicles and related technology,” 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 9, 2022.

Note 5. Property, Machinery and Equipment, net

Property, machinery and equipment, net consisted of the following:


(in thousands)	June 30, 2022		December 31, 2021
Computer equipment	$	178	$	178
Furniture and fixtures	55		206
Leasehold improvements	2,693		2,693
Machinery and equipment	3,455		3,332
Construction in-progress	372		247
Property, machinery and equipment, gross	6,753		6,656
Less: accumulated depreciation	(2,239)		(1,827)
Property, machinery and equipment, net	$	4,514	$	4,829

Depreciation expense related to ~~unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits~~property, machinery and ~~no amounts accrued~~equipment was $0.2 million and $0.5 million for ~~interest~~the three and ~~penalties~~six months ended June 30, 2022, respectively, and $0.2 million and $0.4 million for the three and six months ended June 30, 2021, respectively. The Company had immaterial disposals of furniture and machinery during the three and six months ended June 30, 2022.

Note 6. Intangible Assets, net

Intangible assets, net consisted of the following as of June 30, ~~2021 and~~2022:


(in thousands)	Gross Value		Accumulated Amortization		Net Value		Weighted average remaining amortization period (in years)
Patents/Intellectual Property	$	450	$	(110)	$	340	7.2
Capitalized cloud implementation costs	450		(70)		380		2.6
Total	$	900	$	(180)	$	720

Intangible assets, net consisted of the following as of December 31, ~~2020.~~2021:

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(in thousands)	Gross Value		Accumulated Amortization		Net Value		Weighted average remaining amortization period (in years)
Patents/Intellectual Property	$	404	$	(91)	$	313	7.5
Capitalized cloud implementation costs	43		(7)		36		2.6
Total	$	447	$	(98)	$	349

Amortization expense related to intangible assets was $44 thousand and $82 thousand for the three and six months ended June 30, 2022, respectively, and $12 thousand and $22 thousand for the three and six months ended June 30, 2021, respectively.

As of June 30, 2022, the future estimated amortization expense related to intangible assets is as follows:


(in thousands)
Remainder of 2022	$	99
2023	199
2024	190
2025	75
2026	49
Thereafter	108
Total	720

There were no intangible asset impairments during both the three and six months ended June 30, 2022, and 2021.

Note 7. Leases

The Company leases office space under non-cancellable operating leases with terms expiring from November 2022 through February 2028. The leases require monthly lease payments that are subject to annual increase throughout the lease term.

InJanuary 2021, the Company commenced a lease at a new location in San Jose, California. The lease expires in February 2028. The Company is ~~currently not aware~~obligated to pay approximately $11 million over the term of ~~any issues under review that could result in significant payments, accruals or material deviation from its position.~~the lease. Prior to December 31, 2021, the Company modified 2 minor leases to extend access until April 2022 to aid the full transition to the San Jose facility. The Company ~~is subject to income tax examinations by major taxing authorities since inception.~~

has 1 additional minor lease expiring in November 2022.

~~Net Income (Loss) per Common Share~~

The components of operating lease expense were as follows:


(in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost	$	404	$	435	$	844	$	871
Variable lease expense	142		148		292		295
Short-term lease expense	—		3		—		6
Total lease expense	$	546	$	586	$	1,136	$	1,172

~~Net income (loss) per common~~

Variable lease expense consists of the Company’s proportionate share ~~is computed by dividing net income (loss) by~~of operating expenses, property taxes, and insurance.

As of June 30, 2022, the ~~weighted average number~~weighted-average remaining lease term was 5.6 years and the weighted-average discount rate was 5.6%.

Tables of ~~shares of common stock outstanding for the period.~~

Contents

MOMENTUS INC.

~~STABLE ROAD ACQUISITION CORP.~~

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 7. Leases (cont.)

As of June 30, 2022, the maturities of the Company’s operating lease liabilities were as follows:


(in thousands)
Remainder of 2022	$	778
2023	1,533
2024	1,580
2025	1,627
2026	1,674
Thereafter	2,026
Total lease payments	9,218
Less: Imputed interest	(1,370)
Present value of lease liabilities	$	7,848

~~JUNE~~

Note 8. Accrued Expenses

Accrued expenses consisted of the following:


(in thousands)	June 30, 2022		December 31, 2021
Legal and other professional services	$	3,541	$	4,121
Compensation expense	1,722		3,862
Research and development projects	1,242		1,240

Other current expense	363		399
Payroll tax expense	163		163
Total	$	7,031	$	9,785

Note 9. SAFE Notes

The Company issued SAFE notes to investors. During the six months ended June 30, 2021,

the Company issued SAFE notes to investors in exchange for aggregate proceeds of $30.9 million. On August 12, 2021, as a result of the Business Combination, all of the Company’s outstanding SAFE notes, representing principal of $78 million and a fair value of $136 million on the conversion date, converted into 12,403,469 shares of Common Stock of the Combined Company.

~~(Unaudited)~~

Prior to conversion, the Company determined that the SAFE notes were not a legal form of debt (i.e., no creditors’ rights). The ~~Company’s condensed consolidated statements~~SAFE notes included a provision allowing for cash redemption upon the occurrence of ~~operations include~~ a ~~presentation~~change of control, the occurrence of which was outside the control of the Company. The provision required the SAFE notes be classified as marked-to-market liabilities pursuant to ASC 480. The income (loss) reported from the decrease (increase) in the estimated fair value of the SAFE notes was $100.8 million and $182.4 million for the three and six months ended June 30, 2021, respectively. These amounts are included in other income (expense).

Note 10. 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 beginning 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.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Loan Payable (cont.)

In conjunction with the Term Loan, warrants to purchase preferred stock up to 1% of the fully diluted capitalization (including allowance for conversion of all outstanding convertible notes, SAFE notes and such warrants) of the Company were granted to the lender exercisable at the lender’s option. 80% of the 1% of the warrants were earned by the lender upon execution of the agreement. The additional 20% of the warrants was forfeited as of June 30, 2021. The warrant’s original estimated fair value of $15.6 million was recorded as a derivative liability under ASC 815 with the offset recorded as a debt discount. On August 12, 2021 the lender exercised the warrant. See Note 11. Additionally, the Company incurred debt issuance costs of $0.1 million, which were recorded as a direct deduction from the carrying amount of the Term Loan.

The Company allocated the proceeds from the Term Loan agreement to the note and warrants 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 $0.7 million and $1.5 million for the three and six months ended June 30, 2022, respectively, and $2.6 million and $3.4 million for the three and six months ended June 30, 2021, respectively.

As of June 30, 2022, the Company’s total loan payable consisted of gross Term Loan payable of $21.2 million and accrued interest of $0.1 million, offset by unamortized debt discount and issuance costs of $2.6 million. The Term Loan principal has future scheduled maturities for the remainder of 2022 of $5.9 million, as well as $13.0 million and $2.3 million for 2023 and 2024, respectively.

Promissory Notes

On June 29, 2021, the Company and SRAC amended the Merger Agreement which, among other things, provided for the issuance by the Company of 2 second lien notes (the “Promissory Notes”). The Promissory Notes, in the amount of $1.5 million each, were held by the Company’s outside counsel and SRAC, and were for certain legal fees and expenses incurred by SRAC and the Company in relation to the Merger Agreement. As a result of the Business Combination, the amount due to SRAC became an intercompany transaction which was eliminated from the combined entity’s consolidated balance sheets. During the year ended December 31, 2021, the Company signed an agreement with its outside counsel and made a payment which settled the Promissory Notes as well as all outstanding payables. The agreement resulted in a reduction of $2.6 million in the amount due for expenses incurred during the year, which was recorded as a reduction to legal expenses.

Note 11. Stockholders’ Equity (Deficit) and Stock-based Compensation

Common Stock and Preferred Stock

Pursuant to the terms of the Second Amended and Restated Certificate of Incorporation, the Company is authorized and has available a total of 270,000,000 shares of stock, consisting of (i) 250,000,000 shares of Common Stock, par value $0.00001 per share, and (ii) 20,000,000 shares of preferred stock, par value $0.00001 per share (“Preferred Stock”).

At the Closing of the Business Combination, the Company had 79,772,262 shares of Common Stock outstanding and no shares of Preferred Stock outstanding. The following summarizes the Company’s Common Stock outstanding immediately after the Business Combination:

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Stockholders’ Equity and Stock-based Compensation (cont.)


	Shares	%
Momentus Space, LLC unit holders	50,419,505	63	%
Public stockholders	13,695,257	17	%
SRAC and its affiliates	4,657,500	6	%
PIPE Investors	11,000,000	14	%
Total	79,772,262	100	%

Co-Founder Divestment and Share Repurchase

In accordance with the NSA and pursuant to certain 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”) sold 100% of their respective equity interests in the Company on June 30, 2021. In exchange for ~~common~~their equity interests, the Company initially paid each entity $1, but will additionally pay up to an aggregate of $50,000,000, out of funds legally available therefor, to the Co-Founders, on a pro rata basis, as follows: (i) an aggregate of $40,000,000 to be paid out of funds legally available therefor, within 10 business days after the earlier of (A) a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $100,000,000 and (B) the Business Combination (the “First Payment Date”); and (ii) an aggregate of $10,000,000 to be paid out of funds legally available therefor, within 10 business days after a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $250,000,000 (determined without any reduction for the $100,000,000 previously received in respect of the First Payment Date).

As a result of the Business Combination, which generated $247.3 million of gross proceeds (as described in Note 3), the Company paid the Co-Founders $40.0 million in addition to the initial consideration paid of $3. The Company recorded the consideration paid as a reduction of Common Stock and additional paid in capital. Pursuant to the NSA, a portion of those divestment proceeds were placed in escrow accounts, and may not be released to the divested investors until after completion of audit by a third party auditor of the investors compliance with the NSA and the lapse of a 15 day period without an objection from the CFIUS Monitoring Agencies. Following the third party audit of the investors’ NSA compliance, all of the escrowed divestment proceeds were released to the Co-Founders as of March 1, 2022 in accordance with the NSA.

If the Company were to undertake a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of approximately $2.7 million or more, the Company would need to pay an aggregate of $10.0 million to the Co-Founders.

The Company evaluated and periodically re-evaluates this potential consideration as a liability under ASC 480 utilizing a probability-weighted approach. Certain factors which would enable successful fundraising were considered, including progress toward compliance with the NSA, research and development progress, and agreements with launch providers, resulting in an estimated liability of $5.8 million expected to be paid to the Co-Founders with a corresponding offset to additional paid in capital, as of June 30, 2022.

Stock Purchase Warrants

In February 2021, the Company entered into the Term Loan. In conjunction with the Term Loan, warrants up to 1% of the fully diluted capitalization (including allowance for conversion of all outstanding convertible notes, SAFE notes and such warrants) of the Company were granted to the lender exercisable at the lender’s option. 80% of the 1% of the warrants were earned by the lender upon execution of the agreement. The remaining 20% of the warrants were forfeited on June 30, 2021. The warrant’s original estimated fair value of $15.6 million was recorded as a derivative liability under ASC 815 with the offset recorded as a debt discount. The Company recorded the decrease in the estimated fair value of the warrant of $(4.1) million and $(11.1) million for three and six months ended June 30, 2021, respectively, within other income (expense) in the accompanying consolidated income statements. The warrants were exercised by the lender immediately prior to the Business Combination. The loan remains outstanding as of June 30, 2022.

In March 2020, the Company entered into an equipment financing agreement to fund the acquisition of specific and eligible equipment (the “Equipment Loan”). In conjunction with the Equipment Loan, the Company issued stock

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Stockholders’ Equity and Stock-based Compensation (cont.)

purchase warrants to the lender, which allowed for the purchase of 191,108 shares ~~subject to possible redemption~~of Common Stock in a ~~manner similar to~~subsequent round of financing. These warrants were also accounted for as a derivative liability and the two-class method of income (loss) per share. Net income per share, basic and diluted, for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and B non-redeemable common stock is calculated by dividing the net loss, adjusted for the net income attributable to Class A redeemable common stock, by the weighted average number of Class A and B non-redeemable common stock outstanding for the period. Class A and B non-redeemable common stock includes the Founder Shares as these shares do not have any redemption features and do not participatedecrease in the ~~income earned on~~estimated fair value of the ~~Trust Account.~~

~~The following table reflects the calculation~~warrant of ~~basic~~$(0.4) million and ~~diluted net income per common share (in dollars, except per share amounts):~~

Three Months Ended
June 30,

Six Months Ended
June 30,

2021 2020 2021 2020
Redeemable Class A Common Stock
Numerator: Net Income allocable to Redeemable Class A Common Stock
Interest Income $ 4,311 $ 355,824 $ 23,357 $ 1,025,613
Less: Income and Franchise Tax available to be withdrawn from the Trust Account (4,311 ) (355,824 ) (23,357 ) (1,025,613 )
Redeemable Net Income $ — $ — $ — $ —
Denominator: Weighted Average Redeemable Class A Common Stock
Redeemable Class A Common Stock, Basic and Diluted 17,240,709 17,250,000 17,245,329 17,250,000
Net Income/Basic and Diluted Redeemable Class A Common Stock $ 0.00 $ 0.02 $ 0.00 $ 0.04

Non-Redeemable Class A and B Common Stock
Numerator: Net Income minus Net Income - Basic
Net Income $ (2,884,835 ) $ 1,222,072 $ 2,881,651 $ 2,431,243
Less: Redeemable Net Income - Basic — — — —
Non-Redeemable Net Loss $ (2,884,835 ) $ 1,222,072 $ 2,881,651 $ 2,431,243
Denominator: Weighted Average Non-Redeemable Class A and B Common Stock
Non-Redeemable Class A and B Common Stock, Basic 4,857,500 4,857,500 4,857,500 4,857,500
Net income, Basic Non-Redeemable Class A and B Common Stock $ (0.59 ) $ 0.19 $ 0.59 $ 0.35

Non-Redeemable Class A and B Common Stock
Numerator: Net Income minus Net Earnings - Diluted
Non-Redeemable Net Income - Basic $ (2,884,835 ) $ 1,222,072 $ 2,881,651 $ 2,431,243
Less: Change in Fair Value of Derivative Liability (1,904,150 ) (1,185,700 ) (10,623,913 ) (2,135,400 )
Non-Redeemable Net Loss - Diluted $ (4,788,985 ) $ 36,372 $ (7,742,262 ) $ 295,843
Denominator: Weighted Average Non-Redeemable Class A and B Common Stock
Non-Redeemable Class A and B Common Stock, Diluted 5,005,558 4,857,500 7,105,104 4,857,500
Net loss, Diluted Non-Redeemable Class A and B Common Stock $ (0.96 ) $ 0.19 $ (1.09 ) $ 0.35

~~Diluted weighted average shares outstanding was calculated using the treasury stock method utilizing a weighted average share price of $11.69 and $15.39~~$(1.5) million for the three and six months ended June 30, 2021, respectively, ~~and the effect of the warrants sold in the Initial Public Offering and the private placement to purchase an aggregate of 8,897,500 shares.~~

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~Concentration of Credit Risk~~

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

~~Fair Value of Financial Instruments~~

~~The fair value of the Company’s assets and liabilities which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximate the carrying amounts represented~~was recorded within other income (expense) in the accompanying ~~condensed balance sheets, primarily due to their short-term nature.~~

~~Recent Accounting Pronouncements~~

~~In August 2020,~~consolidated income statements. The warrants were exercised by the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt --debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.

The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed consolidated financial statements.

~~NOTE 3. INITIAL PUBLIC OFFERING~~

~~Pursuant~~lender immediately prior to the ~~Initial~~ Business Combination.

Public ~~Offering,~~and Private Warrants

As of June 30, 2022, the Company ~~sold 17,250,000 Units, which includes the full exercise by the underwriter of its option~~had public and private warrants outstanding to purchase ~~an additional 2,250,000 Units at $10.00 per Unit. Each Unit consists~~8,625,000 and 11,272,500 of ~~one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles~~Common Stock, respectively, related to the Business Combination. The warrants entitle the registered holder to purchase ~~one share of Class A common~~ stock at a price of $11.50 per share, subject to adjustment, ~~(see Note 7).~~

~~NOTE 4. PRIVATE PLACEMENT~~

~~Simultaneously with~~at any time commencing on August 12, 2021. The public and private warrants expire on the ~~closing~~fifth anniversary of the Initial Public Offering, the Sponsor and Cantor purchased an aggregate of 545,000 Placement Units at a price of $10.00 per Placement Unit, for an aggregate purchase price of $5,450,000. Each Placement Unit consists of one share of Class A common stock (“Placement Share”) and one-half of one redeemable warrant (“Placement Warrant”). Each whole Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the Placement Units were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Placement Units and all underlying securities will be worthless.

~~NOTE 5. RELATED PARTY TRANSACTIONS~~

~~Founder Shares~~

In June 2019, the Sponsor purchased 4,312,500 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. The Founder Shares will automatically convert into shares of Class A common stock at the time of a Business Combination, or earlier atupon redemption or liquidation.

Additionally, the ~~option~~Company had private warrants outstanding to purchase 308,569 shares of Common Stock, with an exercise price of $0.20 per share, unrelated to the Business Combination, which were exercised on a net basis for 278,146 shares during the six months ended June 30, 2022.

The private warrants assumed in connection with the Business Combination were accounted for as a derivative liability and the decrease in estimated fair value of the ~~holders, on a one-for-one basis, subject to certain adjustments,~~warrants of $(2.3) million and $(1.8) million for the three and six months ended June 30, 2022, respectively, was recorded within other expense. The public warrants and the legacy outstanding private warrants were recorded as ~~described in Note 7.~~

equity.

Contingent Sponsor Earnout Shares

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

The Founder Shares included up to 562,500 shares subject to forfeiture to the extent that the underwriter’s over-allotment option was not exercised in full or in part, so that the Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering and excluding Placement Shares included in the Placement Units). As a result of the ~~underwriter’s election to fully exercise its over-allotment option, the 562,500 Founder Shares are no longer subject to forfeiture.~~

~~The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a~~ Business Combination, ~~or (B) subsequent to a Business Combination, (x)~~the Company modified the terms of 1,437,500 shares of Common Stock held by SRAC’s sponsor (the “Sponsor Earnout Shares”), such that all such shares will be forfeited if the ~~last~~share price of Common Stock does not reach a volume-weighted average closing sale price of $12.50, two thirds of such shares will be forfeited if the ~~Class A common stock equals or exceeds $12.00 per~~ share ~~(as adjusted for stock splits, stock dividends, reorganizations, recapitalizations~~price of Common Stock does not reach a volume-weighted average closing sale price of $15.00, and one third of such shares will be forfeited if the ~~like) for any 20 trading days within any 30-trading day period commencing at least 150 days after~~share price of Common Stock does not reach a ~~Business Combination, or (y)~~volume-weighted average closing sale price of $17.50, in each case, prior to the ~~date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all~~fifth anniversary of the ~~Company’s stockholders having~~Business Combination. Certain events which change the ~~right to exchange their~~number of outstanding shares of ~~common stock for cash, securities~~Common Stock, such as a split, combination, or recapitalization, among other ~~property.~~

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.

~~On July 13, 2021,~~The Sponsor Earnout Shares are recorded within equity. Due to the contingently forfeitable nature of the shares, the Sponsor ~~agreed~~Earnout Shares are excluded from basic EPS calculations, but are considered potentially dilutive shares of the purposes of diluted EPS (refer to ~~relinquish 250,000 Founder Shares pursuant~~“Income (Loss) Per Share” below).

Stock Incentive Plans

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 ~~a settlement with the SEC (see Note 9, Subsequent Events).~~

~~Related Party Loans~~

~~On June 28, 2019, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to~~employees, directors, and consultants. The Initial Plan was terminated in November 2018. Awards outstanding under the Initial ~~Public Offering pursuant~~Plan continue to ~~a promissory note (the “Promissory Note”). The Promissory Note was non-interest bearing and payable on~~be governed by the ~~earlier of December 31, 2019 or the completion~~terms of the Initial ~~Public Offering. Borrowings~~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 ~~Promissory Note of $222,725 were repaid upon~~plan continue to be governed by the ~~consummation~~terms of the ~~Initial Public Offering on November 13, 2019. The funds~~2018 Plan. Forfeitures from the ~~Promissory~~ 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 5,982,922 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

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note ~~are no longer~~11. Stockholders’ Equity and Stock-based Compensation (cont.)

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 ~~Company.~~

~~Promissory Notes~~

~~On February 12,~~lessor 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 six months ended June 30, 2022, the shares available for grant under the 2021 Plan increased by 2,436,353 and 255,017 due to the ~~Sponsor~~evergreen provision and ~~an unrelated party each provided $300,000 in non-interest-bearing promissory notes for an aggregate balance of $600,000 that is payable at~~forfeitures from the ~~consummation of a business combination. On June 25, 2021,~~Initial Plan and the Sponsor and an unrelated party each provided an additional $21,500 in non-interest-bearing promissory notes for an aggregate balance of $43,000 that is payable at the consummation of a business combination.2018 Plan, respectively. As of June 30, ~~2021, the full balance of $643,500 of the notes remains unpaid. Borrowings~~2022, there were 1,363,167 shares remaining available for grant. Grant activity under the ~~Promissory Notes are no longer available.~~

2021 Plan is described below.

2021 Employee Stock Purchase Plan

In ~~addition, in order to finance transaction costs in~~ connection with ~~a Business Combination,~~ the ~~Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan~~Closing, the Company ~~funds as may be required (“Working Capital Loans”). If~~adopted the ~~Company completes~~Employee Stock Purchase Plan (the “2021 ESPP Plan”), under which 1,595,445 shares of Common Stock were initially reserved for issuance. The Plan provides a ~~Business Combination, the Company would repay the Working Capital Loans out~~means by which eligible employees of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may ~~use~~be given an opportunity to purchase shares of Common Stock at a ~~portion~~discount as permitted under the Internal Revenue Code of ~~proceeds held outside~~1986, as amended. The 2021 ESPP Plan has an evergreen provision which allows for shares available for issuance under the ~~Trust Account~~plan to ~~repay~~be increased on the ~~Working Capital Loans but no proceeds held~~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 ~~Trust Account would be used~~lessor of (i) half a percent (0.5%) of the outstanding shares on the last day of the calendar month prior to ~~repay~~ the ~~Working Capital Loans. Except for the foregoing, the terms~~date of such ~~Working Capital Loans, if any, have not been determined~~automatic increase and ~~no written agreements exist with respect to such loans.~~(ii) 1,595,445 shares. The ~~Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at~~2021 ESPP Plan became effective immediately following the ~~lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into units upon consummation of~~Closing. During the ~~Business Combination at a price of $10.00 per unit. The units would be identical~~six months ended June 30, 2022, the shares available for issuance under the 2021 ESPP Plan increased by 406,059 due to the ~~Placement Units. There~~evergreen provision. During the six months ended June 30, 2022, 77,162 shares were ~~no outstanding borrowings~~issued under the ~~Working Capital Loans~~2021 ESPP Plan. The Company has an outstanding liability pertaining to the ESPP of $0.1 million as of June 30, ~~2021.~~

~~Administrative Support Agreement~~

~~The Company entered into an agreement whereby, commencing on November 8, 2019 through~~2022, included in accrued expenses, for employee contributions to the ~~earlier~~2021 ESPP Plan, pending issuance at the end of the ~~Company’s consummation of a Business Combination or its liquidation,~~offering period.

2022 Inducement Equity Plan

In February 2022, the Company ~~will pay an affiliate~~adopted the 2022 Inducement Equity Plan (the “2022 Plan”), under which 4,000,000 shares of Common Stock were initially reserved for issuance. The 2022 Plan allows for the ~~Sponsor~~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 ~~total~~four-year period. As of ~~$10,000 per month~~June 30, 2022 only RSU grants have been made under the 2022 Plan and there were 2,276,253 shares remaining available for ~~office space, utilities~~grant. 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 ~~administrative support. In January~~the 2021 ~~the Sponsor forgave the accrued administrative fees accrued at December 31, 2020 of $30,000 and agreed to not collect any fees~~Plans, for the six months ended June 30, ~~2021.~~ 2022:


(in thousands, except share-based data)	Total Options	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	4,043,492	$	0.27

Granted	1,064,862	2.54
Vested exercised	(1,468,551)	0.27
Forfeitures	(255,017)	0.27
Outstanding as of June 30, 2022	3,384,786	$	0.98	7.3	$	4,398
Exercisable as of June 30, 2022	1,641,510	$	0.38	5.8	$	2,956
Vested and expected to vest as of June 30, 2022	3,384,786	$	0.98	7.3	$	4,398

As ~~such,~~of June 30, 2022, there was a total of $1.8 million in unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of 2.1 years.

The total intrinsic value of options exercised during the three and six months ended June 30, 2022, was $3.7 million and $4.1 million, respectively, and during the three and six months ended June 30, 2021 was $0.5 million and $5.3 million, respectively.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Stockholders’ Equity and Stock-based Compensation (cont.)

The assumptions used under the Black-Scholes-Merton Option Pricing model and weighted average fair value of options on the grant date are as follows:


	Six Months Ended June 30,
	2022	2021
Expected term (in years)	5.8	N/A
Risk-free interest rate	2.35%	N/A
Expected volatility	61.90%	N/A
Dividend yield	0.00%	N/A
Fair value on grant date	$1.46	N/A

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 six months ended June 30, 2022. RSAs were an immaterial portion of activity for the period:


	Shares	Weighted Average Grant Date Fair Value (i.e. share price)
Outstanding as of December 31, 2021	2,812,110	$	10.87
Granted	5,825,877	2.65
Vested	(276,520)	9.82
Forfeited	(928,933)	8.01
Outstanding as of June 30, 2022	7,432,534	$	4.80

As of June 30, 2022, there was a total of $31.1 million in unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.7 years. Outstanding unvested and expected to vest RSUs had an intrinsic value of $16.1 million.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Stockholders’ Equity and Stock-based Compensation (cont.)

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 June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Research and development expenses	$	514	$	66	$	887	$	134
Selling, general and administrative expenses	2,521		2,278		4,360		7,978
Total	$	3,035	$	2,344	$	5,247	$	8,112

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 June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Options	$	174	$	2,344	$	251	$	8,112
RSUs & RSAs	2,909		—		4,984		—
ESPP	22		—		82		—
Performance Awards	$	(70)	$	—	(70)		—
Total	$	3,035	$	2,344	$	5,247	$	8,112

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. Successful completion of performance awards was determined to be not probable as of June 30, 2022, therefore no ~~administrative fees~~shares correspond to outstanding performance awards if they were settled on June 30, 2022.

Stock Option Modifications

On August 31, 2021, in connection with the resignation of one of the Company’s former officers, the Company modified the former officer’s outstanding awards, which resulted in the vesting of options for 273,571 shares. The modified option awards have an exercise price of $0.28 per share, expected term of 6.25 years, a risk-free rate of 0.86%, expected volatility of 97% and no expected dividends. This Type III modification resulted in a remeasured fair value of $10.91 per share. The incremental compensation related to the accelerated options totaled $2.9 million.

On May 22, 2021, in connection with the resignation of one of the Company’s former directors, the Company modified the former director’s outstanding award, which resulted in the vesting of options for 205,618 shares. The modified option award has an exercise price of $0.28 per share, expected term of one year, a risk-free rate of 0.04%, expected volatility of 65% and no expected dividends. This Type III modification resulted in a remeasured fair value of $10.78 per share. The incremental compensation related to the accelerated options totaled $2.2 million.

On January 25, 2021, in connection with the resignation of the Company’s former Chief Executive Officer (“CEO”), Mikhail Kokorich, the Company modified his outstanding awards, which resulted in the vesting of options for 261,070 shares. The modified option awards have exercise prices ranging from $0.04 to $0.28 per share, an expected term of one year, a risk-free interest rate of 0.10%, an expected volatility of 78% and no expected dividends. This Type III modification resulted in a remeasured fair values ranging from $20.67 to $20.91 per share. The incremental compensation related to the accelerated options totaled $5.4 million.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Stockholders’ Equity and Stock-based Compensation (cont.)

Income (Loss) Per Share

The following table sets forth the computation of diluted net (loss) income per share:


Diluted Net (Loss) Income Per Share	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except share-based data)	2022		2021		2022		2021
Numerator:
Net (loss) income	$	(22,872)	$	64,327	$	(49,706)	$	128,998
Less:
Decrease in fair value of SAFE notes	—		(100,803)		—		(182,367)
Decrease in fair value of warrants	—		(4,448)		—		(12,529)
Net loss allocated to common stockholders for diluted net loss per share	$	(22,872)	$	(40,924)	$	(49,706)	$	(65,898)
Denominator:
Denominator for basic net loss per share - weighted average shares outstanding	81,319,533		51,474,305		80,642,670		54,620,299

Dilutive options and unvested stock units outstanding	—		5,091,392		—		5,135,631
Dilutive warrants outstanding	—		620,531		—		625,000
Dilutive SAFE notes outstanding (shares not reserved)	—		12,466,995		—		12,466,995
Denominator for diluted net loss per share - adjusted weighted average shares outstanding	81,319,533		69,653,223		80,642,670		72,847,925

Net (loss) income per share - basic	$	(0.28)	$	1.25	$	(0.62)	$	2.36
Net loss per share - diluted	$	(0.28)	$	(0.59)	$	(0.62)	$	(0.90)

Net (loss) income per share is provided in accordance with ASC 260-10, Earnings Per Share. Basic earnings per share is computed by dividing net (loss) income 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 six months ended June 30, 2022, the inclusion of certain options, unvested stock units, warrants, and contingent Sponsor Earnout Shares in ~~2021.~~

the calculation of diluted earnings per share would be anti-dilutive, and, accordingly, were excluded from the diluted loss per share calculation. As the Company had net income for the three and six months ended June 30, 2021, there were no exclusions from the diluted income per share calculation.

The following table summarizes potential common shares that were excluded as their effect is anti-dilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021

Options and unvested stock units outstanding	6,109,403	N/A	6,000,378	N/A
Warrant outstanding	19,897,500	N/A	20,023,655	N/A

Contingent Sponsor Earnout Shares	1,437,500	N/A	1,437,500	N/A
Total	27,444,403	N/A	27,461,533	N/A

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~NOTE 6. COMMITMENTS AND CONTINGENCIES~~

Note 12. Commitments and Contingencies

~~Risks and Uncertainties~~

Purchase Obligations

On July 13, 2021, the SEC announced charges against the Company, which resulted in a settlement with the SEC for $1 million. This amount was accrued for within the Company’s accompanying condensed consolidated balance sheet (see Note 10).

Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~Registration Rights~~

~~Pursuant to a registration rights agreement entered~~Momentus enters into on November 7, 2019, the holders of the Founder Shares, Placement Units (including securities contained therein) and units (including securities contained therein) that may be issued upon conversion of Working Capital Loans, and any shares of Class A common stock issuable upon the exercise of the Placement Warrants and any shares of Class A common stock and warrants (and underlying Class A common stock) that may be issued upon conversion of the units issued as part of the Working Capital Loans and Class A common stock issuable upon conversion of the Founder Shares, are entitled to registration rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. Notwithstanding the foregoing, Cantor may not exercise its demand and “piggyback” registration rights after five (5) and seven (7) years after the effective date of the registration statement and may not exercise its demand rights on more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

~~Underwriting Agreement~~

~~The underwriter was paid a cash underwriting discount of $3,450,000, or $0.20 per Unit of the gross proceeds from the Units sold~~purchase obligations in the ~~Initial Public Offering. In addition, the underwriter is entitled~~normal course of business. These obligations include purchase orders and agreements to ~~a deferred fee of $0.40 per Unit of the gross proceeds from the Units sold in the Initial Public Offering,~~purchase goods or ~~$6,900,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event~~services that ~~the Company completes a Business Combination, subject to the~~are enforceable, legally binding, and have significant terms ~~of the underwriting agreement.~~

~~NOTE 7. STOCKHOLDERS' EQUITY~~

~~Preferred Stock~~ ~~— The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting~~ and ~~other rights and preferences as may be determined from time to time by the Company’s board of directors.~~minimum purchases stipulated. As of June 30, 2022, the Company’s future unconditional purchase obligations are as follows:


(in thousands)
2022	$	10,444
2023	11,900
2024	600


Thereafter	—
Total	$	22,944

Legal Proceedings

Securities Class Actions

On July 15, 2021, ~~and December 31, 2020, there were no shares~~a purported stockholder of ~~preferred stock issued or outstanding.~~

~~Common Stock~~

~~Class A Common Stock~~ ~~— The Company is authorized to issue 100,000,000 shares of Class A common stock with~~SRAC filed a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. As of June 30, 2021 and December 31, 2020, there were 6,379,970 and 6,668,084 shares of Class A common stock issued or outstanding, excluding 11,395,368 and 11,126,916 shares of common stock subject to possible redemption, respectively.

~~Class B Common Stock~~ — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. As of June 30, 2021 and December 31, 2020, there were 4,312,500 shares of Class B common stock issued and outstanding.

~~Holders of Class A common stock and Class B common stock will vote together as a single~~putative class ~~on all matters submitted to a vote of stockholders except as required by law.~~

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering (not including the shares of Class A common stock underlying the Placement Units) plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement-equivalent warrants issued, or to be issued, to any seller in a Business Combination, any private placement equivalent securities issued to the Sponsor or its affiliates upon conversion of loans made to the Company).

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~NOTE 8. WARRANT LIABILITIES~~

At June 30, 2021 and December 31, 2020, there were 8,625,000 Public Warrants and 272,500 Private Placement Warrants outstanding to purchase an aggregate of 12,066,667 shares of Class A common stock which are contingent upon the occurrence of future events as discussed below. Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisableaction complaint against SRAC, SRC-NI Holdings, LLC ("Sponsor"), Brian Kabot (SRAC CEO), James Norris (SRAC CFO), Momentus, and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60^th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.

Notwithstanding the foregoing, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.

~~Once the warrants become exercisable, the Company may redeem the Public Warrants:~~

	●	~~in whole and not in part;~~

	●	~~at a price of $0.01 per warrant;~~

	●	~~upon not less than 30 days’ prior written notice of redemption; and~~

	●	if, and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.

If and when the warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), and (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the shares of Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

The Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Placement Warrants and the Class A common stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

~~NOTE 9. FAIR VALUE MEASUREMENTS~~

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

	~~Level 1:~~	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

	~~Level 2:~~	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

	~~Level 3:~~	~~Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.~~

The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts.

At June 30, 2021, assets held in the Trust Account were comprised of $1,258 in cash and $172,748,233 in a Treasury Preferred Fund that invests in U.S. Treasury securities. During the three and six months ended June 30, 2021, the Company withdrew $184,489 of interest income from the Trust Account to pay for franchise taxes.

At December 31, 2020, assets held in the Trust Account were comprised of $636 in cash and $173,107,113 in U.S. Treasury securities. During the three and six months ended June 30, 2020, the Company withdrew $824,873 of interest income from the Trust Account to pay for franchise taxes.

~~The gross holding gains and fair value of held-to-maturity securities at December 31, 2020 are as follows:~~

Held-To-Maturity Amortized
Cost Gross
Holding
Gains Fair Value
December 31, 2020 U.S. Treasury Securities $ 173,107,113 $ 1,887 $ 173,109,000

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis at June 30, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Quoted Prices in Active
Markets
Description Level
June 30,
2021

Assets:
Marketable securities held in Trust Account – U.S. Treasury Securities Money Market Fund 1 $ 172,748,233

Level June 30,
2021 December 31,
2020
Liabilities:
Warrant Liability – Public Warrants 1 36,225,000 45,625,388
Warrant Liability – Private Placement Warrants 3 1,228,975 2,452,500

The Company established the initial fair value for the Warrants on November 13, 2019, the date of the Company’s Initial Public Offering, using a Black-Scholes Model for private warrants and a Post-Acquisition Simulation for public warrants. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of common stock and one-third of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of common shares, first to the Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to common shares subject to possible redemption, and common shares based on their relative fair values at the initial measurement date.

~~The key inputs into the Black-Scholes model for the Private Placement Warrants were as follows at June 30, 2021:~~

Input June 30,
2021 December 31,
2020
Risk-free interest rate 0.89 % 1.73 %
Holding period (years) 5.12 5.25
Volatility 25.00 % 25.00 %
Exercise price $ 11.50 $ 11.50
Underlying value $ 13.97 $ 9.50

On June 30, 2021, the Private Placement Warrants and Public Warrants were determined to be $4.51 and $4.20, respectively per warrant for aggregate values of $1.2 million and $36.2 million, respectively.

~~The table below presents the change in fair value of Private Placement Warrants measured using Level 3 inputs for the six months ended June 30, 2021:~~

Private
Placement
Fair value as of December 31, 2020 $ 2,452,500
Change in valuation inputs or other assumptions (1,223,525 )
Fair value as of June 30, 2021 $ 1,228,975

Level 3 financial liabilities consist of the Private Placement Warrant liability for which there is no current market such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

~~STABLE ROAD ACQUISITION CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~NOTE 10. SUBSEQUENT EVENTS~~

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, other than described below, the Company did not identify subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.

~~SEC Settlement~~

~~On July 13, 2021, the SEC announced charges against the Company, Momentus, and Momentus’s founder~~Company's co-founder and former CEO, Mikhail Kokorich, for misleading claims about Momentus’s technology and about the U.S. government’s national security concerns about Mr. Kokorich. The SEC’s settled order finds that Momentus and Mr. Kokorich knowingly or recklessly made misrepresentations of material fact and misleading omissions in violation of antifraud provisions of U.S. federal securities laws, and that the Company negligently made misrepresentations of material fact and misleading omissions in violation of antifraud provisions of U.S. federal securities laws, as well as related reporting and proxy solicitation provisions. The SEC also announced charges against the Sponsor and Brian Kabot, finding that Mr. Kabot negligently violated provisions of U.S. federal securities laws related to proxy solicitations and that Mr. Kabot and the Sponsor caused the Company’s violation of negligence-based antifraud provisions of the federal securities laws.

Without admitting or denying the SEC’s findings, Momentus, the Company, Mr. Kabot, and the Sponsor consented to an order requiring them to cease and desist from future violations. Momentus will pay a civil penalty of $7.0 million, the Company will pay a civil penalty of $1.0 million, and Mr. Kabot will pay a civil penalty of $40,000. Momentus and the Company have also agreed to provide PIPE investors with the right to terminate their Subscription Agreements prior to the stockholder vote to approve the Proposed Transaction; the Sponsor has agreed to relinquish 250,000 founders’ shares it would otherwise have received upon consummation of the Proposed Transaction; and Momentus has agreed to undertakings requiring enhancements to its disclosure controls, including the creation of an independent board committee and retention of an internal compliance consultant for a period of two years.

~~The $1.0 million civil penalty is included in accounts payable and accrued expenses within the accompanying condensed consolidated balance sheets as of June 30, 2021.~~

~~Stockholder Litigation and Demands~~

~~On December 3, 2020, a complaint was filed by a purported stockholder of the Company against the Company and its board of directors~~ in the United States District Court for the ~~Southern~~Central District of ~~New York,~~California, in a case captioned ~~Wallace~~Jensen v. Stable Road Acquisition ~~Corp.~~Corp., et ~~al.~~al., No. ~~1:20-cv-10193.~~2:21-cv-05744 (the "Jensen class action"). The complaint alleges that the ~~Company’s Registration Statement, as filed on November 2, 2020,~~defendants omitted certain material information in their public statements and disclosures regarding the ~~Company’s planned transaction with Momentus,~~Business Combination, in violation of the securities ~~laws. As relief, the complaint~~laws, and seeks an injunction barring the Company from proceeding with a stockholder vote or consummating the transaction absent additional disclosures, as well as unspecified costs and damages. A second complaint was filed by another purported stockholderdamages on behalf of ~~the Company against the Company and its board of directors in the Supreme Court of the State of New York for the County of New York, in a case captioned~~ ~~Ciccotelli v. Stable Road Acquisition Corp., et al.~~, No. 656895/2020, on December 9, 2020, raising similar allegations and seeking similar relief. In addition to the two complaints, the Company received three letters, dated November 9, 2020, November 19, 2020, and August 3, 2021, respectively, from purported stockholders raising similar allegations.

~~On July 15, 2021, a purported stockholder of the Company filed~~ a putative class of stockholders who purchased SRAC stock between October 7, 2020 and July 13, 2021.

On July 22, 2021 and August 4, 2021, purported stockholders of SRAC filed putative class action ~~complaint~~complaints against ~~the Company, the Sponsor,~~SRAC, SRC-NI Holdings, LLC, Brian Kabot, James Norris, Momentus, and Mikhail Kokorich in the United States District Court for the Central District of California, in ~~a case~~cases captioned ~~Jensen~~Hall v. Stable Road Acquisition ~~Corp.~~Corp., et ~~al.~~al., No. 2:~~21-cv-05744.~~21-cv-05943 (the "Hall class action") and Depoy v. Stable Road Acquisition Corp., et al., No. 2:21-cv-06287 (the "Depoy class action"). The ~~complaint~~allegations in the Hall and Depoy class actions are substantially the same as the allegations in the Jensen class action (collectively, referred to as the "Securities Class Actions") and the purported class period is identical. On October 20, 2021, the Securities Class Actions were consolidated in the first filed matter. Other, similar suits may follow.

On November 12, 2021, Lead Plaintiff Hartmut Haenisch filed an Amended Consolidated Class Action Complaint (the “Amended Complaint”) against SRAC, Sponsor, Brian Kabot, Juan Manuel Quiroga, James Norris, James Hofmockel (the "Stable Road Defendants"), Momentus, Dawn Harms, Fred Kennedy (the "Momentus Defendants"), and Mikhail Kokorich. Ms. Harms and Mr. Kennedy, and others, were added as defendants in the Amended Complaint. The Amended Complaint alleges that the defendants made certain material misrepresentations, and omitted certain material information, in their public statements and disclosures regarding the ~~Proposed Transaction,~~Business Combination, in violation of the securities laws, and seeks damages on behalf of a putative class of stockholders who purchased ~~the Company’s~~SRAC stock between October 7, 2020 and July 13, 2021.

On February 14, 2022, the Momentus Defendants filed their motions to dismiss and the Stable Road Defendants filed their motion to dismiss the Amended Complaint. Mr. Kokorich has not been served, nor appeared, in the litigation. On July 13, 2022, the Court issued its ruling on the motions to dismiss, granting the Stable Road Defendants' motion as to Count 1 as against Defendants Quiroga, Norris and Hofmockel, granting the motion, granting the Momentus Defendants' motions as to Count III as against Defendants Harms and Kennedy, and denying the motions on all other counts. The remaining Defendants are required to answer all remaining counts on or before August 2, 2022, and a case management conference has been scheduled for August 22, 2022. Momentus disputes the allegations in the Amended Complaint and intends to vigorously defend the litigation.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Commitments and Contingencies (cont.)

These securities class actions and other such 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.

SEC Settlement and CFIUS Review

On January 24, 2021, the Company received a subpoena from the Division of Enforcement of the U.S. Securities and Exchange Commission ("Division of Enforcement") requesting documents regarding the Registration Statement on Form S-4 and Amendment No. 1 thereto (the "Registration Statement") filed by SRAC in connection with the Business Combination. The Company entered into a settlement with the SEC on July 8, 2021. As a result of the settlement, in accordance with ASC Topic 450, Contingencies, (“ASC 450”) the Company paid a fine of $2 million and recorded a liability of $5 million within other current liabilities, due one year from the settlement date. The Company paid the remaining $5 million liability on July 8, 2022.

In February 2021, the Company and Mr. Kokorich, with support from SRAC, 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, 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 a National Security Agreement (the "NSA").

In accordance with the NSA and pursuant to certain 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”) sold 100% of their respective equity interests in the Company on June 30, 2021. In exchange for their equity interests, the Company initially paid each entity $1, but will additionally pay up to an aggregate of $50,000,000, out of funds legally available therefor, to the Co-Founders, on a pro rata basis, as follows: (i) an aggregate of $40,000,000 to be paid out of funds legally available therefor, within 10 business days after the earlier of (A) a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $100,000,000 and (B) the Business Combination (the “First Payment Date”); and (ii) an aggregate of $10,000,000 to be paid out of funds legally available therefor, within 10 business days after a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $250,000,000 (determined without any reduction for the $100,000,000 previously received in respect of the First Payment Date).

As a result of the Business Combination, which generated $247.3 million of gross proceeds (as described in Note 3), the Company paid the Co-Founders $40.0 million in addition to the initial consideration paid of $3. The Company recorded the consideration paid as a reduction of common stock and additional paid in capital. Pursuant to the NSA, a portion of those divestment proceeds were placed in escrow accounts, and may not be released to the divested investors until after completion of audit by a third party auditor of the investors compliance with the NSA and the lapse of a 15 day period without an objection from the CFIUS Monitoring Agencies. Following the third party audit of the investors’ NSA compliance, all of the escrowed divestment proceeds were released to the Co-Founders as of March 1, 2022 in accordance with the NSA.

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Commitments and Contingencies (cont.)

agreements with launch providers, resulting in an estimated liability of $5.8 million expected to be paid to the Co-Founders with a corresponding offset to additional paid in capital, as of June 30, 2022.

The NSA establishes various requirements and restrictions on the Company to protect 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 $0.5 million and $1.3 millionduring the three and six months ended June 30, 2022, respectively, and $3.5 million and $7.4 million during the three and six months ended June 30, 2021, respectively, and expects to continue to incur legal expenses in the future.

Shareholder Section 220 Litigation

On June 16, 2022, Plaintiff and Momentus shareholder James Burk filed a verified complaint against Momentus in the Delaware Court of Chancery, Case. No. 2022-0519, to inspect the books and records of Momentus pursuant to Section 220 of the Delaware General Corporation Law. Plaintiff seeks production of books and records relating to the management of Momentus and its disclosures to potential investors in connection with the August 2021 de-SPAC merger of the Company. The matter is currently stayed pending the Company's production of certain documents to satisfy Plaintiff's requests for inspection. Plaintiff has demanded an order compelling the Company to comply with Plaintiff's production demands and granting Plaintiff an award of attorney's fees in connection with its prosecution of the matter. The Company from time to time responds to books and records requests properly submitted pursuant to applicable Delaware law. Momentus disputes the allegations and intends to vigorously defend the litigation.

Shareholder Derivative Litigation

On June 20, 2022, a shareholder derivative action was filed by Brian Lindsey, on behalf of Momentus, in the US District Court for the Central District of California, Case No. 2:22-cv-04212, against Momentus (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 and intend to file a motion to dismiss the derivative action. Momentus disputes the allegations and intends to vigorously defend the litigation.

SAFE Note Litigation

On July 20, 2022, The Larian Living Trust ("TLLT") filed an action against Momentus 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 2 investment contracts pursuant to which TLLT alleges it invested $4 million in Momentus. TLLT alleges that a "liquidity event" occurred when Momentus closed the de-SPAC merger in August of 2021, such that it was entitled to the greater of its $4 million investment or its “Conversion Amount” of Momentus shares, which was a total of 724,995 shares of Momentus stock. TLLT further alleges that Momentus 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. Momentus disputes the allegations and intends to vigorously defend the litigation.

Other Litigation and Related Matters

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

Tables of Contents

MOMENTUS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Commitments and Contingencies (cont.)

Company because of judgment, defense and settlement costs, diversion of management resources and other factors. 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, Contingencies. Legal fees are expensed as incurred.

Note 13. Income Taxes

The Company’s effective tax rate for the three and six months ended June 30, 2022 and 2021 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 and a full valuation allowance for deferred tax assets.

Tables of Contents

ITEM 2. MOMENTUS’ 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”). This discussion and analysis should also be read together with our financial information for the period ended and as of June 30, 2022. 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 9, 2022, 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 plans to offer transportation and infrastructure services to help enable the commercialization of space. Satellite operators are our principal customers and target customers. Services that we plan to provide include “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 Transfer Vehicles (“OTVs”) 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. We have signed contracts for approximately $55 million in backlog (potential revenue), as of July 31, 2022. These agreements contain firm orders as well as options, allowing customers to opt-in to launches on shorter notice without requiring a separate agreement. The breadth of these signed contracts spans across 22 companies in 16 countries. 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. Refer to “Risk Factors —We may not be able to convert our orders in backlog into revenue,” 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 9, 2022.

Table of Contents

On May 28, 2022, Momentus was able to deploy two customer satellites from Vigoride (of nine total customer satellites onboard Vigoride 3). Since that time, the Company has continued efforts to deploy other customer satellites, but did not confirm any subsequent deployments during the second quarter.

Subsequent to the end of the second quarter of 2022, the Vigoride spacecraft deployed four additional customer satellites including two on July 17, 2022 and two on July 29, 2022. With the Vigoride spacecraft having now deployed six of its nine customer satellites, Momentus has now deployed a total of seven customer satellites in Low Earth Orbit, comprising six satellites from Vigoride 3 and one satellite from the third-party deployer system.

While Momentus is continuing efforts to address the anomalies experienced by the Vigoride spacecraft during its inaugural mission (Vigoride 3) and to deploy the three remaining customer satellites, the Company’s level of confidence that it will be able to perform some planned operations of the vehicle on this test and demonstration mission has substantially declined. The Company is working to incorporate improvements identified during the current mission in advance of its planned follow-on missions.

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. This 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 there could be 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 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,

Table of Contents

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.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue to advance the development of our vehicles, build corporate infrastructure and enhance our sales and marketing functions.

The technology underlying our anticipated service offerings is still in the process of being developed, and has not been fully tested or validated in space. Our ability to execute on our business plan is dependent on the successful development and commercialization of the technologies described in this Form 10-Q. Although we believe our water plasma propulsion technology will be a key differentiator of our product offerings, we have to date only conducted one test of this technology in space. Although we believe our test unit generated plasma in space and validated the theoretical basis of our technology, we have yet to experimentally confirm the unit’s ability to generate thrust in space, which is crucial to our ability to conduct actual spacecraft maneuvers in orbit. Until we can accomplish this, the technology will remain in the experimental stages. Moreover, even if the unit generates thrust, 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. Our statements and beliefs about the viability of our technology are primarily based on theoretical analyses and experimentally observed results during ground testing and our single test of this technology in space. 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 Quarterly Report on 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. Refer to “Risk Factors — A key component of our business model is the delivery of satellites using our vehicles from low-earth orbit to other orbits. The technology for this maneuver is still in the development stage...” 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 9, 2022.

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 designing 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 OTVs. 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 are designing 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, after delivering our customer payloads to their final orbits, our vehicles will de-orbit. However, 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 designing our transfer vehicles for modularity and ease of integration with customer payloads, and with a full suite of capabilities that our customers will need on orbit. Under our Hosted Payload model, our vehicle, after transporting a customer payload to a specific orbit, 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. Our objective is to offer a higher degree of modularity which we believe has the potential to significantly increase orbital accessibility and/or lower manufacturing costs for a wide range of satellite operators.

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 plan to design Momentus’ future reusable vehicles to be capable of performing in-orbit servicing and are pursuing development activities that support this objective. Although we are still in very preliminary stages for developing this technology, our aim is to equip

Table of Contents

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.

Factors Affecting Our Performance

We believe that our performance and future success depend to a substantial extent on our ability to capitalize on the following opportunities, which in turn is subject to significant risks and challenges, including those discussed below and in the section titled “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 9, 2022.

In-Space Transport and Service Vehicles and Related Technology Development

Our primary research and development objectives focus on the development of our existing and future in-space transfer and service vehicles and related water plasma propulsion technology.

Vigoride is the first vehicle that Momentus is developing. Once fully developed, tested and validated in space, we expect Vigoride will be sufficient to meet our initial operating plan of offering in-space transportation in low-earth orbit to small satellites. Vigoride is intended to transport up to 750 kg of customer payload in low-earth orbit, although our payload capacity will likely be lower in most common configurations. We have set the delta-v and host power objectives for Vigoride at 2 km/sec and 1 kW, respectively, which we believe we can achieve a few years into our product roadmap.

Beyond our inaugural launch in May 2022, we have entered into launch services agreements with SpaceX that secure space for Vigoride on launch vehicles that SpaceX currently targets operating in the second half of 2022 and in 2023. We believe these early missions will allow us to further validate Vigoride’s capabilities. While securing space on the manifest is an important step, all future missions remain subject to the receipt of licenses and government approvals, and successful completion of our efforts to prepare our spacecraft for flight. The Company can offer no assurances that the vehicles that it plans to operate in future missions will be ready on time, or that they will operate as intended. Refer to “Risk Factors — We may not receive all required governmental licenses and approvals,” and “Risk Factors — We are dependent on the successful development of our satellite vehicles and related technology,” 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 9, 2022.

Early Vigoride vehicles will not be reusable, meaning that we will de-orbit them following delivery of their customer payloads. However, around the middle of this decade, we plan to make our vehicles capable of reuse such that, upon delivery of their payloads, they will be able to remain in space to conduct follow-on missions. Establishing reusable vehicles will require significant additional research and technological developments. We believe our choice of water as a propellant will help with the creation of reusable vehicles because water can be stored without special conditions, other than ensuring lines and tanks do not freeze or become obstructed with ice, for an indefinite amount of time and pumped easily. Additionally, water is safe and non-hazardous relative to commonly used propellants such as cryogenic components and hypergolic toxic fuels for chemical propulsion, or highly pressurized noble gases (such as xenon or krypton) for electrical propulsion. We believe that if we are able to achieve reusability, it will allow us to lower manufacturing and launch costs on a per-ride basis and achieve higher margins and returns for our investors while also reducing our environmental impact.

Beyond Vigoride, we envision bringing two progressively larger vehicles to market, which we call Ardoride and Fervoride. These vehicles will be similar to our Vigoride vehicle, but with larger structures, larger solar arrays, and more powerful propulsion systems in order to carry progressively larger payloads progressively further from Earth.

The successful development of our vehicles with water plasma propulsion technology involves uncertainties, including:

•timing in finalizing systems design and specifications;

•successful completion of test programs and demonstration missions;

•whether we will receive and the timing of receipt of licenses and government approvals that will allow us to fly our vehicles in space and gather valuable data that will assist in further development of our vehicles;

•meeting stated technological objectives and goals for the design on time, on budget and within target cost objectives;

Table of Contents

•our ability to obtain additional applicable approvals, licenses or certifications from regulatory agencies and maintaining current approvals, licenses or certifications;

•our ability to secure slots on our launch providers’ manifests;

•performance of our manufacturing facility despite risks that disrupt productions, such as natural disasters;

•performance of our third-party contractors that support our research and development activities;

•performance of a limited number of suppliers for certain raw materials and supplied components and their willingness to do business with us;

•our ability to protect our intellectual property critical to the design and function of our orbital transfer vehicles;

•our ability to continue funding and maintaining our current research and development activities;

•the impact of the COVID-19 pandemic on us, our customers, suppliers and distributors, and the global economy; and

•our ability to comply with the terms of the NSA and any related compliance measures instituted by the Security Director.

A change in the outcome of any of these variables could delay the development of our vehicles which in turn could impact our business and results of operations. Refer to “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 9, 2022.

Initial and Successive Launches

Our water plasma propulsion technology (that we are developing) is based on the use of microwave electrothermal or “MET,” thrusters, which we believe could ultimately provide safe, affordable, reliable, and regular in-space services, including Space Transportation, Hosted Payload, and In-Orbit Servicing. To accomplish this, we currently intend to:

Develop our commercial program for in-space transportation. We conducted our inaugural demonstration mission with our Vigoride vehicle (Vigoride 3) in May 2022. We currently plan to fly our second Vigoride vehicle on a SpaceX Transporter flight as early as November 2022. All future missions remain subject to the receipt of licenses and government approvals, and successful completion of our efforts to prepare our spacecraft for flight. The Company can offer no assurances that the vehicles that it plans to operate in future missions will be ready on time, or that they will operate as intended. Refer to “Risk Factors — We may not receive all required governmental licenses and approvals,” and “Risk Factors — We are dependent on the successful development of our satellite vehicles and related technology,” 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 9, 2022.

Launch our commercial program for Hosted Payload. If in the future our vehicles are operationalized for their intended in-space transport uses, we plan to develop a modular approach to satellite systems through our hosted payload model. For missions that require significant power for the payload and/or specific orbits, our objective is for Momentus to be able to provide a unique combination of a low-cost service model, in-orbit flexibility, and high electrical power generation.

Launch our commercial program for In-Orbit Servicing. If we develop reusability for our vehicles as currently contemplated, we believe we will be able to begin offering a suite of different in-orbit services to our clients. Although we have not yet developed these capabilities or the technology that would be required to provide these services, such services may include inspection, refueling, life extension, re-positioning, salvage missions, maintenance and repair, and de-orbiting. As the quantity of satellites sent into space continues to increase, we anticipate growing demand from such services.

The success of our in-space infrastructure services business will depend on our ability to successfully and regularly deliver customer satellites into custom orbits. Our early missions, particularly those in 2022 and 2023, including our inaugural mission (Vigoride 3) in May 2022, are intended to be demonstration missions. The primary goals of our planned demonstration missions are to test Vigoride on orbit and learn from any issues that we encounter. The lessons learned from demonstration missions will help inform changes we can make to our Vigoride vehicle as we seek to ultimately certify a design for production. Depending on the nature of issues we encounter, our schedule for future launches and other planned activities could be adversely affected. There can be no assurance that we will not experience operational or process failures and other problems during our future demonstration missions or on any future mission. Any failures or setbacks, particularly those that we experienced on our inaugural mission (Vigoride 3) and those that we may encounter on other early missions, could harm our reputation and have a material adverse

Table of Contents

effect on our business, financial condition and results of operation. Refer to “Risk Factors — We are dependent on the successful development of our satellite vehicles and related technology,” 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 9, 2022.

Customer Demand

We have received significant interest from a range of satellite operators, satellite manufacturers, satellite aggregators, launch service providers, and others. As of June 30, 2022, we had collected approximately $1.7 million in customer deposits related to future launches. While our standard contracts do not contain refunds or recourse provisions that enable our customers to recover any non-refundable deposits that have been paid, we issued refunds totaling $1.4 million to customers during the year ended December 31, 2021 due to cancelled launches for 2021 in order to foster future business relationships and customer goodwill.

Because our technologies have not yet been fully tested, our service offering to our customers on our demonstration missions will be limited. To reflect this, we expect to provide discounts to customers on these demonstration missions relative to the price we intend to eventually charge for our transportation services. During our demonstration missions, we plan to demonstrate Vigoride’s ability to deploy satellites. Once all customer payloads have been released, we plan to perform certain maneuvers and technology demonstrations to validate our technology and establish the potential commercial viability of our strategy. This approach limits risk for us as well as for our customers.

We have signed contracts for approximately $55 million in backlog (potential revenue), as of July 31, 2022. These agreements contain firm orders as well as options, allowing customers to opt-in to launches on shorter notice without requiring a separate agreement. The breadth of these signed contracts spans across 22 companies in 16 countries. 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 backlog is subject to meaningful customer concentration risk. As of July 31, 2022, approximately 70% of the total dollar value of our backlog related to three launch services providers and aggregators of launch services capacity, and their affiliates. The top ten customers in our backlog represent approximately 98% of the total dollar value of our backlog.

In addition, backlog is typically subject to large variations from quarter to quarter and comparisons of backlog from period to period are not necessarily indicative of future revenues. Furthermore, some contracts comprising the backlog are for services scheduled many years in the future, and the economic viability of customers with whom we have contracted is not guaranteed over time. As a result, the contracts comprising our backlog may not result in actual revenue in any particular period, or at all, and the actual revenue from such contracts may differ from our backlog estimates. The timing of receipt of revenues, if any, on projects included in the backlog could change because many factors affect the scheduling of missions and adjustments to contracts may also occur. The failure to realize some portion of our backlog could adversely affect our revenues and gross margins.

COVID-19 Impact

The COVID-19 pandemic has affected our business in the past, including our timeline for our formerly planned launch in April 2020, and has the potential to further impact our business in the future, including our plans for future launches and our ability to secure contracts with customers.

Our non-operations personnel began working from home in March 2020 as we reduced our in-person operations to prioritize the safety of our employees. We have begun to gradually bring essential personnel back to the office, while adhering to Centers for Disease Control and Prevention, federal, state and local protective standards. Subject to local regulations and the effectiveness of vaccination initiatives, we intend to gradually bring all employees back

Table of Contents

to the office; until then, we will continue to support our employees working from home. While remote working arrangements have affected our manufacturing and development timelines, the overall impact of this arrangement has not materially adversely affected the timeline of future launches.

In May 2020, to strengthen our liquidity position, we received a Paycheck Protection Program loan (the “PPP Loan”) in the amount of $1.0 million under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”); however, in September 2020, we repaid the PPP Loan in full.

Notwithstanding the foregoing, the impact of the COVID-19 pandemic on the Company’s business, results of operations and overall financial performance will ultimately depend on future developments, including the duration of the pandemic, possible recurrent outbreaks, the appearance of variants and the effectiveness of vaccines and other mitigation measures against variants, all of which are highly uncertain and cannot be predicted. See 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 9, 2022, for additional discussion of the potential impact of the COVID-19 pandemic on our business.

Recent Developments

Consummation of Business Combination

On August 12, 2021, the Company consummated a merger pursuant to certain 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 (the “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 is accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, SRAC is treated as the “acquired” company for financial reporting purposes. We are deemed the accounting predecessor of the combined business, and Momentus Inc., as the parent company of the combined business, is the successor SEC registrant, meaning that our consolidated financial statements for previous periods are disclosed in the registrant’s future periodic reports filed with the SEC.

The Business Combination will have a significant impact on our future reported financial position and results as a consequence of the reverse recapitalization. The most significant changes in Momentus’ future reported financial position and results are an increase in cash of $247.3 million, offset by additional transaction costs for the Business Combination. See Note 3.

As a result of the Business Combination, we became the successor to an SEC-registered and Nasdaq-listed company, which will require us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We have begun to incur additional recurring expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting, legal and administrative resources.

Term Loan and Security Agreement

On February 22, 2021, the Company entered into 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 needed by the June 30, 2021 deadline. Under the terms of the loan, if certain operating cash ratios are not met, the lender is granted a lien on the Company’s intellectual property while the loan is outstanding. Prior to the Business Combination, the lien was granted but was subsequently released as a result of the proceeds from the Business Combination. The repayment terms of the Term Loan provide for interest-only payments beginning March 1, 2021 through February 28, 2022.

Under the original terms of the loan, the principal amount was due and payable on March 1, 2022, however, during January 2022, the Company exercised its option to pay back the Term Loan over 24 months. The extended payment term resulted in a recast schedule with a lower effective interest rate. See Note 10.

Table of Contents

In addition, the lender will have certain rights to participate in future private equity offerings (including convertible notes or bridge financings) of Momentus.

SEC Settlement and CFIUS Review

We have incurred significant expenses in connection with the CFIUS review described below and have incurred and expect to incur significant expenses in connection with the implementation of the NSA described below. We have also incurred significant expenses related to the SEC settlement discussed below. As of June 30, 2022, the Company had incurred legal expenses of approximately $8.8 million related to these matters.

SEC Settlement

On July 13, 2021, the Company agreed to a settlement with the SEC on a “neither admit nor deny” basis, in anticipation of cease-and-desist proceedings relating to certain violations of antifraud provisions of the federal securities laws alleged by the SEC. As a result of the settlement, the Company agreed to a civil penalty of $7.0 million, $2.0 million of which was paid immediately and $5.0 million of which is payable within one year of the settlement order. The Company paid the remaining $5 million liability on July 8, 2022.

CFIUS Review and NSA

In February 2021, Momentus and its co-founder Mikhail Kokorich, with support from SRAC, submitted a joint notice to CFIUS for review of the historical acquisitions of interests in Momentus by Mr. Kokorich, his wife, and entities that they control in response to concerns of the U.S. Department of Defense (the “DoD”) regarding Momentus’ foreign ownership and control. On June 8, 2021, the Company entered into a National Security Agreement with 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), and the U.S. government, represented by the DoD and the U.S. Department of the Treasury (the “NSA”). In accordance with the NSA, Mr. Kokorich, Nortrone Finance S.A., Lev Khasis and his wife Olga Khasis, and Brainyspace LLC divested all the equity interests in Momentus owned or beneficially owned by them by selling such equity interests to the Company on June 8, 2021 (see below “Co-Founder Divestment”). The NSA also establishes various requirements and restrictions on the Company in order to protect national security, certain of which may materially and adversely affect our operating results due to uncertainty associated with and the cost of compliance with security measures, and limitations on our control over certain U.S. facilities, contracts, personnel, vendor selection and operations.

Co-Founder Divestment

In accordance with the NSA and pursuant to certain 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”) sold 100% of their respective equity interests in the Company on June 30, 2021. In exchange for their equity interests, the Company initially paid each entity $1, but will additionally pay up to an aggregate of $50,000,000, out of funds legally available therefor, to the Co-Founders, on a pro rata basis, as follows: (i) an aggregate of $40,000,000 to be paid out of funds legally available therefor, within 10 business days after the earlier of (A) a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $100,000,000 and (B) the Business Combination (the “First Payment Date”); and (ii) an aggregate of $10,000,000 to be paid out of funds legally available therefor, within 10 business days after a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $250,000,000 (determined without any reduction for the $100,000,000 previously received in respect of the First Payment Date).

As a result of the Business Combination, which generated $247.3 million of gross proceeds (as described in Note 3), the Company paid the Co-Founders $40.0 million in addition to the initial consideration paid of $3. The Company recorded the consideration paid as a reduction of common stock and additional paid in capital. Pursuant to the NSA, a portion of those divestment proceeds were placed in escrow accounts, and may not be released to the divested investors until after completion of audit by a third party auditor of the investors compliance with the NSA and the lapse of a 15 day period without an objection from the CFIUS Monitoring Agencies. Following the third party audit

Table of Contents

of the investors’ NSA compliance, all of the escrowed divestment proceeds were released to the Co-Founders as of March 1, 2022 in accordance with the NSA.

The payment came from proceeds of the Business Combination and PIPE Investment and therefore reduce the proceeds available to Momentus to fund its operations and capital expenditures going forward.

As part of the Repurchase Agreements, both 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 or indemnification claims either individual may have against the Company. Both Messrs. Kokorich and Khasis have, through counsel, disagreed with the Company's position. Absent a negotiated resolution, there is a chance that the parties may litigate the matter. The total cumulative potential exposure for the disputes with both Messrs. Kokorich and Khasis is presently unknown but exceeds $1 million. We express no opinion on the probable outcome of these matters.

See “Risk Factors —We may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all,” in our Annual Report on Form 10-K filed by the Company on March 9, 2022.

Components of Results of Operations

Service Revenue

We enter into contracts for ‘last-mile’ satellite and cargo delivery, payload hosting and in-orbit servicing options with customers that are primarily in the aerospace industry. The Company recognizes revenue (along with any other fees that have been paid) upon the earlier of the satisfaction of our performance obligation or when the customer cancels the contract.

Table of Contents

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 to customers on a case-by-case basis as necessary to preserve and foster future business relationships and customer goodwill. As a result of the Company’s inability to complete any launches in 2021 ~~respectively, two~~(refer to Note 4 for additional information), the Company issued customer refunds of $1.4 million to customers during the year ended December 31, 2021.

Cost of Revenue

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

Table of Contents

Research and Development

Research and development expenditures consist primarily of the cost for the following activities for developing existing and future technologies for our 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). The Company also records launch costs related to the testing of its Vigoride vehicles as research and development costs.

As of June 30, 2022, we have expensed all research and development costs associated with developing and building our vehicles. Once we have achieved technological feasibility and released the design for volume production, we will capitalize the costs to construct any additional components for the vehicles. We expect to continue to see an increase in our research and development expenses as we develop our next generation of vehicles.

Selling, General and Administrative

Selling, general and administrative expenses consist of human capital related expenses for employees involved in general corporate functions, including executive management and administration, accounting, finance, tax, legal, information technology, security, sales, marketing, and human resources; depreciation expense and rent relating to facilities, and equipment; professional fees; and other ~~purported stockholders filed putative~~general corporate costs. Headcount-related expenses primarily include salaries, bonuses, equity compensation expense and benefits. As we continue to grow as a company, we expect that our selling, general and administrative costs will increase on an absolute dollar basis. The Company also recorded one-time launch costs related to the validation of the business model as selling, general and administrative costs.

We also have begun to incur additional expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC as well as to comply with the NSA.

Interest Income

Interest income consists of interest earned on investment holdings in interest bearing bank accounts.

Interest Expense

Interest expense includes interest incurred related to our loan payables as well as the amortization of warrant discount and debt issuance costs.

Other Income/Expense

Other income/expense primarily relates to the change in the estimated fair value of our SAFE notes and warrants, and non-recurring fees incurred in conjunction with the SAFE and Term Loan financing, SEC settlement cost, and the Business Combination.

Income Tax Provision

We are subject to income taxes in the United States. Our income tax provision consists of an estimate of federal and state income taxes based on enacted federal and state tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

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 and a full valuation allowance for deferred tax assets.

Table of Contents

Results of Operations

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

Comparison of Financial Results for the Three Months Ended June 30, 2022 and 2021


	Three Months Ended June 30,
(in thousands)	2022		2021		$ Change		% Change
Service revenue	$	50	$	—	$	50	N/A
Cost of revenue	12		—		12		N/A
Gross margin	38		—		38		N/A

Operating expenses:
Research and development expenses	10,896		20,794		(9,898)		(48	%)
Selling, general and administrative expenses	12,861		9,740		3,121		32	%
Operating loss	(23,719)		(30,534)		6,815		(22	%)

Other income (expense):
Decrease in fair value of SAFE notes	—		100,803		(100,803)		(100	%)
Decrease in fair value of warrants	2,254		4,454		(2,200)		(49	%)
Realized gain on disposal of asset	1		—		1		N/A
Interest income	5		1		4		400	%
Interest expense	(1,413)		(3,389)		1,976		(58	%)
SEC settlement	—		(7,000)		7,000		(100	%)
Other income (expense)	—		(8)		8		(100	%)
(Loss) income before income taxes	(22,872)		64,327		(87,199)		(136	%)
Income tax expense	—		1		(1)		(100	%)
Net (loss) income	$	(22,872)	$	64,327	(87,199)		(136	%)

Service revenue

The revenue recognized during the three months ended June 30, 2022 was due to the Company’s first launch in May 2022. This revenue was recognized as the result of a completed performance obligation. Other performance obligations during the first flight (Vigoride 3) were negatively impacted by the Vigoride anomalies and led to concessions offered to customers, the value of which was unresolved as of June 30, 2022. Because of this unresolved variable consideration, the Company deferred additional revenues of $133 thousand which were originally expected during the first launch.

Cost of revenue

The cost of revenue of during the three months ended June 30, 2022 was due to the Company’s first launch in May 2022. The Company allocated the cost of the launch proportionally based on payload weight, with the customer payload portion related to completed performance obligations of $12 thousand recorded as cost of revenue. Because of the unresolved variable consideration, the Company deferred additional fulfillment costs of $14 thousand which were originally expected during the first launch.

Research and development expenses

Research and development expenses decreased from $20.8 million in the three months ended June 30, 2021 to $10.9 million in the three months ended June 30, 2022. The decrease was primarily due to a one-time impairment of $8.7 million of prepaid launch deposits in the prior year, offset by $0.6 million of launch costs amortized during the three months ended June 30, 2022. Spending on components, materials, and other costs decreased by $1.8 million along with subcontracted research and development costs which decreased by $0.8 million. These reductions were offset by additional payroll costs of $0.5 million (including an increase of $0.4 million in non-cash stock based compensation) due to an increase in headcount, and higher compensation packages related to the transition from start-up to a publicly traded company. The decrease was further offset by additional overhead and other costs of $0.4 million.

Table of Contents

Selling, general and administrative expenses

Selling, general and administrative expenses increased from $9.7 million in the three months ended June 30, 2021 to $12.9 million in the three months ended June 30, 2022. Payroll costs increased by $0.9 million, due to an increase in headcount, and also due to higher compensation packages for senior employees related to the transition from a start-up to a publicly traded company.Additional insurance costs of $0.7 million and additional general corporate costs of $0.8 million were incurred due to the extra requirements of operating as a publicly traded company. Increased spending of $1.9 million on non-legal professional fees was offset by a reduction of $1.8 million in legal spending as the Company’s activity related to the NSA and SEC topics discussed in Note 12 shifted from legal proceedings to compliance. The Company also incurred launch costs of $0.6 million during the three months ended June 30, 2022, related to the validation of a third party deployer of a partner company.

Decrease in fair value of SAFE notes

The decrease in the calculated fair value of SAFE notes during the three months ended June 30, 2021 was primarily due to an decrease in the estimated fair value of the Company’s stock, which at that time was driven by its relation to the market price of SRAC. All outstanding SAFE notes were converted to Common Stock upon completion of the Business Combination (see Note 9). Prior to conversion, our SAFE notes were classified as marked-to-market liabilities pursuant to ASC 480 and gains or losses were recorded as other income or expense.

Decrease in fair value of warrants

For the three months ended June 30, 2021, the decrease in the calculated fair value of the private loan-related warrants was due to the decrease in the estimated fair value of the Company’s stock. All outstanding warrants in the prior period were exercised in connection with the Business Combination.

For the three months ended June 30, 2022, the decrease in the calculated fair value of the Company’s currently outstanding warrants, which were assumed from the Business Combination, was primarily driven by the observable market price of the publicly listed warrants to purchase the Company’s stock under comparable terms. See Note 11.

Interest expense

Interest expense of $3.4 million for the three months ended June 30, 2021 relates to cash and amortization interest under the original one year term of the Term Loan. During January 2022, the Company exercised its option to extend repayment of the loan, resulting in a decrease of the effective interest rate and lower cash and amortization interest of $1.4 million for the three months ended June 30, 2022. See Note 10.

SEC Settlement

SEC settlement expense for the three months ended June 30, 2021 relates to a civil penalty of $7.0 million, $2 million of which was paid to the SEC immediately and $5 million of which is payable within one year of the settlement order, in July 2022. The Company paid the remaining $5 million liability on July 8, 2022.

Other income (expense)

Other expense in the three months ended June 30, 2022 and 2021 was immaterial.

Table of Contents

Comparison of Financial Results for the Six Months Ended June 30, 2022 and 2021


	Six Months Ended June 30,
(in thousands)	2022		2021		$ Change		% Change
Service revenue	$	50	$	130	$	(80)	(62	%)
Cost of revenue	12		48		(36)		(75	%)
Gross margin	38		82		(44)		(54	%)

Operating expenses:
Research and development expenses	20,867		30,700		(9,833)		(32	%)
Selling, general and administrative expenses	27,714		23,744		3,970		17	%
Operating loss	(48,543)		(54,362)		5,819		(11	%)

Other income (expense):
Decrease in fair value of SAFE notes	—		182,367		(182,367)		(100	%)
Decrease in fair value of warrants	1,803		12,537		(10,734)		(86	%)
Realized loss on disposal of asset	(69)		—		(69)		N/A
Interest income	5		2		3		150	%
Interest expense	(2,905)		(4,357)		1,452		(33	%)
SEC settlement	—		(7,000)		7,000		(100	%)
Other income (expense)	3		(187)		190		(102	%)
(Loss) income before income taxes	(49,706)		128,998		(178,704)		(139	%)
Income tax expense	—		1		(1)		(100	%)
Net (loss) income	$	(49,706)	$	128,998	(178,704)		(139	%)

Service revenue

The revenue recognized during the six months ended June 30, 2022 was due to the Company’s first launch in May 2022. This revenue was recognized as the result of a completed performance obligation. Other performance obligations during the first flight (Vigoride 3) were negatively impacted by the Vigoride anomalies and led to concessions offered to customers, the value of which was unresolved as of June 30, 2022. Because of this unresolved variable consideration, the Company deferred additional revenues of $133 thousand which were originally expected during the first launch.

The revenue recognized during the six months ended June 30, 2021 was due to a customer contract cancellation, resulting in the forfeiture of $0.1 million of non-refundable customer deposits.

Cost of revenue

The cost of revenue during the six months ended June 30, 2022 was due to the Company’s first launch in May 2022. The Company allocated the cost of the launch proportionally based on payload weight, with the customer payload portion related to completed performance obligations of $12 thousand recorded as cost of revenue. Because of the unresolved variable consideration, the Company deferred additional fulfillment costs of $14 thousand which were originally expected during the first launch.

The cost of revenue recorded during the six months ended June 30, 2021 was due to costs incurred related to the cancelled contract.

Research and development expenses

Research and development expenses decrease from $30.7 million in the six months ended June 30, 2021 to $20.9 million in the six months ended June 30, 2022. The decrease was primarily due to one-time impairments of $9.5 million of prepaid launch deposits in the prior year, offset by $0.6 million of launch costs amortized during the six months ended June 30, 2022. Spending on components, materials, and other costs decreased by $1.6 million along with subcontracted research and development costs which decreased by $1.6 million. These reductions were offset by additional payroll costs of $0.9 million (including an increase of $0.8 million in non-cash stock based compensation) due to an increase in headcount, and higher compensation packages related to the transition from start-up to a publicly traded company. The decrease was further offset by additional overhead and other costs of $0.5 million.

Table of Contents

Selling, general and administrative expenses

Selling, general and administrative expenses increased from $23.7 million in the six months ended June 30, 2021 to $27.7 million in the six months ended June 30, 2022. Non-stock based compensation payroll increased by $1.7 million, with total headcount increasing, and also due to higher compensation packages for senior employees related to the transition from a start-up to a publicly traded company.Additional insurance costs of $1.5 million and additional general corporate costs of $1.6 million were incurred due to the extra requirements of operating as a publicly traded company. Increased spending of $6.2 million on non-legal professional fees was offset by a reduction of $4.0 million in legal spending as the Company’s activity related to the NSA and SEC topics discussed in Note 12 shifted from legal proceedings to compliance. Stock based compensation cost decreased by $3.6 million due to the non-recurring stock modification in the prior period. The Company also incurred launch costs of $0.6 million during the six months ended June 30, 2022, related to the validation of a third party deployer of a partner company.

Decrease in fair value of SAFE notes

The decrease in the calculated fair value of SAFE notes during the six months ended June��30, 2021 was primarily due to a decrease in the estimated fair value of the Company’s stock, which at that time was driven by its relation to the market price of SRAC. All outstanding SAFE notes were converted to Common Stock upon completion of the Business Combination (see Note 9). Prior to conversion, our SAFE notes were classified as marked-to-market liabilities pursuant to ASC 480 and gains or losses were recorded as other income or expense.

Decrease in fair value of warrants

For the six months ended June 30, 2021, the decrease in the calculated fair value of the private loan-related warrants was due to the decrease in the estimated fair value of the Company’s stock. All outstanding warrants in the prior period were exercised in connection with the Business Combination.

For the six months ended June 30, 2022, the decrease in the calculated fair value of the Company’s currently outstanding warrants, which were assumed from the Business Combination, was primarily driven by the observable market price of the publicly listed warrants to purchase the Company’s stock under comparable terms. See Note 11.

Interest expense

Interest expense of $4.4 million for the six months ended June 30, 2021 relates to cash and amortization interest under the original one year term of the Term Loan. During January 2022, the Company exercised its option to extend repayment of the loan, resulting in a decrease of the effective interest rate and $2.9 million of cash and amortization interest for the six month period. See Note 10.

SEC Settlement

SEC settlement expense for the six months ended June 30, 2021 relates to a civil penalty of $7.0 million, $2 million of which was paid to the SEC immediately and $5 million of which is payable within one year of the settlement order, in July 2022. The Company paid the remaining $5 million liability on July 8, 2022.

Other income (expense)

Other expense in the six months ended June 30, 2021 was due to banking fees related to SAFE financing raised during the period. Other expense for the six months ended June 30, 2022 was immaterial.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily by issuing equity and debt, including the proceeds of the Business Combination and PIPE Investment. As of June 30, 2022, our principal sources of liquidity were our cash and cash equivalents in the amount of $109.1 million, which are held in cash or invested in money market funds.

Historical Cash Flows


	Six Months Ended June 30,
(in thousands)	2022		2021
Net cash provided by (used in)
Operating activities	$	(45,943)	$	(44,077)
Investing activities	(945)		(2,187)
Financing activities	(3,277)		55,713
Net change in cash and cash equivalents	$	(50,165)	$	9,449

Table of Contents

Operating Activities

Net cash used in operating activities for the six months ended June 30, 2022 was $45.9 million, driven primarily by headcount costs, research and development activities, and professional fees related to the SEC and NSA compliance costs, as well as net cash changes in operating assets and liabilities. Headcount related payroll costs, excluding accrued bonus and stock-based compensation, were $15.7 million. Research and development activity expenses, including materials, components, and subcontractor costs were $7.8 million. Professional fees for compliance related to the SEC and NSA topics discussed in Note 12, business development, accounting and audit, and other services, were $8.5 million. Legal fees, related to public company costs as well as the class action complaints discussed in Note 12 were $4.7 million. Office overheads, other general corporate expenses, and cash interest were $8.3 million. The Company paid for $1.2 million of launch costs during the six months ended June 30, 2022 that were amortized in connection with its first launch.

Net cash used in operating activities for the six months ended June 30, 2021 was $44.1 million, driven primarily by headcount costs, research and development activities, and selling, general, and administrative costs. Headcount related payroll costs, excluding accrued bonus and stock-based compensation, were $11.0 million. Research and development activity expenses, including materials, components, and subcontractor costs were $10.9 million. Legal fees, related to the SEC and CFIUS review topics, discussed in Note 12, were $8.7 million. Professional fees for recruiting, accounting and audit, and other services were $2.4 million. Office overheads, other general corporate expenses, and cash interest were $4.5 million. The Company also paid $2.0 million of its liability under the SEC settlement. Additionally, cash used in net working capital increased by $5.4 million.

Investing Activities

Net cash used in investing activities was $0.9 million and $2.2 million for the six months ended June 30, 2022, and 2021, respectively, which consisted primarily of purchases of machinery and equipment, build-outs in our facility, and capitalized implementation costs for cloud computing software.

Financing Activities

Net cash used in financing activities was $(3.3) million for the six months ended June 30, 2022, due to the first four months of principal repayment under the Term Loan.

Net cash provided by financing activities was $55.7 million for the six months ended June 30, 2021, consisting of proceeds from the issuance of SAFE notes and the Term Loan.

Funding Requirements

Specifically, our operating expenses will increase as we:

•scale up our corporate infrastructure, people, processes and systems;

•enhance and scale our sales and marketing function;

•scale up our manufacturing capabilities increasing facility footprint, purchasing additional manufacturing equipment;

•pursue further research and development related to developing our next generation vehicles;

•seek regulatory approvals for changes or updates to our vehicles;

•hire additional personnel;

•implement measures required under the NSA and seek to comply with the NSA’s requirements;

•maintain, expand and protect our intellectual property portfolio;

•comply with public company reporting requirements; and

•defend against litigation.

We expect that our current cash and cash equivalents, our projected gross profit (revenue less cost of revenue), and additional funding from equity or debt financings will enable us to fund an anticipated operating expenses, research

Table of Contents

and development expenses and capital expenditures beyond the next 12 months. Additionally, we believe that the payments in the ~~same court,~~form of non-refundable deposits we receive from our customers prior to launch will provide sufficient funding and liquidity to support costs incurred related to that mission.

We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. For example, the research and development, volume production, launch and in ~~cases captioned~~ ~~Hall v. Stable Road Acquisition Corp., et al.~~~~, No. 2:21-cv-05943,~~orbit operation of our vehicles have unpredictable costs and ~~Depoy v. Stable Road Acquisition Corp., et al.~~~~, No. 2:21-cv-06287, asserting substantially similar claims~~are subject to significant risks, uncertainties and ~~seeking substantially similar relief. Other, similar suits~~contingencies, many of which are beyond our control, that may ~~follow.~~

affect the timing and magnitude of these anticipated expenditures. Some of these risks and uncertainties are described in more detail 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 9, 2022, under the heading “Risk Factors — Risks Related to the Business and Industry of Momentus.”

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

Commitments and Contingencies

~~On July 20, 2021,~~

We are a ~~purported stockholder~~party to operating leases primarily for facilities (e.g., office buildings, warehouses and spaceport) under non-cancellable operating leases. These leases expire at various dates through 2028. Refer to Note 7.

We have principal of $21.2 million outstanding under the Term Loan. Refer to Note 10.

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

Per the SEC settlement, $5 million of the ~~Company sent~~civil penalty is due one year after the settlement. Refer to Note 12.As a ~~letter demanding that~~subsequent event, the Company ~~provide holders~~paid the remaining $5 million liability on July 8, 2022. See Note 14.

In addition, we enter into agreements in the normal course of business with vendors for research and development services and outsourced services, which are generally cancellable upon written notice. These payments are not included in this table of contractual obligations.

Co-Founder Divestment and Share Repurchase

In accordance with the NSA and pursuant to certain 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”) sold 100% of their respective equity interests in the Company on June 30, 2021. In exchange for their equity interests, the Company initially paid each entity $1, but will additionally pay up to an aggregate of $50,000,000, out of funds legally available therefor, to the Co-Founders, on a pro rata basis, as follows: (i) an aggregate of $40,000,000 to be paid out of funds legally available therefor, within 10 business days after the earlier of (A) a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $100,000,000 and (B) the Business Combination (the “First Payment Date”); and (ii) an aggregate of $10,000,000 to be paid out of funds legally available therefor, within 10 business days after a business combination or capital raising transaction or series of transactions (whether in the form of debt or equity) resulting in cash proceeds of no less than $250,000,000 (determined without any reduction for the $100,000,000 previously received in respect of the First Payment Date).

As a result of the Business Combination, which generated $247.3 million of gross proceeds (as described in Note 3), the Company paid the Co-Founders $40.0 million in addition to the initial consideration paid of $3. The Company recorded the consideration paid as a reduction of common stock and additional paid in capital. Pursuant to the NSA, a portion of those divestment proceeds were placed in escrow accounts, and may not be released to the divested investors until after completion of audit by a third party auditor of the investors compliance with the NSA and the lapse of a 15 day period without an objection from the CFIUS Monitoring Agencies. Following the third party audit of the investors’ NSA compliance, all of the escrowed divestment proceeds were released to the Co-Founders as of March 1, 2022 in accordance with the NSA.

Table of Contents

Off-Balance Sheet Arrangements

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

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments as of the balance sheet date that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Our actual results may differ from these estimates under different assumptions and conditions.

Revenue Recognition

We enter into short-term contracts for ‘last-mile’ satellite and cargo delivery, payload hosting and in-orbit servicing options with customers that are primarily in the aerospace industry.

We account for customer contracts in accordance with ASC Topic 606, Revenue from Contracts with Customers, which includes the following five-step model:

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

•Identification of the performance obligations in the contract.

•Determination of the transaction price.

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

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

Our contracts are cancellable for convenience by the customer and typically do not contain variable consideration. However, the full transaction price is collected in advance of the scheduled launch and all fees that are paid are non-refundable (and are not limited to deposits), regardless if the contract is cancelled by the customer or in the event a performance obligation is not satisfied by us. While the Company’s standard contracts do not contain refund or recourse provisions, the Company may issue full or partial refunds to customers on a case-by-case basis as necessary to preserve and foster future business relationships and customer goodwill. As a result of the Company’s ~~Class A~~inability to complete any launches in 2021 (refer to Note 4 for additional information), the Company issued customer refunds of $1.4 million to customers during the year ended December 31, 2021.

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

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

Table of Contents

Due to this unresolved variable consideration, the Company recorded the related customer deposits of $133 thousand as deferred revenues within current contract liabilities.

As of June 30, 2022 we have signed contracts with customers and have collected approximately $1.7 million in customer deposits, which are recorded as non-current contract liabilities in our consolidated balance sheet and will be recognized as revenue (along with any other fess that have been paid) upon the earlier of the satisfaction of our performance obligation or when the customer cancels the contract.

Loss Contingencies

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

Deferred Fulfillment and Prepaid Launch Costs

We prepay for certain launch costs to third party providers that will carry the orbital transfer vehicle to orbit. Prepaid costs allocated to the delivery of a customer’s payload are classified as deferred fulfillment costs and recognized as cost of revenue upon delivery of the customer’s 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.

On May 21, 2021, the Company received notification from one of its launch service providers that it was terminating two launch service agreements for flights scheduled during calendar year 2021 and that they considered the Company to be in default of prior payments totaling $8.7 million. The Company believed the prepayments would be non-recoverable as this was the third time the payload was rescheduled. As a result of the notification from one of its launch service providers, the Company recorded an impairment charge of $8.7 million of prepaid launch costs during the six months ended June 30, 2021. There was an unrelated impairment of $0.8 million the three and six months ended June 30, 2021.

Contract Liabilities

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

Table of Contents

Stock-based Compensation

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

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

Estimating the fair value of equity awards as of the grant date using valuation models, such as the Black-Scholes-Merton option pricing model, is affected by assumptions regarding a number of variables as disclosed above, and any changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. See Note 11 for the specific assumptions we used in applying the Black-Scholes-Merton option pricing model to determine the estimated fair value of our stock options and awards granted during the six months ended June 30, 2022.

We expect our share-based compensation cost will increase to the extent that we grant additional stock option awards to employees and non-employees. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate any remaining unearned share-based compensation cost or incur incremental cost. Share-based compensation cost affects our research and development expenses and selling, general, and administrative expenses.

SAFE Notes

We issued SAFE notes to investors which were converted to shares of Common Stock in connection with the Business Combination. Prior to conversion, we determined that the SAFE notes were not a legal form of debt (i.e., no creditors’ rights). The SAFE notes included a provision allowing for cash redemption upon the consummation of a change of control, the occurrence of which is outside the control of the Company. Therefore, we classified SAFE notes as liabilities as they were redeemable upon a change of control event which is not within the control of the Company. SAFE notes were recorded at fair value, and were subject to remeasurement through earnings at each balance sheet date until the date of their respective settlement and classified as marked-to-market liabilities pursuant to ASC 480.

We determined the estimated fair value of the SAFE notes by applying a Backsolve method within the Black-Scholes-Merton Option Pricing model. This methodology effectively allowed us to solve for the implied value of the business based on the terms of the SAFE investments (i.e. the value of the company, such that when allocated to the various securities, the value allocated to the SAFE investment equals the price the investor paid for such SAFE instrument).

Income Taxes

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

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

We are 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

Table of Contents

deemed to meet the “more likely than not” threshold would be recorded as a tax expense in the current year. The ~~Company has responded~~amount recognized is subject to ~~this stockholder~~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 ~~writing~~the aggregate could differ from the amount that is initially recognized.

Recent Accounting Pronouncements

From time to ~~explain its view~~time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the ~~demand is without merit.~~

impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

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

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Stable Road Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to SRC-NI Holdings, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

~~Special Note Regarding Forward-Looking Statements~~

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Form 10-Q including statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 filed with the SEC on June 10, 2021 and the definitive proxy statement/consent solicitation statement/prospectus filed with the SEC on July 23, 2021. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

~~Overview~~

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination (“Business Combination”) with one or more businesses. We intend to effectuate our initial Business Combination using cash from the proceeds our initial public offering (“Initial Public Offering”) and the private placement of the placement units (“Placement Units”), the proceeds of the sale of our shares in connection with our initial Business Combination (pursuant to backstop agreements we may enter into), shares issued to the owners of the target, debt issued to banks or other lenders or the owners of the target, or a combination of the foregoing.

~~The issuance of additional shares in connection with an initial Business Combination to the owners of the target or other investors:~~

	●	may significantly dilute the equity interest of investors in our Initial Public Offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock;
	●	~~may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;~~
	●	could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
	●	~~may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and~~
	●	~~may adversely affect prevailing market prices for our Class A common stock and/or warrants.~~

~~Similarly, if we issue debt securities or otherwise incur significant debt to banks or other lenders or the owners of a target, it could result in:~~

	●	~~default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;~~
	●	acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
	●	~~our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;~~
	●	~~our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;~~
	●	~~our inability to pay dividends on our common stock;~~

	●	using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;
	●	~~limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;~~
	●	~~increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;~~
	●	~~limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and~~
	●	~~other purposes and other disadvantages compared to our competitors who have less debt.~~

~~We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial Business Combination will be successful.~~

~~Proposed Business Combination with Momentus~~

On October 7, 2020, we entered into the Agreement and Plan of Merger with Momentus Inc. (“Momentus”), Project Marvel First Merger Sub, Inc. and Project Marvel Second Merger Sub, Inc., as amended on March 5, 2021, April 6, 2021 and June 29, 2021 (as may be further amended and/or restated from time to time, the “Merger Agreement”). See Note 1 to Item 1 above for a description of the Merger Agreement and the transactions contemplated thereby.

~~Results of Operations~~

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for our Initial Public Offering, described below, and identifying a target for our initial Business Combination. We do not expect to generate any operating revenues until after completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing our initial Business Combination.

For the three months ended June 30, 2021, we had net loss of $2,884,835, which consists of general and administrative expenses of $3,793,296 and an SEC settlement of $1,000,000, offset by interest income on marketable securities held in the Trust Account of $4,311 and a change in the fair value of warrant liabilities of $1,904,150.

For the six months ended June 30, 2021, we had net income of $2,881,651, which consists of change in the fair value of warrant liabilities of $10,623,913 and interest income on marketable securities held in the Trust Account of $23,357, offset by general and administrative expenses of $6,765,619 an SEC settlement of $1,000,000.

For the three months ended June 30, 2020, we had net income of $1,222,072, which consists of change in fair value of warrant liabilities of $1,185,700 and interest income on marketable securities held in the Trust Account of $355,824, offset by general and administrative expenses of $315,695 and a provision for income taxes of $3,757.

For the six months ended June 30, 2020, we had a net income of $2,431,243, which consists of change in fair value of warrant liabilities of $2,135,400 and interest income on marketable securities held in Trust Account of $1,025,613, offset by general and administrative expenses of $552,574 and provision for income taxes of $177,196.

~~Liquidity and Capital Resources~~

On November 13, 2019, we consummated our Initial Public Offering of 17,250,000 Units, which included the full exercise by the underwriter of the over-allotment option to purchase an additional 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of our Initial Public Offering, we consummated the sale of 545,000 Placement Units to the Sponsor and Cantor at a price of $10.00 per Placement Unit, generating gross proceeds of $5,450,000.

Following our Initial Public Offering, the exercise of the over-allotment option and the sale of the Placement Units, a total of $172,500,000 was placed in the Trust Account. We incurred $10,924,857 in transaction costs, including $3,450,000 of underwriting fees, $6,900,000 of deferred underwriting fees and $574,857 of other offering costs.

For the six months ended June 30, 2021, cash used in operating activities was $1,033,004. Net income of $2,881,651 was offset by interest earned on marketable securities held in the Trust Account of $23,357 and a change in the fair value of warrant liabilities of $10,623,913. Changes in operating assets and liabilities provided $6,732,615 of cash from operating activities.

For the six months ended June 30, 2020, cash used in operating activities was $984,160. Net income of $2,431,243 was offset by interest earned on marketable securities held in the Trust Account of $1,025,613, a change in the fair value of warrant liabilities of $2,135,400, and changes in operating assets and liabilities, which provided $254,390 of cash from operating activities.

As of June 30, 2021, we had cash and marketable securities in the Trust Account of $172,749,491. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions) to complete our initial Business Combination. We may withdraw interest to pay taxes. During the three and six months ended June 30, 2021, we withdrew $184,489 of interest income from the Trust Account to pay for taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of June 30, 2021, we had cash of $9,296 outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete our initial Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with our initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units identical to the Placement Units, at a price of $10.00 per unit at the option of the lender.

We do not currently believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

~~Going Concern~~

In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have until August 13, 2021 to consummate a Business Combination. It is uncertain that we will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. Management has determined that the mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about our ability to continue as a going concern.

~~Off-Balance Sheet Financing Arrangements~~

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

~~Contractual Obligations~~

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor a monthly fee of $10,000 for office space, utilities and administrative support provided to the Company. We began incurring these fees on November 8, 2019 and will continue to incur these fees monthly until the earlier of the completion of the initial Business Combination and the Company’s liquidation.

The underwriter is entitled to deferred commissions of $0.40 per unit of the gross proceeds from the Units sold in the Initial Public Offering, or $6,900,000 in the aggregate. The deferred commissions will become payable to the underwriter from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.

~~Critical Accounting Policies~~

The preparation of condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

~~Warrant Liabilities~~

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our 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 480 and ASC 815. We account for the Warrants in accordance with the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The Private Placement Warrants and the Public Warrants for periods where no observable traded price was available are valued using a Black-Scholes Option Pricing model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date.

~~Common Stock subject to possible redemption~~

We account for our common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of our condensed balance sheets.

~~Net income (loss) per common share~~

We apply the two-class method in calculating earnings per share. Net income (loss) per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable taxes, by the weighted average number of shares of Class A redeemable common stock outstanding for the period. Net income (loss) per common share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing net income (loss) less income attributable to Class A redeemable common stock, by the weighted average number of shares of Class A and Class B non-redeemable common stock outstanding for the periods presented.

~~Recent Accounting Pronouncements~~

In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt --debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.

~~Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Interest Rate Risk

The market risk inherent in our financial instruments and our financial position represents the potential loss arising from adverse changes in interest rates. As of June 30, ~~2021,~~2022, we ~~were not subject to any market or interest rate risk. Following the consummation~~had cash and cash equivalents of ~~our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been~~$109.1 million, which are primarily invested in ~~U.S. government treasury bills, notes or bonds~~highly liquid investments purchased with a remaining maturity of ~~180 days~~three months or ~~less or in certain money market funds that invest solely in U.S. treasuries. Due~~less. However, due to the short-term ~~nature~~maturities and the low-risk profile of ~~these~~our investments, ~~we believe there will be~~an immediate 10% change in interest rates would not have a material effect on the fair market value of our cash and cash equivalents.

Because the Term Loan indebtedness bear interests at a fixed rate, it is not impacted by changes in interest rates.

Foreign Currency Risk

There were no ~~associated~~ material ~~exposure to interest rate risk.~~

foreign currency transactions for the three and six months ended June 30, 2022 and 2021. Currently, a significant portion of our cash receipts and expenses are generated in U.S. dollars.

ITEM 4. ~~CONTROLS AND PROCEDURES~~

INTERNAL CONTROL OVER FINANCIAL REPORTING

Evaluation of Disclosure ~~controls~~Controls and ~~procedures are controls and other procedures that are~~Procedures

The Company’s internal control over financial reporting is a process designed ~~to ensure that information required to be disclosed in our reports filed~~by, or ~~submitted~~ under the ~~Exchange Act is recorded, processed, summarized~~supervision of, the Company’s principal executive and ~~reported within~~principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the ~~time~~reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods ~~specified~~are subject to the risk that controls may become inadequate because of changes in conditions, or that the ~~SEC’s rules and forms. Disclosure controls and~~degree of compliance with policies or procedures ~~include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under~~may deteriorate.

Our management, with the ~~Exchange Act is accumulated and communicated to our management, including~~participation of our Chief Executive Officer and Chief Financial Officer, ~~to allow timely decisions regarding required disclosure.~~

~~Evaluation of Disclosure Controls and Procedures~~

~~As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of~~has evaluated the effectiveness of ~~the design and operation of our disclosure controls and procedures as of June 30, 2021. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that~~ our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) ~~were ineffective~~ as of June 30, ~~2021, due solely to~~2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the ~~material weakness~~reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting ~~with respect to~~during the classification of the Company’s Private Warrants as components of equity instead of as derivative liabilities. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our consolidated financial statements were prepared in accordance with U.S. GAAP.

~~Changes in Internal Control Over Financial Reporting~~

~~During the three and six months~~fiscal quarter ended June 30, ~~2021, there has been no change~~2022 which were identified in ~~our internal control over financial reporting~~connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting, as the circumstances that led to the restatement of our consolidated financial statements described in our Annual Report on Form 10-K/A were identified during the second quarter of 2021 before the issuance of our amended Form 10-K. Management has implemented remediation steps to address the material weakness and to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications. As of June 30, 2021, the material weakness has not been remediated.

~~Limitations on the Effectiveness of Controls~~

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

PART II. Other Information

~~PART II - OTHER INFORMATION~~

ITEM 1. ~~LEGAL PROCEEDINGS~~

Legal Proceedings

~~Stockholder Litigation and Demands~~

~~On December 3, 2020, a purported stockholder of SRAC filed a complaint against us and~~See the disclosures under the caption “Legal Proceedings” in Note 12 to our ~~board of directors~~condensed consolidated financial statements in ~~the United States District Court~~this Form 10-Q for ~~the Southern District of New York, in a case captioned~~ ~~Wallace v. Stable Road Acquisition Corp., et al.~~, No. 1:20-cv-10193, alleging that our Registration Statement on Form S-4, originally filed with the SEC on November 2, 2020, as amended, omitted certain material information regarding the Proposed Transaction with Momentus, in violation of the securities laws. As relief, the complaint seeks an injunction barring us from proceeding with a stockholder vote with respect to, or consummating, the Proposed Transaction absent additional disclosures as well as unspecified costs and damages. On December 9, 2020, another purported stockholder of filed a complaint against us and our board of directors in the Supreme Court of the State of New York for the County of New York, in a case captioned ~~Ciccotelli v. Stable Road Acquisition Corp., et al.~~~~, No. 656895/2020, raising similar allegations and seeking similar relief as the complaint from the~~ ~~Wallace~~ action. In addition to the two complaints, the Company received three letters, dated November 9, 2020, November 19, 2020, and August 3, 2021, respectively, from purported stockholders raising similar allegations.

On July 15, 2021, a purported stockholder of SRAC filed a putative class action complaint against SRAC, Sponsor, Brian Kabot, James Norris, Momentus, and 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 complaint alleges that the defendants 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 between October 7, 2020 and July 13, 2021. On July 22, 2021, and August 4, 2021, respectively, two other purported stockholders filed putative class action complaints in the same court, in cases 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, asserting substantially similar claims and seeking substantially similar relief. Other, similar suits may follow. Other, similar suits may follow.~~

On July 20, 2021, a purported stockholder of the Company sent a letter demanding that the Company provide holders of the Company’s Class A Common Stock with a separate class vote on the Class A Share Increase Amendment. The Company has responded to this stockholder in writing to explain its view that the demand is without merit.~~SEC Settlement~~

On July 13, 2021, the SEC announced charges against SRAC, Momentus, and Momentus’s founder and former CEO, Mikhail Kokorich, for misleading claims about Momentus’s technology and about the U.S. government’s national security concerns about Mr. Kokorich. The SEC’s settled order finds that Momentus and Mr. Kokorich knowingly or recklessly made misrepresentations of material fact and misleading omissions in violation of antifraud provisions of U.S. federal securities laws, and that SRAC negligently made misrepresentations of material fact and misleading omissions in violation of antifraud provisions of U.S. federal securities laws, as well as related reporting and proxy solicitation provisions. The SEC also announced charges against the Sponsor and Brian Kabot, finding that Mr. Kabot negligently violated provisions of U.S. federal securities laws related to proxy solicitations and that Mr. Kabot and the Sponsor caused SRAC’s violation of negligence-based antifraud provisions of the federal securities laws. The SEC’s litigation is proceeding against Mr. Kokorich, against whom the SEC filed a complaint in the U.S. District Court for the District of Columbia. All parties except for Mr. Kokorich have settled with the SEC.

According to the SEC’s settled order, Mr. Kokorich and Momentus misled SRAC’s investors, including PIPE Investors, in two respects. First, “Momentus and SRAC both claimed that in 2019, Momentus had ‘successfully tested’ in space its key technology, a microwave electro-thermal (“MET”) water plasma thruster, that Momentus claimed was designed to move a satellite into custom orbit after launch. In fact, that 2019 test failed to meet Momentus’s own public and internal pre-launch criteria for success, and was conducted on a prototype that was not designed to generate commercially significant amounts of thrust.” Second, the order finds that Momentus and Mr. Kokorich also misrepresented the extent toour legal proceedings, which national security concerns involving Mr. Kokorich undermined Momentus’ ability to secure required governmental licenses essential to its operations. In addition, the order finds that SRAC repeated Momentus’s misleading statements in public filings associated with the Business Combination and failed its due diligence obligations to investors. According to the order, while SRAC claimed to have conducted extensive due diligence of Momentus, it never reviewed the results of Momentus’s in-space test or received sufficient documents relevant to assessing the national security risks poseddisclosures are incorporated herein by Mr. Kokorich. The order finds that Mr. Kabot participated in SRAC’s inadequate due diligence and in filing its inaccurate registration statements and proxy solicitations. The SEC’s complaint against Mr. Kokorich includes factual allegations that are consistent with the findings in the order.

Without admitting or denying the SEC’s findings, Momentus, SRAC, Mr. Kabot, and the Sponsor consented to an order requiring them to cease and desist from future violations. Momentus will pay a civil penalty of $7.0 million, SRAC will pay a civil penalty of $1.0 million, and Mr. Kabot will pay a civil penalty of $40,000. Momentus and SRAC have also agreed to provide PIPE Investors with the right to terminate their Subscription Agreements prior to the stockholder vote to approve the Business Combination with Momentus; the Sponsor has agreed to relinquish 250,000 founders’ shares it would otherwise have received upon consummation of the Business Combination with Momentus; and Momentus has agreed to undertakings requiring enhancements to its disclosure controls, including the creation of an independent board committee and retention of an internal compliance consultant for a period of two years.

Except as set forth above, to the knowledge of our management, there is no material litigation currently pending against us, any of our officers or directors in their capacity as such or against any of our property.

reference.

ITEM 1A. ~~RISK FACTORS~~

Risk Factors

~~Factors that could cause our actual results~~In addition to ~~differ materially from those~~the other information set forth in this report, ~~include~~you should carefully consider the risk factors ~~described~~discussed in “Risk Factors” in our most recent Annual Report on Form ~~10-K/A for~~10-K filed by the ~~year ended December 31, 2020 filed with the SEC~~Company on ~~June 10, 2021, and the definitive proxy statement/consent solicitation statement/prospectus filed with the SEC on July 23, 2021. As of the date of this Report,~~March 9, 2022, which could materially affect our business, financial condition or future results. Except as set forth below, we do not believe that there have been noany material changes to the risk factors disclosed in our Annual Report on Form ~~10-K/A~~10-K filed by the Company on March 9, 2022. The risks described below and in our Annual Report on Form 10-K filed by the Company on March 9, 2022, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, operating results and/or cash flows.

We have a limited history of delivering customer satellites into orbit using our transfer and service vehicles, and setbacks experienced during our initial mission or in future missions and other demonstration and commercial missions could have a material adverse effect on our business, financial condition and results of operation and could harm our reputation.

The success of our in-space infrastructure services business will depend on our ability to successfully and regularly deliver customer satellites to custom orbits. Our initial mission in May 2022 was a hybrid commercial-demonstration mission in which our vehicles would deliver paying customers’ satellites into orbit for the first time. We used a third-party deployer from a partner company to place our first customer satellite in orbit. Our Vigoride spacecraft reached low-earth orbit (“LEO”) and was able to deploy two out of nine customer satellites, but certain anomalies relating primarily to its communication and power systems limited our ability to communicate with the ~~SEC, except~~vehicle. Since that time, the Vigoride spacecraft has deployed four additional customer satellites, and we continue our efforts to deploy other customer satellites but have not yet confirmed the deployment of the remaining three customer satellites. The communication issues have also prevented Vigoride from performing orbit change maneuvers and technology demonstrations that were part of our program to validate our technology in space, and to demonstrate end-to-end in-space transfer operations.

We plan to use future Vigoride missions conduct on-orbit functional proof of principle and performance verification data for ~~those described~~the microwave electrothermal thruster (the “MET”) — this data will be used to assess the efficacy of the MET and identify potential refinements or upgrades for future versions of the MET in order to improve its performance. Like the ground test campaigns we conduct, on-orbit tests can be understood as incremental confidence-building measures — meeting key requirements for thrust, specific impulse, firing duration, lifetime and other performance parameters will help Momentus determine whether the MET is performing in accordance with our expectations. Doing so repeatedly, both on the ground and on orbit, will demonstrate the soundness and robustness of the design and is expected to contribute to growing customer confidence over time. Despite the anomalies experienced on the first flight of Vigoride (Vigoride 3), we are using the results of the inaugural mission, and expect to use the data collected from future missions, to determine what services or level of services we will be able to initially provide customers, including the degree to which Vigoride possesses capabilities of providing customers with LEO transfer services. We anticipate that each mission will also lay the groundwork for continual improvements and enhancements that we plan to flight-demonstrate on future missions. We plan to offer LEO transfer services to customers in the ~~definitive proxy statement/consent solicitation statement/prospectus~~future, based in part on the outcome of future missions and the MET demonstration, as well as the results of ongoing ground testing.

The version of our Vigoride vehicle that we flew on our inaugural mission (Vigoride 3) had never been flown in space. In addition, while we have previously flown our first generation MET in space, that mission did not demonstrate the MET’s ability to generate a measured orbit change in space, which is crucial to our ability to maneuver objects in space. Moreover, even if the unit generates thrust, there can be no assurance that other systems and subsystems can be operated in a manner that is sufficiently reliable and efficient to permit full commercialization of the technology.

While the objective of the inaugural mission involving the Vigoride system (Vigoride 3) was to successfully deploy satellites and perform certain maneuvers, we are mindful of the inherent risks involved in the initial use of hardware and complex systems in space given the difficulties of replicating all aspects of the environment and stresses that the system will experience in space during ground-based testing in simulated environments. We expect to learn and

gather valuable data during this inaugural mission of Vigoride as we continue to develop and improve the system and our other systems.

While we are conducting an analysis of the root causes of the anomalies experienced by Vigoride on its inaugural mission (Vigoride 3), there can be no assurance that we will not experience operational or process failures and other problems during future missions. Any failures, delays or setbacks, including the anomalies experienced in our inaugural mission, could harm our reputation and have a material adverse effect on our business, financial condition and results of operation.

We may not receive all required governmental licenses and approvals

We currently hold a license grant from the National Oceanic and Atmospheric Administration’s Commercial Report Sensing Regulatory Affairs (the “NOAA’s CRSRA”) office authorizing our first 10 Vigoride missions. However, the FAA denied a payload review application in May 2021 due to interagency concerns related to our foreign ownership and corporate structure. The FAA denial notice, which was received before we entered into the NSA, indicated that Momentus was engaged in addressing the government’s national security concerns and that the FAA could reconsider the application once that process is complete. As discussed elsewhere in this report, in May 2022 we received a favorable determination from the FAA of its application for payload review for our inaugural Vigoride mission (Vigoride 3). We also continue to progress toward implementation of the NSA, but there can be no assurance that our efforts will satisfy the government's national security concerns in time to obtain licenses or approvals needed for planned future missions.

U.S. government agencies other than the agency to which we apply to for a license or approval may review our applications to the FCC, FAA or other regulatory authorities, including to evaluate the national security implications of an application, which could result in delays. For example, in November 2020, the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector (the “Committee”) requested to review two of our FCC license applications to determine whether approval posed a risk to the national security or law enforcement interests of the United States. While in that instance, the Committee withdrew its request for review without explanation, it is possible that reviews of applications for licenses or approvals by the Committee or other regulatory bodies may occur in the future. Such reviews could delay the issuance of, or result in a denial of, licenses or approvals.

No assurance can be given that we will obtain FAA or FCC authorizations or other authorizations that may be necessary to our business in a timely manner, especially in light of the ongoing U.S. government oversight of Momentus discussed under “Business — Regulatory — National Security Agreement” in our Annual Report on Form 10-K filed with the SEC on March 9, 2022. Moreover, there is no guarantee that the FCC, the FAA and other U.S. government agencies will grant the necessary authorizations to operate our spaceflight business as planned, despite our progress toward implementation of the NSA. If we do not receive these approvals in a timely manner, our financial condition, results of operations, backlog and prospects will be materially adversely affected. For example, we have experienced erosion in our backlog from $86 million as of March 4, 2021 to $67 million as of January 31, 2022, to $55 million as of July ~~23, 2021.~~

31, 2022, as customers chose to cancel their contracts with us and seek alternative providers, partly due to delays in our scheduled missions. If we continue to experience delays in receiving these approvals, we could experience further erosion in our backlog.

We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to achieve or maintain profitability.

We have incurred significant losses since inception. We incurred operating losses of $99.8 million and $34.7 million for the years ended December 31, 2021 and 2020, respectively. While the inaugural mission of our Vigoride spacecraft (Vigoride 3) delivered our first customer satellites into orbit, anomalies experienced in the mission have prevented us from delivering all customer satellites into orbit or fully testing and validating our technology, and it is difficult for us to predict our future operating results. As a result, our losses may be larger than anticipated, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able to maintain or increase profitability.

We expect our operating expenses to increase over the next several years as we scale our operations, increase selling, general and administrative and research and development efforts relating to building corporate infrastructure to implement the NSA, being a public company, new service offerings and technologies and hiring more employees. These efforts may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow. Furthermore, if our future growth and operating performance fail to meet investor or analyst expectations, or if we have future negative cash flow or losses resulting

from expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to convert our orders in backlog into revenue.

As of July 31, 2022, our backlog consisted of approximately $55 million in customer contracts, including options for future services. However, these contracts are cancellable by customers for convenience. If a customer cancels a contract before it is required to pay the last deposit prior to launch, we may not receive all potential revenue from these orders, except for an initial non-refundable deposit which is paid at the time the contract is signed. In certain situations, Momentus may decide to refund customers for their deposits, even though it is not contractually required, to maintain goodwill with customers.

In addition, backlog may be subject to large variations from quarter to quarter and comparisons of backlog from period to period are not necessarily indicative of future revenues. Furthermore, some contracts comprising the backlog are for services scheduled many years in the future, and the economic viability of customers with whom we have contracted is not guaranteed over time. As a result, the contracts comprising our backlog may not result in actual revenue in any particular period, or at all, and the actual revenue from such contracts may differ from our backlog estimates. The timing of receipt of revenues, if any, on projects included in the backlog could change because many factors affect the scheduling of missions and adjustments to contracts may also occur. The failure to realize some portion of our backlog could adversely affect our revenues and gross margins. Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition. In some instances, we could reasonably use different estimates and assumptions, and changes in estimates are likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates.

In addition, if we do not receive regulatory approvals in a timely manner, or our future missions experience anomalies in addition to the issues experienced by our inaugural Vigoride mission (Vigoride 3), our backlog and prospects will be materially adversely affected. For example, we have experienced erosion in our backlog of $86 million as of March 4, 2021 to $67 million as of January 31, 2022 to $55 million as of July 31, 2022, as customers chose to cancel their contracts with us and seek alternative providers due to delays in our scheduled missions as we await receipt of necessary governmental approvals and the anomalies associated with our inaugural Vigoride mission (Vigoride 3). If we continue to experience delays in receiving these approvals or future missions experience significant anomalies, we could experience further erosion in our backlog.

If our spacecraft fail to operate as intended, it could have a material adverse effect on our business, financial condition and results of operations.

The manufacturing, testing, launching and operation of a spacecraft involves complex processes and technology. Our satellites employ advanced technologies and sensors that are exposed to severe environmental stresses that have and could affect the performance of satellites. Hardware component problems and software issues could lead to deterioration in performance or loss of functionality of a spacecraft. In addition, human operators may execute improper commands that may negatively impact a spacecraft performance. Exposure of our spacecraft to an unanticipated catastrophic event, such as collision with space debris, could reduce the performance of, or completely destroy, the affected spacecraft.

For example, the inaugural flight of our Vigoride spacecraft (Vigoride 3) reached LEO and was able to deploy two out of nine customer satellites, but certain anomalies relating primarily to its communication and power systems limited our ability to communicate with the vehicle. Since that time, the Vigoride spacecraft has deployed four additional customer satellites, and we continue our efforts to deploy other customer satellites but have not yet confirmed the deployment of the remaining three customer satellites. The communication issues have also prevented Vigoride from performing orbit change maneuvers and technology demonstrations that were part of our program to validate our technology in space, and to demonstrate end-to-end in-space transfer operations.

During any period of time in which a spacecraft is not operational, we may lose most or all of the revenue that otherwise would have been derived from it. Our inability to repair or replace a defective type of spacecraft or correct any other technical problem in a timely manner could result in a significant loss of revenue. If a spacecraft experiences a significant anomaly such that its type is no longer operational, it would significantly impact our business, prospects and profitability. Additionally, any satellite failures could damage our reputation and ability to obtain future customers for our launch services, prevent us from receiving any payments contingent on a successful launch and increase our insurance rates, which could have a material adverse effect on our business and prospects.

We may experience warranty claims for failures, schedule delays or other problems with existing or new products.

Many of the products we develop and manufacture are technologically advanced systems that must function under demanding operating conditions. The sophisticated and rigorous design, manufacturing and testing processes and practices we employ do not entirely prevent the risk that we may not be able to successfully launch or manufacture our products on schedule or that our products may not perform as intended.

When our products fail to perform adequately, some of our contracts require us to forfeit a portion of our expected profit, receive reduced payments, provide a replacement product or service or reduce the price of subsequent sales to the same customer. Performance penalties may also be imposed when we fail to meet delivery schedules or other measures of contract performance. In connection with our inaugural Vigoride mission (Vigoride 3), the anomalies that impacted the mission resulted in concession offered to mission customers impacted by the anomalies. We do not generally insure against potential costs resulting from any required remedial actions or costs or loss of sales due to postponement or cancellation of scheduled operations or product deliveries.

ITEM 2. ~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

~~None.~~

ITEM 3. ~~DEFAULTS UPON SENIOR SECURITIES~~

Defaults Upon Senior Securities.

None.

~~None.~~

ITEM 4. ~~MINE SAFETY DISCLOSURES~~

Mine Safety Disclosures.

None.

~~Not applicable.~~

ITEM 5. ~~OTHER INFORMATION~~

Other Information.

None.

~~None.~~

~~ITEM~~Item 6. ~~EXHIBITS~~

Exhibits and Financial Statement Schedules

~~The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.~~


~~No.~~Exhibit Number		Description of Exhibit
~~2.1~~2.1†		~~Amendment No. 2 to~~ Agreement and Plan of Merger, dated as of ~~April 6, 2021,~~October 7, 2020, by and among Stable Road Acquisition Corp., Project Marvel First Merger Sub, Inc., Project Marvel Second Merger Sub, LLC, and Momentus Inc. (incorporated by reference to ~~SRAC’s~~Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on ~~April 8, 2021)~~October 7, 2020).
~~2.2~~	Amendment No. 3 to the Merger Agreement, dated as of June 29, 2021, by and among Parent, Project Marvel First Merger Sub, Inc., Project Marvel Second Merger Sub, LLC and Momentus Inc. (incorporated by reference to SRAC’s Current Report on Form 8-K, filed on June 29, 2021).
~~3.1~~	~~Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to SRAC’s Current Report on Form 8-K, filed on May 13, 2021).~~
31.1*		Certification ~~of Principal Executive Officer~~ Pursuant to ~~Securities Exchange Act~~ Rules 13a-14(a) and ~~15(d)-14(a), as adopted~~15d-14(a) Under The Securities Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification ~~of Principal Financial Officer~~ Pursuant to ~~Securities Exchange Act~~ Rules 13a-14(a) and ~~15(d)-14(a), as adopted~~15d-14(a) Under The Securities Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification ~~of Principal Executive Officer~~ Pursuant to 18 U.S.C. Section 1350, ~~as adopted~~As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification ~~of Principal Financial Officer~~ Pursuant to 18 U.S.C. Section 1350, ~~as adopted~~As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		~~Inline~~ XBRL Taxonomy Extension Schema ~~Document.~~Document
101.CAL*		~~Inline~~ XBRL Taxonomy Extension Calculation Linkbase ~~Document.~~Document
101.DEF101.LAB		~~Inline~~ XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase ~~Document.~~Document
101.LAB104		~~Inline XBRL Taxonomy Extension Label Linkbase Document.~~
101.PRE*	~~Inline XBRL Taxonomy Extension Presentation Linkbase Document.~~
~~104~~	Cover Page Interactive Data File (formatted asin Inline XBRL and contained in Exhibit 101).

*	~~Filed herewith.~~
**	~~Furnished.~~

Pursuant to the requirements of the Securities ~~Exchange~~ Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware				84-1905538
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1345 Abbot Kinney Blvd. Venice,
3901 N. First Street San Jose, California			~~90291~~95134
(Address of ~~principal executive offices)~~	Principal Executive Offices)	(Zip Code)


Title of each class		Trading Symbol(s)		~~Trading Symbol(s)~~	Name of each exchange on which registered
~~Units, each consisting of one share of Class A Common Stock and one-half of one Redeemable Warrant~~	~~SRACU~~		~~The Nasdaq Stock Market LLC~~
Class A ~~Common Stock, par value $0.0001 per share~~common stock		MNTS		~~SRAC~~	The Nasdaq ~~Stock~~Capital Market LLC
~~Redeemable~~ Warrants ~~each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50~~		MNTSW		~~SRACW~~	The Nasdaq ~~Stock~~Capital Market LLC


Large accelerated filer	☐o	Accelerated filer	☐o
Non-accelerated filer	☒x	Smaller reporting company	☒x
		Emerging growth company	☒x


			Page
Part I.I - Financial Information			15
Item 1. Unaudited Financial Statements			15
Condensed Consolidated Balance Sheets ~~as of June 30, 2021 (unaudited) and December 31, 2020~~			15
~~Unaudited~~ Condensed Consolidated Statements of Operations ~~for the three and six months ended June 30, 2021 and 2020~~			26
~~Unaudited~~ Condensed Consolidated Statements of ~~Changes in~~ Stockholders’ Equity ~~for the three and six months ended June 30, 2021 and 2020~~(Deficit)			37
~~Unaudited~~ Condensed Consolidated Statements of Cash Flows ~~for the six months ended June 30, 2021 and 2020~~			48
Notes to ~~Unaudited~~the Condensed Consolidated Financial Statements			59
Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations			2036
Item 3. Quantitative and Qualitative Disclosures About Market Risk			2456
Item 4. Controls and Procedures			2456
Part ~~II.~~II - Other Information			57
Item 1. Legal Proceedings			2557
Item 1A. Risk Factors			2557
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			2660
Item 3. Defaults Upon Senior Securities			2660
Item 4. Mine Safety Disclosures			2660
Item 5. Other Information			2660
Item 6. Exhibits			2660
Signatures			2761


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Stable Road Acquisition Corp.~~
~~(Exact name of registrant as specified in its charter)~~


	June 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	109,052	$	160,036
Restricted cash, current	1,005		197



Prepaids and other current assets	7,517		9,431
Total current assets	117,574		169,664
Property, machinery and equipment, net	4,514		4,829
Intangible assets, net	720		349
Operating right of use asset	6,991		7,604

Restricted cash, non-current	325		314
Other non-current assets	3,650		3,065
Total assets	$	133,774	$	185,825

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	1,124	$	1,911
Accrued expenses	7,031		9,785
Loan payable, current	10,113		20,907
Contract liabilities, current	481		—
Operating lease liability, current	1,132		1,189
Share repurchase liability	5,780		—
Other current liabilities	5,043		5,075
Total current liabilities	30,704		38,867
Contract liabilities, non-current	1,206		1,554
Loan Payable, non-current	8,544		—
Warrant liability	3,945		5,749

Operating lease liability, non-current	6,716		7,284
Other non-current liabilities	454		483
Total non-current liabilities	20,865		15,070
Total liabilities	51,569		53,937
Commitments and Contingencies (Note 12)	0		0
Stockholders’ equity:
Common stock, $0.00001 par value; 250,000,000 shares authorized and 83,264,832 issued and outstanding as of June 30, 2022; 250,000,000 shares authorized and 81,211,781 issued and outstanding as of December 31, 2021	1		1
Additional paid-in capital	340,593		340,570

Accumulated deficit	(258,389)		(208,683)
Total stockholders’ equity	82,205		131,888
Total liabilities and stockholders’ equity	$	133,774	$	185,825

	June 30, 2021			December 31, 2020
	(unaudited)
ASSETS
Current assets
Cash	$	9,296		$	214,811
Prepaid expenses and other current assets		43,922			81,850
Prepaid income taxes		328,538			328,538
Total Current Assets		381,756			625,199

Cash and investments held in Trust Account		172,749,491			173,107,749
Total Assets	$	173,131,247		$	173,732,948

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	9,180,583		$	2,485,896
Promissory note – third party		321,500			—
Promissory note – related party		321,500			—
Total Current Liabilities		8,823,583			2,485,896

Deferred underwriting fee payable		6,900,000			6,900,000
Warrant liabilities		37,453,975			48,077,888
Total Liabilities		54,177,558			57,463,784

Commitments and Contingencies

Class A common stock subject to possible redemption, 11,395,368 and 11,126,916 shares at $10.00 per share redemption value as of June 30, 2021 and December 31, 2020, respectively		113,953,680			111,269,160

Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 6,379,970 and 6,668,084 issued and outstanding (excluding 11,395,368 and 11,126,916 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively		638			666
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 4,312,500 shares issued and outstanding as of June 30, 2021 and December 31, 2020		431			431
Additional paid-in capital		42,535,328			45,416,946
Accumulated deficit		(37,536,388	)		(40,418,039	)
Total Stockholders’ Equity		5,000,009			5,000,004
Total Liabilities and Stockholders’ Equity	$	173,131,247		$	173,732,948


	Three and six months ended June 30, 2022
	Preferred stock			FF Preferred stock			Common stock – Class A			Common stock – Class B			Common stock – Class A		Additional paid in capital			Accumulated deficit		Total stockholders’ equity
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount			Shares			Amount
Balance, December 31, 2021	—	$	—	—	$	—	—	$	—	—	$	—		81,211,781	$	1		$	340,570	$	(208,683)	$	131,888
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		—	—			170,751	—			48		—		48
Issuance of common stock upon vesting of RSUs	—	—		—	—		—	—		—	—			113,710	—			—		—		—
Share repurchase related to Section 16 Officer tax coverage exchange	—	—		—	—		—	—		—	—			(18,673)	—			(59)		—		(59)
Stock-based compensation	—	—		—	—		—	—		—	—			—	—			2,212		—		2,212
Share repurchase valuation adjustment	—	—		—	—		—	—		—	—			—	—			(6,000)		—		(6,000)
Shares issued upon exercise of warrant	—	—		—	—		—	—		—	—			278,146	—			—		—		—
Net loss	—	—		—	—		—	—		—	—			—	—			—		(26,834)		(26,834)
Balance, March 31, 2022	—	$	—	—	$	—	—	$	—	—	$	—		81,755,715	$	1		$	336,771	$	(235,517)	$	101,255
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		—	—			1,294,668	—			345		—		345
Issuance of common stock upon vesting of RSUs	—	—		—	—		—	—		—	—			149,953	—			—		—		—
Issuance of common stock purchase of ESPP	—	—		—	—		—	—		—	—			77,162	—			190		—		190
Share repurchase related to Section 16 Officer tax coverage exchange	—	—		—	—		—	—		—	—			(12,666)	—			(38)		—		(38)
Stock-based compensation	—	—		—	—		—	—		—	—			—	—			3,105		—		3,105
Share repurchase valuation adjustment	—	—		—	—		—	—		—	—			—	—			220		—		220

Net loss	—	—		—	—		—	—		—	—			—	—			—		(22,872)		(22,872)
Balance, June 30, 2022	—	$	—	—	$	—	—	$	—	—	$	—		83,264,832	$	1		$	340,593	$	(258,389)	$	82,205


	Three and six months ended June, 30 2021
	Preferred stock			FF Preferred stock			Common stock – Class A			Common stock – Class B			Common stock – Class A		Additional paid in capital			Accumulated deficit		Total stockholders’ deficit
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount			Shares			Amount
Balance, December 31, 2020	144,875,941	—		20,000,000	—		18,398,005	—		70,000,000	—			—	$	—		$	39,866	$	(329,338)	$	(289,472)
Retroactive application of recapitalization	(144,875,941)	—		(20,000,000)	—		(18,398,005)	—		(70,000,000)	—			62,510,690	1			—		—		—
Balance, December 31, 2020, as adjusted	—	$	—	—	$	—	—	$	—	—	$	—		62,510,690	$	1		$	39,866	$	(329,338)	$	(289,472)
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		—	—			270,582	—			24		—		24
Stock-based compensation	—	—		—	—		—	—		—	—			—	—			5,768		—		5,768
Net income	—	—		—	—		—	—		—	—			—	—			—		64,671		64,671
Balance, March 31, 2021	—	$	—	—	$	—	—	$	—	—	$	—		62,781,272	$	1		$	45,658	$	(264,667)	$	(219,009)
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		—	—			39,515	—			11		—		11
Stock-based compensation	—	—		—	—		—	—		—	—			—	—			2,344		—		2,344
Share repurchase	—	—		—	—		—	—		—	—			(25,601,733)	—			(22,000)				(22,000)
Net income	—	—		—	—		—	—		—	—			—	—			—		64,327		64,327
Balance, June 30, 2021	—	$	—	—	$	—	—	$	—	—	$	—		37,219,054	$	—		$	26,013	$	(200,340)	$	(174,326)

	Class A Common Stock						Class B Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Shares		Amount		Capital			Deficit			Equity
Balance – January 1, 2021		6,668,084		$	666			4,312,500	$	431	$	45,416,946		$	(40,418,039	)	$	5,000,004

Change in value of Class A common stock subject to possible redemption		(576,648	)		(57	)		—		—		(5,766,423	)		—			(5,766,480	)

Net income		—			—			—		—		—			5,766,486			5,766,486

Balance – March 31, 2021		6,091,436		$	609			4,312,500	$	431	$	39,650,523		$	(34,651,553	)	$	5,000,010

Change in value of Class A common stock subject to possible redemption		308,196			31			—		—		3,081,929			—			3,081,960

Class A shares redeemed		(19,662	)		(2	)		—		—		(197,124	)		—			(197,126	)

Net loss		—			—			—		—		—			(2,884,835	)		(2,884,835	)

Balance – June 30, 2021		6,379,970		$	638			4,312,500	$	431	$	42,535,328		$	(37,536,388	)	$	5,000,009

	For the six months ended June 30, 2021			For the six months ended June 30, 2020
Cash Flows from Operating Activities:
Net income	$	2,881,651		$	2,431,243
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(23,357	)		(1,025,613	)
Change in fair value of warrant liabilities		(10,623,913	)		(2,135,400	)
Changes in operating assets and liabilities
Prepaid expenses and other current assets		37,928			133,423
Prepaid income taxes		—			(330,980	)
Accounts payable and accrued expenses		6,694,687			(9,266	)
Income taxes payable		—			(47,567	)
Net cash used in operating activities		(1,033,004	)		(984,160	)

Cash Flows from Investing Activities:
Cash withdrawn from Trust Account for taxes		184,489			824,873
Cash withdrawn from Trust Account for redemption of common stock		197,126			—
Net cash provided by investing activities		381,615			824,873

Cash Flows from Financing Activities:
Proceeds from promissory note – third party		321,500			—
Proceeds from promissory note – related party		321,500			—
Redemption of common stock		(197,126	)		—
Net cash provided by financing activities		445,874			—

Net Change in Cash		(205,515	)		(159,287	)
Cash – Beginning of period		214,811			1,093,184
Cash – End of period	$	9,296		$	933,897

Supplemental Disclosure of Non-Cash Activities:
Change in value of Class A common stock subject to possible redemption	$	2,684,520		$	295,840

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Redeemable Class A Common Stock
Numerator: Net Income allocable to Redeemable Class A Common Stock
Interest Income	$	4,311		$	355,824		$	23,357		$	1,025,613
Less: Income and Franchise Tax available to be withdrawn from the Trust Account		(4,311	)		(355,824	)		(23,357	)		(1,025,613	)
Redeemable Net Income	$	—		$	—		$	—		$	—
Denominator: Weighted Average Redeemable Class A Common Stock
Redeemable Class A Common Stock, Basic and Diluted		17,240,709			17,250,000			17,245,329			17,250,000
Net Income/Basic and Diluted Redeemable Class A Common Stock	$	0.00		$	0.02		$	0.00		$	0.04

Non-Redeemable Class A and B Common Stock
Numerator: Net Income minus Net Income - Basic
Net Income	$	(2,884,835	)	$	1,222,072		$	2,881,651		$	2,431,243
Less: Redeemable Net Income - Basic		—			—			—			—
Non-Redeemable Net Loss	$	(2,884,835	)	$	1,222,072		$	2,881,651		$	2,431,243
Denominator: Weighted Average Non-Redeemable Class A and B Common Stock
Non-Redeemable Class A and B Common Stock, Basic		4,857,500			4,857,500			4,857,500			4,857,500
Net income, Basic Non-Redeemable Class A and B Common Stock	$	(0.59	)	$	0.19		$	0.59		$	0.35

Non-Redeemable Class A and B Common Stock
Numerator: Net Income minus Net Earnings - Diluted
Non-Redeemable Net Income - Basic	$	(2,884,835	)	$	1,222,072		$	2,881,651		$	2,431,243
Less: Change in Fair Value of Derivative Liability		(1,904,150	)		(1,185,700	)		(10,623,913	)		(2,135,400	)
Non-Redeemable Net Loss - Diluted	$	(4,788,985	)	$	36,372		$	(7,742,262	)	$	295,843
Denominator: Weighted Average Non-Redeemable Class A and B Common Stock
Non-Redeemable Class A and B Common Stock, Diluted		5,005,558			4,857,500			7,105,104			4,857,500
Net loss, Diluted Non-Redeemable Class A and B Common Stock	$	(0.96	)	$	0.19		$	(1.09	)	$	0.35

			Held-To-Maturity		Amortized Cost				Gross Holding Gains				Fair Value
December 31, 2020			U.S. Treasury Securities		$	173,107,113			$	1,887			$	173,109,000

	Quoted Prices in Active Markets
Description	Level		June 30, 2021
Assets:
Marketable securities held in Trust Account – U.S. Treasury Securities Money Market Fund		1	$	172,748,233

Input	June 30, 2021			December 31, 2020
Risk-free interest rate		0.89	%		1.73	%
Holding period (years)		5.12			5.25
Volatility		25.00	%		25.00	%
Exercise price	$	11.50		$	11.50
Underlying value	$	13.97		$	9.50

	Private Placement
Fair value as of December 31, 2020	$	2,452,500
Change in valuation inputs or other assumptions		(1,223,525	)
Fair value as of June 30, 2021	$	1,228,975


~~STABLE ROAD ACQUISITION CORP.~~MOMENTUS INC.

Date: August 11, ~~2021~~2022		By:	/s/ ~~Brian Kabot~~John Rood
		Name:	~~Brian Kabot~~John Rood
		Title:	Chief Executive Officer
	(Principal Executive Officer)

Date: August 11, ~~2021~~2022		By:	/s/ ~~James Norris~~Jikun Kim
		Name:	~~James Norris~~Jikun Kim
		Title:	Chief Financial Officer
	(Principal Financial and Accounting Officer)