~~Risk Factors — A key component~~Table 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.~~Contents

Services Overview

When our technology is fully developed and validated in the future, we currently plan to provide the following infrastructure services to the space economy:

Space Transportation. We are ~~designing~~developing a space transportation service based on a hub-and-spoke model, which combines ride share launch on a medium or large rocket with last-mile delivery using one of our ~~OTVs.~~OSVs. Under this model, our customers will deliver their payload to us a few months prior to launch for integration onto our vehicle. Once we have integrated our customers’ payloads, we will then ship our vehicle, holding the customer payload fixture, to the launch site, where it will be integrated onto the rocket. The rocket will then transport our vehicle to the drop-off orbit. After separation from the rocket, our vehicle will transport our customers’ payloads to their chosen final orbit.

We 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, our vehicles will de-orbit after delivering our customer payloads to their final ~~orbits, our vehicles will de-orbit. However,~~orbits. Ultimately, our plan is to develop the capability for our vehicles to be reusable, such that, upon delivery of the payload, they will be capable of remaining in space to conduct additional missions.

Hosted Payload. We are ~~designing~~developing a modular approach to satellite systems through our subscription-based hosted payload service. This service is designed to help our customers avoid a meaningful capital outlay to design and manufacture a bespoke satellite as they would under traditional business models, which assumed tight integration of a given payload with its satellite bus. We have designed our transfer vehicles for modularity and ease of integration with customer payloads, ~~and~~ with a full suite of capabilities that our customers will need on orbit. Under our ~~Hosted Payload~~hosted payload model, ~~our vehicle,~~ after transporting a customer payload to a specific orbit our vehicle would stay connected to the payload for the duration of its mission to provide continuous power, orbit maintenance, orientation, and communications to support telemetry, commanding, and downlinking of payload data. 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

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future vehicles with robotic arms and the ability to maneuver in close proximity to other spacecraft and dock or berth with them. Once fully developed, we believe these capabilities could allow us to offer a suite of different in-orbit services, such as inspection, refueling, life extension, re-positioning, salvage missions, maintenance and repair, and de-orbiting.

Satellite Bus. We are offering a modified version of the Vigoride OSV for use as a satellite bus for commercial and government customers. With modification, the Vigoride OSV offers significant capabilities that support the missions of these commercial and government customers.

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.~~below.

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~~We have ~~entered into launch services agreements with SpaceX that secure~~secured space for one additional Vigoride test and demonstration missions on ~~launch vehicles~~launches that SpaceX ~~currently targets operating~~plans to conduct 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

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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,~~as early as 2025, we ~~plan~~aim 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.~~market. 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~~receipt and the timing of such 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;

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•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;~~OSVs;

•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,~~space transportation, hosted payload, and ~~In-Orbit Servicing.~~in-orbit servicing. To accomplish this, we currently intend to:

Develop our commercial program for in-space transportation. We conducted our inaugural test and demonstration mission with Vigoride in 2022 and began our ~~Vigoride vehicle (Vigoride 3)~~second and third tests and demonstration missions in ~~May 2022.~~January and April 2023, respectively. We ~~currently~~ plan to ~~fly our second~~conduct one additional test and demonstration mission with Vigoride ~~vehicle on a SpaceX Transporter flight as early as November 2022.~~during 2023. 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~~Table of ~~our satellite vehicles and related technology,”~~ Contents~~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~~hosted payload. ~~If in the future our vehicles~~We are ~~operationalized for their intended in-space transport uses, we plan to develop~~developing 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~~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, were and are intended to be demonstration missions. The primary goals of our planned demonstration missions are to test Vigoride onin 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

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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,~~March 31, 2023, we had collected approximately ~~$1.7~~$3.2 million in customer deposits related to future launches. ~~While our standard contracts do not contain~~There were no 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~~three months ended ~~December~~March 31, ~~2021 due to cancelled launches for 2021 in order to foster future business relationships~~2023 and ~~customer goodwill.~~2022.

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~~$33 million in backlog (potential revenue), as of ~~July~~March 31, ~~2022.~~2023. These agreements ~~contain~~include firm orders as well as options, ~~allowing~~which allow customers to opt-in to launches on shorter notice without requiring a separate agreement. The breadth of these signed contracts spans across 2219 companies in 1613 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~~March 31, ~~2022,~~2023, approximately ~~70%~~86% 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.

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 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.~~

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 backRecent Developments

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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~~February 2023 Securities Purchase Agreement

On February ~~22, 2021,~~27, 2023, Momentus sold an aggregate of 9,396,000 shares of Common Stock at a purchase price of $0.8646 per share, pre-funded warrants to purchase an aggregate of 2,170,043 shares of Common Stock at a purchase price of $0.8646 per pre-funded warrant less the exercise price of $0.00001 per pre-funded warrant, and warrants to purchase 11,566,043 shares of Common Stock to an institutional investor. The aggregate gross proceeds of this offering, before the deduction of fees and expenses, was approximately $10.00 million. We used all of the net proceeds from this offering to satisfy certain stock repurchase obligations of 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. Priorfrom prior to the Business ~~Combination,~~Combination.

Organizational Changes

On November 28, 2022, Jikun Kim, 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.

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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)Chief Financial Officer of the Company, ~~were granted~~tendered his resignation effective January 6, 2023. On January 3, 2023, the Board of Directors appointed Dennis Mahoney as the Interim Chief Financial Officer and principal accounting officer of the Company, effective as of January 7, 2023. Then on April 5, 2023, the Board of Directors appointed Eric Williams as the permanent Chief Financial Officer and principal accounting officer of the Company.

At-The-Market Offering

On September 28, 2022, Momentus entered into ATM Sales Agreement. Pursuant to the ~~lender exercisable~~ATM Sales Agreement, the Company may from time to time sell, through the sales agent using ATM offerings, shares of Common Stock up to an aggregate offer price of $50.0 million. Under the ATM Sales Agreement, the sales agent will be entitled to compensation at ~~the lender’s option. 80%~~a commission rate of up to 3.0% of the ~~1% of~~gross sales price per share sold.

During the ~~warrants~~three months ended March 31, 2023, there were ~~earned by~~no sales under the lender upon execution of the agreement. The additional 20% of the warrants was forfeited as of June 30, 2021. On August 12, 2021 the lender exercised the warrant; see Note 11 for discussion on the valuation and conversion of the warrants.ATM Sales Agreement.

~~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~~The Company ~~had~~has incurred legal expenses ~~of approximately $8.8 million~~ related to these ~~matters.~~matters of approximately $0.1 million and $0.8 million during the three months ended March 31, 2023 and 2022, respectively.

~~SEC Settlement~~NSA

~~On July 13,~~In February 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 the CFIUS for review of the historical ~~acquisitions~~acquisition of interests in ~~Momentus~~the Company 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’~~the Company’s foreign ownership and control. On June 8, 2021, the ~~Company entered into a National Security Agreement with~~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)~~, and~~ entered into the National Security Agreement with the U.S. government, represented by the ~~DoD~~U.S. Departments of Defense 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 and Stock Repurchase Agreements

In accordance with the NSA and pursuant to ~~certain Repurchase Agreements~~stock repurchase agreements entered into with the Company, effective as of June 8, 2021, each of Mr. Kokorich, Nortrone Finance S.A. and Brainyspace LLC (collectively ~~“ the~~“the Co-Founders”) ~~sold~~agreed to sell 100% of their respective equity interests in the Company on June 30, 2021. ~~In exchange for their equity interests, the~~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,~~$40 million to the Co-Founders ~~on a pro rata basis, as follows: (i)~~following the Business Combination, and an additional payment of an aggregate of ~~$40,000,000 to be paid out of funds legally available therefor,~~$10 million was payable within 10 business days after ~~the earlier of (A) a~~cumulative business combination or capital raising ~~transaction or series of~~ transactions (whether in the form of debt or equity) ~~resulting~~resulted in cash proceeds to the Company of no less than ~~$100,000,000 and (B)~~$250 million.

On February 27, 2023 the Company raised aggregate gross proceeds of $10.0 million through the sale of securities (see Note 9 for additional information), which together with the Business Combination ~~(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~~other capital raising ~~transaction or series of transactions (whether in~~activities triggered 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~~payment of the ~~First Payment Date).~~

~~As a result of the Business Combination, which generated $247.3~~$10.0 million ~~of gross proceeds (as described in Note 3), the Company paid the Co-Founders $40.0 million in addition~~liability 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

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~~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.~~

Ifterms of the ~~Company were to undertake a business combination or capital raising transaction or series of transactions (whether in~~stock repurchase agreements. The amount was paid during 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 (see Note 11).~~

~~The Company evaluated and periodically re-evaluates this potential consideration~~three months ended March 31, 2023, had previously been recorded 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 within the condensed consolidated statements of stockholders’ equity as of ~~June 30,~~December 31, 2022.

~~The payment came from proceeds~~

Table 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.~~Contents

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.

~~On May 4, 2022,~~During the three months ended March 31, 2023, the Company ~~received a favorable determination from the Federal Aviation Administration (the “FAA”)~~recognized $22,000 of ~~its application~~revenue, due to forfeited customer deposits upon contract termination 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”).

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 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.

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~~On May 28, 2022, Momentus was able to deploy two customer satellites~~late payment. Revenue from Vigoride ~~(of nine total customer satellites onboard~~5 and 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 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.

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 future6 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~~recognized upon completion 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.~~

~~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 within current contract liabilities.obligations.

As of ~~June 30, 2022~~March 31, 2023 we have signed contracts with customers and have collected approximately ~~$1.7~~$3.2 million in customer deposits, which are recorded as non-current contract liabilities in our condensed consolidated balance sheets.

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 (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~~service vehicle and third-party launch costs. Until the orbital ~~transfer~~service vehicle design is completed and released for production, the cost of these orbital ~~transfer~~service vehicles is being expensed as research and development costs as materials and services are received. The current design and technology allow for a single use of the orbital ~~transfer~~service vehicle.

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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.

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,~~March 31, 2023, 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 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.

Change in Fair Value of Warrant Liability

Changes in the fair value of warrants consists of changes in the estimated fair value of our warrant liability.

Interest Income

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

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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~~Income (Expense)

Other ~~income/expense~~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.~~other immaterial items.

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.

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Results of Operations

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

Comparison of Financial Results for the Three Months Ended ~~June 30,~~March 31, 2023 and 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 %)


	Three Months Ended March 31,
(in thousands)	2023		2022		$ Change		% Change
Service revenue	$	22	$	—	$	22	100%

Gross profit	22		—		22		100%

Operating expenses:
Research and development expenses	10,119		9,971		148		1	%
Selling, general and administrative expenses	10,270		14,853		(4,583)		(31	%)
Operating loss	(20,367)		(24,824)		4,457		(18	%)

Other income (expense):

Change in fair value of warrant liability	(112)		(451)		339		(75	%)
Realized loss on disposal of asset	—		(70)		70		(100	%)
Interest income	555		—		555		100%
Interest expense	(920)		(1,492)		572		(38	%)

Litigation settlement, net	—		3		(3)		(100	%)
Other income	19		—		19		100%


Net loss	$	(20,825)	$	(26,834)	6,009		(22	%)

Service revenue

~~The~~Revenue recognized during the three months ended March 31, 2023 was composed of $22,000 due to forfeited customer deposits upon contract termination for late payment.

There was no revenue recognized during the three months ended ~~June 30, 2022 was due to the Company’s first launch in May~~March 31, 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~~increased from ~~$20.8~~$10.0 million in the three months ended ~~June 30, 2021~~March 31, 2022 to ~~$10.9~~$10.1 million in the three months ended ~~June 30, 2022.~~March 31, 2023. The ~~decrease~~increase was primarily due to ~~a one-time impairment of $8.7~~increased subcontracted research and development costs which increased by $0.7 million ~~of prepaid launch deposits in the prior year, offset by $0.6~~and $0.5 million of launch costs for Vigoride 5 amortized during the three months ended ~~June 30, 2022. Spending~~March 31, 2023. These increases were offset by decreased 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$1.0 million.

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Selling, general and administrative expenses

Selling, general and administrative expenses ~~increased~~decreased from ~~$9.7~~$14.9 million in the three months ended ~~June 30, 2021~~March 31, 2022 to ~~$12.9~~$10.3 million in the three months ended ~~June 30, 2022. Payroll costs increased~~March 31, 2023. SEC compliance spending decreased by ~~$0.9~~$2.1 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~~decreased by ~~a reduction of $1.8~~$1.2 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~~Non-stock based compensation payroll decreased by $0.4 million due to prior year one-time bonuses and executive departures temporarily replaced by consultants, and stock based compensation decreased by $0.6 million ~~during~~due to executive turnover. Insurance and other general corporate costs decreased by $0.3 million.

Change in fair value of warrant liability

For both 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 480March 31, 2023 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~~increase 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.~~9 for additional information.

Realized loss on disposal of asset

The decrease in realized loss on disposal of asset for the three months ended March 31, 2023 was due to disposals of furniture and equipment related to the end of three minor leases during the three months ended March 31, 2022, compared to no loss on disposals during the three months ended March 31, 2023.

Interest ~~expense~~Income

Interest ~~expense of $3.4~~income increased from an immaterial amount for three months ended March 31, 2022 to $0.6 million for the three months ended ~~June 30, 2021 relates~~March 31, 2023 as the Company invested more in money market funds in response to rising interest rates.

Interest expense

Interest expense decreased from $1.5 million of cash and amortization interest ~~under~~for the ~~original one year term~~three months ended March 31, 2022 to $0.9 million of cash and amortization interest for the ~~Term Loan. During January 2022,~~three months ended March 31, 2023 due to the ~~Company exercised its option to extend repayment of the loan, resulting in a decrease~~application of the effective interest ~~rate and lower~~method which results in less cash and amortization interest as the Term Loan approaches maturity.

Litigation settlement, net

Litigation settlements for the three months ended March 31, 2023 and 2022, were immaterial.

Other income

Other income for the three months ended March 31, 2023 and 2022, was immaterial.

Liquidity and Capital Resources

Going Concern

The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. To date, the Company has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally. The Company incurred a net loss of ~~$1.4~~$20.8 million for the three months ended ~~June 30, 2022. See Note 10.~~

~~SEC Settlement~~

~~SEC settlement expense~~March 31, 2023 and had an accumulated deficit of $325.0 million as of March 31, 2023. Additionally, the Company used net cash of $18.7 million to fund its operating activities for the three months ended ~~June 30, 2021 relates~~March 31, 2023, and had cash and cash equivalents of $38.6 million as of March 31, 2023.

At each reporting period, the Company’s management evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a ~~civil penalty~~going concern within twelve months after the date that the financial statements are issued. The evaluation entails analyzing prospective operating budgets and forecasts for expectations of ~~$7.0 million, $2 million of which was paid~~the Company’s cash needs and comparing those needs to the ~~SEC immediately~~current cash and ~~$5 million of which is payable within one year~~cash equivalent balances.

In connection with the preparation of the ~~settlement order, in July 2022. The Company paid~~condensed consolidated financial statements for the ~~remaining $5 million liability on July 8, 2022.~~

~~Other income (expense)~~

~~Other expense~~quarterly period ended March 31, 2023, management conducted such an evaluation and concluded there were conditions and events, considered in the ~~three~~aggregate, which raised substantial doubt as to the Company’s ability to continue as a going concern within twelve months ~~ended June 30, 2022 and 2021 was immaterial.~~after the date of the issuance of such financial statements. However, through

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~~Comparison~~management’s evaluation of ~~Financial Results for~~our strategic business plan, management identified conditions and events that it believes mitigate and alleviate the ~~Six Months Ended June 30, 2022~~substantial doubt about the Company’s ability to continue as a going concern.

Going forward, management expects to continue driving bookings 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 growth, implement a plan management has developed to further reduce our operating expenses, and resolve certain outstanding legal matters. However, there can be no assurance that we will be able to achieve these plans, or that these plans will be successful in permitting the Company to continue as a going concern while the Company pursues additional capital to finance its operations.

The ~~revenue recognized during~~accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations and the ~~six months ended June 30, 2022 was due to~~realization of assets and the ~~Company’s first launch~~settlement of liabilities in ~~May 2022. This revenue was recognized as~~ the normal course of business. The accompanying financial statements do not reflect any adjustments that might 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,if 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~~is unable 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.

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~~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~~continue 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.going concern.

~~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

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	Three Months Ended March 31,
(in thousands)	2023		2022
Net cash used in
Operating activities	$	(18,696)	$	(23,062)
Investing activities	(52)		(521)
Financing activities	(3,793)		(938)
Net change in cash and cash equivalents	$	(22,541)	$	(24,521)

Operating Activities

Net cash used in operating activities for the ~~six~~three months ended ~~June 30,~~March 31, 2023 was $18.7 million, driven primarily by headcount costs, research and development activities, legal expenses, and professional fees, as well as net cash changes in operating assets and liabilities. Headcount related payroll costs, excluding accrued bonus of $0.9 million and stock-based compensation of $1.7 million, were $5.5 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $3.6 million. Professional fees of $4.9 million included $0.6 million of costs related to the SEC and NSA topics discussed in Note 12 and legal fees of $2.4 million. Office overheads, other general corporate expenses, and cash interest were $2.5 million which includes insurance costs of $0.8 million. The Company incurred launch costs of $0.5 million during the three months ended March 31, 2023 that were amortized in connection with its first launch. The Company additionally had change in cash from changes in operating assets and liabilities of $1.6 million.

Net cash used in operating activities for the three months ended March 31, 2022 was ~~$45.9~~$23.1 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~~$9.3 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$3.9 million. Legal fees, related to the SEC and CFIUS review topics, discussed in Note 12, were ~~$8.7~~$2.5 million. Professional fees for recruiting, accounting and audit, and other services were ~~$2.4~~$5.8 million. Office overheads, other general corporate expenses, and cash interest were ~~$4.5~~$4.0 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~~$2.4 million.

Investing Activities

Net cash used in investing activities was ~~$0.9~~$0.1 million and ~~$2.2~~$0.5 million for the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, which consisted primarily of purchases of machinery and equipment, and build-outs in our ~~facility, and capitalized implementation costs for cloud computing software.~~facility.

Financing Activities

Net cash used in financing activities was ~~$(3.3)~~$3.8 million for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, primarily due to ~~the first four months of~~ principal repayment under the Term Loan.

Net cash ~~provided by~~used in financing activities was ~~$55.7~~$0.9 million for the ~~six~~three months ended ~~June 30, 2021, consisting of proceeds from the issuance of SAFE notes and~~March 31, 2022, due to principal repayment under the Term ~~Loan.~~Loan, which did not commence until March of 2022.

Funding Requirements

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We expect our ~~expenses~~cash consumption to ~~increase substantially~~continue 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.

Specifically, our operating expenses will ~~increase~~continue as we:

•~~scale up~~continue to build and refine 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~~actively manage our workforce, including hiring additional personnel;

•implement measures required under the NSA and continue to implement measures required under the NSA and seek to comply with the ~~NSA’s~~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

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and development expenses and capital expenditures beyond the next 12 months. Additionally, we believe that the payments in the 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 orbit operation of our vehicles have unpredictable costs and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control, that may 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~~strategic business plan alleviates the substantial doubt about the Company’s ability to ~~sustain our operations for~~continue as a ~~period of time,~~going concern, 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.

Some of these risks and uncertainties are described in more detail under Part II, Item 1A: "Risk Factors," in this Form 10-Q under the heading “Risk Factors — We may not be able to continue as a going concern.”

Commitments and Contingencies

We are a 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 7.6.

We have principal of ~~$21.2~~$12.2 million outstanding under the Term Loan. Refer to Note ~~10.~~8.

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~~As a result of the ~~civil penalty is due one year after~~settlement of the ~~settlement.~~Amended Complaint, we recorded a litigation settlement contingency of $8.5 million. Refer to Note ~~12.As a subsequent event, the Company paid the remaining $5 million liability on July 8, 2022. See Note 14.~~12.

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

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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. Refer to Note 11.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated 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

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expenses and related disclosures. Our actual results may differ from these estimates under different assumptions and conditions. In addition to our critical accounting policies below, see Note 2 in the notes to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

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 recognize revenue (along with any other fees that have been paid) at a point in time, upon satisfaction of the Company’s performance obligation. For transportation services, the performance obligation is satisfied when the customer is delivered to their designated orbit.

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 Company estimates variable consideration at the ~~customer and typically do not contain variable consideration. However,~~most likely amount, which is included in the ~~full~~ transaction price to the extent it is ~~collected in advance~~probable that a significant reversal of ~~the scheduled launch and all fees that are paid are non-refundable (and are~~cumulative revenue recognized will 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.~~occur. While the Company’s standard contracts do not contain refund or recourse provisions that enable its customers to recover any non-refundable fees that have been paid, the Company may issue full or partial refunds, or concessions on future services to customers on a case-by-case basis as necessary to preserve and foster future business relationships and customer goodwill. As a result of the 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 to customers during the year ended December 31, 2021.

Our launch 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).

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.

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~~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~~third-party providers that will carry the orbital ~~transfer~~service 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.

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”).

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

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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.

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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 condensed consolidated 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 condensed consolidated 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.

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

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

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

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deemed to meet the “more likely than not” threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized.

Recent Accounting Pronouncements

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

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

ITEM 3. ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~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, 2022,~~March 31, 2023, we had cash and cash equivalents of ~~$109.1~~$38.6 million, which are primarily invested in highly liquid investments purchased with a remaining maturity of three months or less. However, due to the short-term maturities and the low-risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our cash and cash equivalents.

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

Foreign Currency Risk

There were no material foreign currency transactions for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022. Currently, a significant portion of our cash receipts and expenses are generated in U.S. dollars.

ITEM 4. ~~INTERNAL CONTROL OVER FINANCIAL REPORTING~~Internal Control Over Financial Reporting

Evaluation of Disclosure Controls and Procedures

The Company’s internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with ~~generally accepted accounting principles.~~GAAP.

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 are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~June 30, 2022.~~March 31, 2023. 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 reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended ~~June 30, 2022~~March 31, 2023 which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. Other Information

ITEM 1. Legal Proceedings

See the disclosures under the caption “Legal Proceedings” in Note 12 in the notes to our condensed consolidated financial statements included elsewhere in this Form 10-Q for disclosures related to our legal proceedings, which disclosures are incorporated herein by reference.

ITEM 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in “Risk Factors” in our most recent Annual Report on Form 10-K filed by the Company on March ~~9, 2022,~~8, 2023, which could materially affect our business, financial condition or future results. Except as set forth below, we do not believe that there have been any material changes to the risk factors disclosed in our Annual Report on Form 10-K filed by the Company on March ~~9, 2022.~~8, 2023. The risks described below and in our Annual Report on Form 10-K filed by the Company on March ~~9, 2022,~~8, 2023, 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 vehicle. Since that time, the Vigoride spacecraft has deployed four additional customer satellites, and we continue our efforts to deploy other customer satellites but havemay 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 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~~continue as a going concern.

The accompanying financial statements have been prepared on a going concern basis of accounting 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~~assumes that we ~~plan~~will continue as a going concern, and do not reflect any adjustments that might result if the Company is unable to ~~flight-demonstrate on future missions. We plan~~continue as a going concern. The Company’s ability to ~~offer LEO transfer services to customers in the future, based in part~~continue as a going concern is dependent 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’sCompany’s ability to generate ~~a measured orbit change in space,~~revenues and raise capital. To date, the Company has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally.

In connection with an evaluation conducted by the Company’s management during the preparation of this report, management concluded that there were conditions and events which ~~is crucial~~raised substantial doubt as to ~~our~~the Company’s ability to ~~maneuver objects~~continue as a going concern within twelve months after the date of the issuance of the financial statements included in ~~space. Moreover, even if the unit generates thrust,~~this report. While management has identified conditions and events that it believes will mitigate and alleviate this conclusion, there can be no assurance that ~~other systems and subsystems can~~such conditions or events will materialize, or that they will be ~~operated in~~sufficient to enable the Company to continue as a ~~manner that is sufficiently reliable and efficient~~going concern.

The uncertainty regarding our ability 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~~continue as ~~we continue to develop and improve the system~~a going concern could materially adversely affect our share price and our ~~other systems.~~

~~While we are conducting an analysis of~~ability to service our indebtedness, raise new capital or enter into commercial transactions. To address these matters, the ~~root causes of the anomalies experienced by Vigoride on its inaugural mission (Vigoride 3), there can be no assurance~~Company may take actions that ~~we will not experience operational or process failures~~materially 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~~adversely affect our business, ~~financial condition~~including significant reductions in research, development, administrative and ~~results~~commercial activities, reduction of ~~operation.~~

~~We may not receive all required governmental licenses~~our employee base, 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 FAAultimately curtailing or ceasing operations, any 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 ofmaterially adversely affect 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 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.share price.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~None.~~During the three months ended March 31, 2023, we issued 135,000 shares to a third party consulting firm in exchange for public relations services. The issuances of such shares were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) or the rules and regulations promulgated there under.

ITEM 3. Defaults Upon Senior Securities.

None.

ITEM 4. Mine Safety Disclosures.

None.

ITEM 5. Other Information.

~~None.~~On May 8, 2023, the Board of Directors of the Company adopted an amendment (the “Second Amendment”) to the Company’s 2022 Inducement Equity Plan (the “Inducement Plan”) to increase the number of shares of Common Stock available for issuance under the Inducement Plan from 7,000,000 shares of Common Stock to 8,000,000 shares of Common Stock. In accordance with Nasdaq Listing Rule 5635(c)(4), the Company did not seek approval of the Second Amendment by its stockholders. Other than the increase in shares, all other terms of the Inducement Plan, as amended, remained the same.

Awards under the Inducement Plan may only be made to individuals not previously employees or directors of the Company, or who are returning to employment following a bona fide period of non-employment with the Company, in each case as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

~~Item~~ITEM 6. Exhibits and Financial Statement Schedules


Exhibit Number						Description of Exhibit
1.1						Placement Agency Agreement, dated as of February 23, 2023, by and between the Company and Stifel, Nicolaus & Company, Incorporated (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed on February 23, 2023).
2.1†						Agreement and Plan of Merger, dated as of 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 Exhibit ~~2.1~~10.2 to the Company’s Current Report on Form 8-K filed on October 7, 2020).
2.2						Amendment No. 1 to Agreement and Plan of Merger, dated March 5, 2021, 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 Exhibit 2.2 to the Company’s Registration Statement on Form S-4 (Registration No. 333-249787) filed on March 8, 2021).
2.3						Amendment No. 2 to Agreement and Plan of Merger, dated as of April 6, 2021, 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 Exhibit 2.3 to the Company’s Registration Statement on Form S-4 (Registration No. 333-249787) filed on June 29, 2021).
2.4						Amendment No. 3 to Agreement and Plan of Merger, dated as of June 29, 2021, 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 Exhibit 2.4 to the Company’s Registration Statement on Form S-4 (Registration No. 333-249787) filed on June 29, 2021).
4.1						Form of Pre-Funded Warrant (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed on February 23, 2023).
4.2						Form of Warrant (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed on February 23, 2023).
10.1†						Form of Securities Purchase Agreement (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed on February 23, 2023).
10.2#						First Amendment to Momentus Inc. 2022 Inducement Equity Plan (incorporated by reference to Exhibit 99.2 to the Company’s Registration Statement on Form S-8 filed on March 23, 2023).
10.3#						Employment Agreement, dated March 29, 2023, by and between Eric R. Williams and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 5, 2023).
10.4						Loan and Security Agreement, dated February 22, 2021, by and between the Company and Venture Lending & Leasing IX, Inc.
31.1*						Certification Pursuant to Rules 13a-14(a) and 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 Pursuant to Rules 13a-14(a) and 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 Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*						Inline XBRL Instance 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*						XBRL Taxonomy Extension Schema Document
101.CAL*						XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*						XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document
104*						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

__________

# Management contract or compensatory plan or arrangement

* Filed herewith

Tables of Contents

** Furnished herewith

†Certain of the exhibits and schedules to this Exhibit List have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

6047

Tables of Contents

SIGNATURES

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


MOMENTUS INC.

Date: ~~August~~May 11, ~~2022~~2023	By:	/s/ John Rood
	Name:	John Rood
	Title:	Chief Executive Officer (Principal Executive Officer)

Date: ~~August~~May 11, ~~2022~~2023	By:	/s/ ~~Jikun Kim~~Eric Williams
	Name:	~~Jikun Kim~~Eric Williams
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

6148


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

3901 N. First Street San Jose, California			95134
(Address of Principal Executive Offices)			(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock	MNTS	The Nasdaq Capital Market LLC
Warrants	MNTSW	The Nasdaq 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 - Financial Information			5
Item 1. Unaudited Condensed Consolidated Financial Statements			5
Condensed Consolidated Balance Sheets			5
Condensed Consolidated Statements of Operations			6
Condensed Consolidated Statements of Stockholders’ Equity ~~(Deficit)~~			7
Condensed Consolidated Statements of Cash Flows			8
Notes to the Condensed Consolidated Financial Statements			9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			3631
Item 3. Quantitative and Qualitative Disclosures About Market Risk			5643
Item 4. Controls and Procedures			5644
Part II - Other Information			5745
Item 1. Legal Proceedings			5745
Item 1A. Risk Factors			5745
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			6045
Item 3. Defaults Upon Senior Securities			6045
Item 4. Mine Safety Disclosures			6045
Item 5. Other Information			6045
Item 6. Exhibits			6046
Signatures			6148


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(unaudited)					(unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	109,052	$	160,036	Cash and cash equivalents	$	38,630	$	61,094
Restricted cash, current	Restricted cash, current	1,005		197		Restricted cash, current	879		1,007

Insurance receivable						Insurance receivable	4,000		4,000
Prepaids and other current assets	Prepaids and other current assets	7,517		9,431		Prepaids and other current assets	9,524		10,173
Total current assets	Total current assets	117,574		169,664		Total current assets	53,033		76,274
Property, machinery and equipment, net	Property, machinery and equipment, net	4,514		4,829		Property, machinery and equipment, net	3,844		4,016
Intangible assets, net	Intangible assets, net	720		349		Intangible assets, net	340		337
Operating right of use asset		6,991		7,604

Operating right-of-use asset						Operating right-of-use asset	6,174		6,441
Deferred offering costs						Deferred offering costs	418		331
Restricted cash, non-current	Restricted cash, non-current	325		314		Restricted cash, non-current	363		312
Other non-current assets	Other non-current assets	3,650		3,065		Other non-current assets	4,670		4,712
Total assets	Total assets	$	133,774	$	185,825	Total assets	$	68,842	$	92,423

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	Accounts payable	$	1,124	$	1,911	Accounts payable	$	2,092	$	2,239
Accrued expenses	Accrued expenses	7,031		9,785		Accrued expenses	6,496		8,026
Loan payable, current	Loan payable, current	10,113		20,907		Loan payable, current	11,290		11,627
Contract liabilities, current	Contract liabilities, current	481		—		Contract liabilities, current	2,136		1,654
Operating lease liability, current	Operating lease liability, current	1,132		1,189		Operating lease liability, current	1,181		1,153
Share repurchase liability		5,780		—
Stock repurchase liability						Stock repurchase liability	—		10,000
Litigation settlement contingency						Litigation settlement contingency	8,500		8,500
Other current liabilities	Other current liabilities	5,043		5,075		Other current liabilities	36		27
Total current liabilities	Total current liabilities	30,704		38,867		Total current liabilities	31,731		43,226
Contract liabilities, non-current	Contract liabilities, non-current	1,206		1,554		Contract liabilities, non-current	1,026		1,026
Loan Payable, non-current	Loan Payable, non-current	8,544		—		Loan Payable, non-current	171		2,404
Warrant liability	Warrant liability	3,945		5,749		Warrant liability	676		564

Operating lease liability, non-current	Operating lease liability, non-current	6,716		7,284		Operating lease liability, non-current	5,821		6,131
Other non-current liabilities	Other non-current liabilities	454		483		Other non-current liabilities	471		465
Total non-current liabilities	Total non-current liabilities	20,865		15,070		Total non-current liabilities	8,165		10,590
Total liabilities	Total liabilities	51,569		53,937		Total liabilities	39,896		53,816
Commitments and Contingencies (Note 12)		0		0
Commitments and Contingencies (Note 12)						Commitments and Contingencies (Note 12)
Stockholders’ equity:	Stockholders’ equity:					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
Common stock, $0.00001 par value; 250,000,000 shares authorized and 94,984,332 issued and outstanding as of March 31, 2023; 250,000,000 shares authorized and 84,441,153 issued and outstanding as of December 31, 2022						Common stock, $0.00001 par value; 250,000,000 shares authorized and 94,984,332 issued and outstanding as of March 31, 2023; 250,000,000 shares authorized and 84,441,153 issued and outstanding as of December 31, 2022	1		1
Additional paid-in capital	Additional paid-in capital	340,593		340,570		Additional paid-in capital	353,897		342,733

Accumulated deficit	Accumulated deficit	(258,389)		(208,683)		Accumulated deficit	(324,952)		(304,127)
Total stockholders’ equity	Total stockholders’ equity	82,205		131,888		Total stockholders’ equity	28,946		38,607
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	133,774	$	185,825	Total liabilities and stockholders’ equity	$	68,842	$	92,423


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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Service revenue	$	50	$	—	$	50	$	130
Cost of revenue	12		—		12		48
Gross margin	38		—		38		82
Operating expenses:
Research and development expenses	10,896		20,794		20,867		30,700
Selling, general and administrative expenses	12,861		9,740		27,714		23,744
Total operating expenses	23,757		30,534		48,581		54,445
Loss from operations	(23,719)		(30,534)		(48,543)		(54,363)

Other income (expense):
Decrease in fair value of SAFE notes	—		100,803		—		182,367
Decrease in fair value of warrants	2,254		4,454		1,803		12,537
Realized gain (loss) on disposal of asset	1		—		(69)		—
Interest income	5		1		5		2
Interest expense	(1,413)		(3,389)		(2,905)		(4,357)
SEC settlement	—		(7,000)		—		(7,000)
Other income (expense)	—		(8)		3		(187)
Total other income (expense)	847		94,861		(1,163)		183,362
Income (loss) before income taxes	(22,872)		64,327		(49,706)		128,999
Income tax provision	—		1		—		1
Net (loss) income	$	(22,872)	$	64,327	$	(49,706)	$	128,998
Net (loss) income per share, basic	$	(0.28)	$	1.25	$	(0.62)	$	2.36
Net (loss) income per share, diluted	$	(0.28)	$	(0.59)	$	(0.62)	$	(0.90)
Weighted average shares outstanding, basic	81,319,533		51,474,305		80,642,670		54,620,299
Weighted average shares outstanding, diluted	81,319,533		69,653,223		80,642,670		72,847,925


	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)


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


(in thousands)	Level	Fair value as of December 31, 2022		Payment of Stock Repurchase Liability		Change in Fair Value		Fair value as of March 31, 2023
Warrant Liability	3	$	564	$	—	$	112	$	676
Stock Repurchase Liability	3	10,000		(10,000)		—		—

Total		$	10,564	$	(10,000)	$	112	$	676


Warrant term (years)	3.37
Volatility	93.00	%
Risk-free rate	3.74	%
Dividend yield	0.00	%


(in thousands)	(in thousands)	Gross Value		Accumulated Amortization		Net Value		Weighted average remaining amortization period (in years)	(in thousands)	Gross Value		Accumulated Amortization		Net Value		Weighted average remaining amortization period (in years)
Patents/Intellectual Property	Patents/Intellectual Property	$	450	$	(110)	$	340	7.2	Patents/Intellectual Property	$	477	$	(137)	$	340	6.7
Capitalized cloud implementation costs		450		(70)		380		2.6

Total	Total	$	900	$	(180)	$	720		Total	$	477	$	(137)	$	340


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


	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	%


(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


(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, 2022	2,556,733	$	1.21


Vested exercised	(370,287)	0.25
Forfeitures	(489,871)	1.96
Outstanding as of March 31, 2023	1,696,575	$	1.21	6.4	$	310
Exercisable as of March 31, 2023	1,134,048	$	0.90	5.4	$	257
Vested and expected to vest as of March 31, 2023	1,696,575	$	1.21	6.2	$	310


		Shares	Weighted Average Grant Date Fair Value (i.e. share price)			Shares	Weighted Average Grant Date Fair Value (i.e. share price)
Outstanding as of December 31, 2021		2,812,110	$	10.87
Outstanding as of December 31, 2022					Outstanding as of December 31, 2022	7,780,917	$	3.99
Granted	Granted	5,825,877	2.65		Granted	7,989,137	0.60
Vested	Vested	(276,520)	9.82		Vested	(766,791)	2.93
Forfeited	Forfeited	(928,933)	8.01		Forfeited	(1,433,570)	3.73
Outstanding as of June 30, 2022		7,432,534	$	4.80
Outstanding as of March 31, 2023					Outstanding as of March 31, 2023	13,569,693	$	2.08


(in thousands)
Remainder of 2023	$	39
2024	51
2025	51
2026	51
2027	51
Thereafter	98
Total	$	340


Warrant term (years)	5.51
Volatility	85.00	%
Risk-free rate	4.03	%
Dividend yield	0.00	%


	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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)		2023		2022
Research and development expenses	Research and development expenses	$	514	$	66	$	887	$	134	Research and development expenses		$	476	$	373
Selling, general and administrative expenses	Selling, general and administrative expenses	2,521		2,278		4,360		7,978		Selling, general and administrative expenses		1,244		1,839
Total	Total	$	3,035	$	2,344	$	5,247	$	8,112	Total		$	1,720	$	2,212


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)