Momentus Disclose Financial Turmoil Amid Mission Cancellation5th Feb 2024
Momentus Space has informed the US Securities and Exchange Commission that they are abandoning their upcoming Vigoride 7 mission. Reason being, they have “limited liquidity and cash balance” to support such projects.
Hopes of finding a financial saviour are quickly diminishing. As a result, Momentus were forced to notify all concerned of the decision to stand down their Vigoride 7 servicer that was supposed to launch onboard SpaceX’s Transporter 10 on 1st March.
In a statement to the SEC, Momentus said: “Starting on January 10, 2024, Momentus Inc. notified customers and certain regulatory agencies that the Company had changed its plans and did not plan to support the launch of their payloads. The notice was provided due to the Company’s inability to support continuing operations for the expected launch date.”
Concerns Around Liquidity
Momentus has outlined that their liquidity is currently sitting in an unstable position. They said: “The Company has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally”. Additionally, they also contended their financials and “operating results” have engendered uncertainty and concern regarding their “ability to continue”.
All hope is not lost however. Momentus affirmed they are working towards “managing its cash burn rate and extending its cash runway”. They are also attempting to procure new commercial space opportunities, as well as accumulating more funding. In spite of that, financial hardship has driven Momentus to reduce its staff by around 20%. As such, the move will: “reduce its cash burn rate while retaining the talent it needs to execute on its key near-term initiatives.”
Despite trying to find new revenue generating avenues, these streams are yet to materialise. Momentus said: “the company continues to pursue opportunities to raise additional capital to allow for its continuing operations and the execution of its business plan but does not have definitive commitments at this time. The Company’s ability to continue to fund operations for the next few weeks and months will be dependent on its ability to raise equity capital or engage in a strategic transaction.”
Losing An SDA Contract
Another issue that has plagued the company is the loss of a Space Development Agency contract. In the SEC submission, Momentus cited they failed to acquire a contract for 18 satellites that will join SDA’s Tranche 2 Tracking Layer constellation. They didn’t attribute the lost contract alone to their money woes. However, it appears they might have been reliant on securing the SDA contract to pull themselves out of their precarious financial position. Or, they may have lost the contract due to their inability to financially back their projects.
Currently, both possibilities remain. The only known information is: “On January 5, 2024, the Company was notified by the Space Development Agency (SDA) that the Company was not selected for funding for the Tranche 2 Tracking Layer.” It appears that Rocket Lab may have beaten Momentus, after they recently announced an award for 18 SDA satellites in March this year.
Stock Market Dip & Strategy For The Future
Momentus stock has seen a 30% drop in recent market reports – according to CNBC. However, they are currently strategizing options with commercial partners to find a way out of their financial turmoil.
In the SEC report, Momentus stated they have: “conducted discussions with multiple potential strategic partners over the past few months. [Momentus] continues to engage in discussions and attempts to position itself to be able to quickly capitalise on any potential opportunities with interested parties should they arise.”
However, Momentus didn’t shy away from the worst case scenario should their current position fail to improve. “Those discussions have not resulted in any definitive agreements. [And] if the Company is unable to raise sufficient capital to provide a bridge to full commercial production at a profit, the Company’s operations could be further curtailed or ceased,” they said.
Is There A Positive Way Forward?
There could be a light at the end of the tunnel. On 1st February, Momentus unveiled that SDA had awarded them a contract modification to continue development on their Vigoride Orbital Service Vehicle. The updated terms are worth nearly $1.2 million, which could be a sign of a brighter future ahead. Nonetheless, the contract may go the same way as their SpaceX launch and ultimately, time will tell.