Ladies and gentlemen, thank you for standing by. And welcome to Momentus Fourth Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to introduce your host for today's program Darryl Genovesi. Please go ahead.

Thank you, Jonathan and good afternoon, everyone. Welcome to Momentus’ fourth quarter 2021 earnings conference call. With me here today are John Rood, Chief Executive Officer of the Company and Chairman of its Board of Directors, as well as Jikun Kim, Chief Financial Officer. Each will provide prepared remarks. Following these prepared remarks, we’ll take questions from analysts. In the interest of time, we would ask that you limit yourself to one question and one brief follow-up. Earlier today, we issued a press release and made a slide presentation available on our Investor Relations website, which provides an overview of our business and financial highlights for the fourth quarter. You can download a copy of the release and presentation slides at investors.momentus.space. During today’s call we will make certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions, and as a result are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from forward-looking statements in this communication. You should listen to today's call with the understanding that your actual results may be materially different from the plans, intentions, and expectations disclosed in the forward-looking statements we make. For more information about factors that may cause actual results to materially differ from forward-looking statements, please refer to the earnings press release we issued today, as well as the Company filings with the Securities and Exchange Commission. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. Please also note that we will refer to certain non-GAAP financial information on today’s call. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in our earnings press release. None of these non-GAAP financial measures is a substitute for or superior to measures of financial performance prepared in accordance with GAAP. The technology underlying our anticipated service offerings is still in the process of being developed and has not been fully tested or validated in space. Our ability to execute on our business plan is dependent on the successful development and commercialization of our technologies. Development of space technologies is extremely complex time consuming and expenses, and there can be no assurance that our predicted theoretical and ground based results will translate into operational space vehicles that operate within the parameters we expect or at all. With that, I'd like to turn the call over to our Chairman and Chief Executive Officer, John Rood.

Thank you Darryl. Good afternoon. I'm delighted to be here with you today to talk about our fourth quarter and the progress that we've made since our last earnings call in early November. I'd like to start by thanking the team at Momentus, which continues to drive progress toward our objective of providing the backbone infrastructure services to support the emerging space economy that continues to experience impressive growth. I'll provide some high level comments on our progress since our last earnings call and then turn to our current areas of focus and discuss our outlook for 2022 and beyond. After I make my comments, our CFO Jikun Kim will take you through the Q4 financial highlights. Turning the slide three, to begin, I'd like to highlight some new developments from the past few months. Overall, we continue to make significant progress on our technology, which will be the foundation of our success as a company. First we've continued work to bring the Vigoride orbital transfer vehicle to market. We completed assembly and initial system level functional testing on the Vigoride three vehicle that we planned to fly on a demonstration mission later this year. Subsequent to the close of the fourth quarter, we completed system level thermal vacuum testing on Vigoride 3, which is light stage environmental testing that simulates the environment in space. Our testing sequence is designed to uncover issues on the ground where we can deal with them more readily and effectively than we could in space. Over the next few weeks, the team will be addressing issues that were uncovered during thermal vacuum testing. We continue to believe our Vigoride 3 is on path to complete ground tests and time for inaugural launch plan for June, although the schedule is tight. Last October, we signed…

Thank you, John. Before I discuss the fourth quarter financials, I would like to take this opportunity to thank the Momentous team for their hard work and dedication. Turning to Slide Six, our fourth quarter results reflect our ongoing progress in investment toward our inaugural launch. We have cumulatively signed contracts for approximately $67 million in backlog or potential revenue as of January 31, 2022. These contracts include firm motors as well as options. These options give our customers the flexibility to quickly opt into an available launch slot on short notice, without requiring a separate agreement. The breadth of these signed contracts span across 24 companies in 15 different countries. In general, our customers have the right to cancel their contracts with the understanding that they will forgo their deposits and milestone payments. If a customer cancels a contract before all of the payments are made, the result revenue will be less than the full value of the backlog. We ended 2021 with non-restricted cash and cash equivalent of $160 million and approximately $25 million in outstanding gross debt. We started making principle payments on this loan in March. We invested approximately $19 million in cash during Q4. We expect our quarterly cash investment rate to increase in 2022, driven by higher operational tempo, increased launch vehicle milestone payments as well as continued investments in MSA implementation and public company infrastructure. We did not recognize any revenue in the fourth quarter. We will start to recognize revenue once we begin flying our customers to space and fulfil our performance obligations. In the fourth quarter, we generated approximately $25 million in losses from operations. On a non-GAAP basis, the adjusted EBITDA was a negative $16.4 million in the fourth quarter, which was approximately $2 million lower than Q3 results. Please refer to the earnings press released issued today for the reconciliation of adjusted EBITDA to GAAP net income. Non-GAAP SG&A expenses for the fourth quarter, total $7.3 million, approximately $1.4 million higher than the prior quarter. These increases were driven by continued investments at NSA implementation and public company infrastructure investments. As a reminder, we became public in the middle of Q3 and Q4 investments with like the full quarter of being a public company. Non-GAAP R&D expenses for the fourth quarter totalled $9.4 million approximately $0.4 million higher than the prior quarters. We ended 2021 with approximately 81.2 million shares outstanding. Darryl?

In a moment, we will move to the question and answer portion of our call. However, I would first like to remind participants that all disclaimers outlined at the outset of this call also pertain to the question and answer session. This includes our disclaimers relating to non-GAAP financial information, forward looking statements and the technology underlying our service offerings. Jonathan, would you please remind participants how to enter the queue?

[Operator Instructions] Our first question comes in line of Edison Yu from Deutsche Bank, your question, please?

Hey, thanks. I have about three topics wanted to cover first. I think what most people are interested in is the progress on, on the NSA implementation. Is this something that could literally happen the next few weeks? What, what can you tell us about the potential timing of that?

Well, thank you Edison for the question. We're continuing to make significant progress on the regulatory front, and we're to completing the NSA implementation and get adding the necessary government licenses and approvals than we were on the last earnings call. Our NSA implementation has made significant progress. We're in regular contact with the defence department and the treasury department who oversee our NSA. It modernization is a particular focus for the, for these departments. As I mention, and on the last earnings call, the it modernization plan is a heavy lift for the company, but we've implemented the bulk of this modernization plan. Now after we've finished implementing the plan shortly, we will continue to update our it security to keep pace with the evolving threat. However we've also submitted an FCC application since the last earnings call and we're in dialogue with the FCC, the FCC licensing process, I would add includes an interagency review similar to the one that the FAA conducts. With the FAA we're in conversations with them as well. And we intend to get an FAA payload review later this year. So all in all, we're making good progress on in a implementation and other regulatory issues.

Thanks. Any, any way to sort of determine kind of by what time would you need to get this approved if you want to launch in June, is there any way to drill down that, that time period a little bit more in detail?

Sure. The limiting factors, if you will, for our launch in June is first we've got you complete the, the work ahead of us to prepare our vehicle for flight. And then on the regulatory side, we will need licenses from the FCC, FAA. We're going to apply for an FAA license called a payload review, and then there's a slight modification to our NOAA license that we need to perform. So we, we currently plan to, to fly our inaugural mission with VII in June of 2022 subject to the receipt of these licenses and government approvals and the completion of the work to get the system ready for flight. And so the submission of our application to the FCC last year started that process. And again, we're in conversations with them and then with the FAA, we've begun that dialogue as well and hope to obtain a, a payload review from them a little bit later this year, the NSA implementation is while not directly part of those per processes is of course, one of the considerations that those other regulatory bodies take into effect. And so we are making good progress on NSA implementation and our expectation is over the coming weeks that we're going to get to a much more advanced level of maturity, even though we've come a long distance in the implementation of that agreement thus far

Understood, understood separate topic. You booked several SpaceX transporter missions, law ports. And I'm wondering if you could maybe provide some more detail or some more context on the, the various incremental capacity that, that you've got. I understand part of that is a little bit of redundancy in case the June launch doesn't work. But is this are, are these ports, can you satisfy, can you execute on all these ports, but the backlog, or do you need to win new business to, to fill it up?

Well, we've, we've signed launch services agreements for ports on SpaceX transporter missions, which are rideshare missions, as for the remainder of 2022 and for the, the presently targeted SpaceX transporter missions in 2023. So really for the rest of this year, next year, we've reserved ports and we have a production schedule for Vigoride vehicles. Obviously that's intended to, to match that cadence of the launch services agreements. The initial inaugural mission of Vigoride three later this year is meant to be a demonstration mission. As I mentioned, we do plan to take customers on that mission and generate a small amount of revenue, but its principle objective is to demonstrate our technology and to learn from the experience and any issues we might encounter. We do have a follow on port and follow on plans for the October transporter mission. And so depending on where we stand after our first mission, will it if necessary adjust our plans, but otherwise we have follow-on vehicles. As I mentioned, that are in earlier state of production Vigoride five, which we would plan to fly in the fall and then additional block 2.2 vehicles that are planned for next year. And we do think our initial mission will provide an additional boost to our efforts to win follow on business and, and get there are more customers. And, and that's one of the things that will help us in that regard. And so we're looking forward to the future and, and again continue to put in the calories and the hard work to get our vehicles ready for flight and to address the regulatory matters so that we can continue to make good progress on that front.

Last one, for me something that's more high level obviously a lot going on in, in the space industry, as it pertains to Russia, Ukraine, have you seen any sort of impact either on the manifest and supply chain or, or just any sort of impact on, on, on your end?

Now, I haven't seen an impact from the Ukraine situation on our progress or our manifest or, or, or the business a couple points to add to that. The Russian founders of Momentus have been divested and have not been part of the company for a long time. Momentous has continued to make good progress in implementing our national security agreement. The, the tragic events unfolding in Ukraine are, are not related to the implementation of the NSA or, or obviously our business. I would add though that on a personal note, that during my government and past industry career, I visited Ukraine, including Kyiv and Crimea. I met with Ukrainian National Security Officials and all the defence department. I oversaw the U.S Security Assistance Program for Ukraine. It's just heart-breaking to see this Russian aggression play out, and I'm glad to see my government and allies around the world opposing this Russian aggression and assisting Ukrainians.

Great. Thank you.

Thank you. Our next question comes from the line of James Ratcliffe from Evercore ISI, your question, please?

Thanks for taking the question. Couple first of all, can you just give us an update on the status of the trust or development in particular and how the test process has gone and what version of the thrust do you plan to launch? Should you go up in, in June?

We've continued to make good progress on our technology for Vigoride? To include our microwave electrodermal thruster or MET. The our plan for the inaugural launch of Vigoride of Vigoride three targeted for June there, we use a current generation of our, our microwave electrodermal thruster. We've put that system along with the rest of the spacecraft through extensive ground testing, including completing the initial assembly and integration and, and system level integrated testing of that vehicle. As part of that, we fired the MET or microwave electrodermal thruster that we planned to fly figure I three for 10 minutes of duration, we have additional work on a next generation thruster that we have been doing in the past that's, that's progressed some distance, but that will, that will be incorporated on future designs.

Got it. Thank

You for the question, James?

Sure. Secondly, can you talk a little bit about the economics of the, the second port you're taking? Cause, so it sounds like you're essentially being a, a wholesaler there buying up port and then splitting up among smaller customers. And you talk about sort of what the economics of that and how significant you think that business can be going forward.

Sure. The approach of using rideshare aggregation at lower cost is something that we're exploring for future missions. And as mentioned, that's what we intend to use. The, the second port on the transporter, five mission targeted for June to do this is an opportunity for us to explore how we can meet the various needs of our customers and whether this could be an attractive component of our service offering going forward. Some of our customers need to be taken to precise orbits, and we plan to offer the last mile transportation services with our Vigoride vehicle. That's specifically designed for that. But in other cases, some customers don't need last mile delivery to a precise, or they just want to be dropped off in the launch vehicles or because their mission doesn't require a precision or plus it's cheaper. In this case vigor, it has more capability than what is needed in these simple drop-off missions. So we're exploring other ways to serve this market segment at lower costs. We think there's a potential to expand our total addressable market, perhaps quite meaningfully by partnering with one of our suppliers that has the requisite hardware. We're not certain whether this approach will be part of our long-term plans and what we're doing doesn't require any upfront investment to develop the hardware or introduce the service. So we've considered this approach since our customers often discuss this simpler service with us, as well as more complex precision orbit insertions that would require VII as we go forward, we'll determine whether this is part this part of the market provides sufficient growth and profitability opportunities for us to include it on a more permanent basis in our services.

Great. And so you say quantification for the pick in cash or essentially through, through the year and like what, what sort of magnitude we should be looking at for that?

Sure. Let me ask Jikun Kim, our CFO to address that question.

Sure. So I, I think in general, we stated last time on the earnings call that we should to have sufficient cash through to the, the earlier part of 2023. That's still the case. You can see from our earnings release that we burned roughly about seven and a half million dollars a month. Last year, we do expect that to increase in 2022. A lot of the couple of the key drivers are the operational tempo that we're increasing meaning that we're increasing the number of vehicles that we're building the material costs and we're actually increasing our staffing. And then we do have you can see that we've booked basically launches going out to 2023 and we'll have increased SpaceX Mazda payments for that. And then we do need to continue with the N MSA implementation as well as other Public Company infrastructure costs. And then lastly we have started paying down our principle on our debt and so those enhance, and so I think based on the data point where we ended up and, and how much runway we have, we should be able back into a number there from an absolute burn rate standpoint.

Great. Thank you.

Sure.

But your next question comes in the line of Colin Ken Fu from Barclays, your question, please?

Hey guys, thanks to question. Can you just update us on what your expectations are for positivity? I think in the back size it was 2023 was the timeframe, but if you could just provide us an update on that front?

Yeah. So we, we stopped giving long-term guidance here, but you can see that we, we are a little nascent and early to make those, those kind of long-term projections. So I will leave that at that.

Got it. And then if we think about the Starship pricing update this last, last month, I think Elon Musk said hundreds of dollars per kilogram versus the original $10 per kilogram cost contemplated in your spec. So with that in mind, can we just talk about what customer appetite looks like for In Vigoride last mile services versus maybe a dedicated small set launcher?

Well, the Starship pricing and the advent of larger launch vehicles like SpaceX is Starship means you're going to be carrying a much larger capacity to orbit. I mean, stepping back recall there are two mega trends affecting the industry that are that're fueling among the things that are fueling this real growth in the new space economy. Thing one, you do have launch vehicle costs, continuing to decline, and the number of providers growing. Secondly, you have another mega trend, which is satellites getting smaller and increasingly capable. So the two things together mean you're going to have very large vehicles taking larger volumes of smaller satellites to a single destination, but as you well know, the, the customers for that, the satellite companies as particularly if they have constellations, don't all want to be in a single drop off location, the alternative to an orbital transfer vehicle. Like what we intend to provide here at Momentus is to build in propulsions systems per satellite. If you have very small satellites and you're using a fair amount of your mass and value content for that we think a a space tug, if you will, a orbital transfer vehicle or space truck, as some people call it is going to be much more economical for that purpose, dedicated, smaller rockets that go to single orbits that are much smaller than Starship. We think also are not as competitive as the ability for an orbital transfer vehicle to work symbiotically with a large system like Starship that is reducing the cost per kilogram to go to orbit. And therefore is likely to generate a higher volume of smaller satellites going to orbit. Then our system for Vigoride and orbital transfer vehicle works very symbiotically with such a, a system. Now looking a little further forward, our initial plans are an expendable version of vigor right later around the middle of the decade. We plan to bring online a reusable version of Vigoride that makes the unit economics even more attractive because we would meet these cargo shipments in space, have the ability to reuse the system over time and refuel it with fuel that is carried back up to space to meet the space vehicle. And that will make it even more attractive to provide this sort of last mile delivery or, or in space infrastructure sort services that we envision providing.

Got it. Thanks. Thanks for calling.

Thank you. [Operator Instructions] Our next question comes to the line of Mike Maugeri from Wolfe Research, your question, please?

Everyone. Thanks for the time. So looks like your backlog came up by about $2 million sequentially during the quarter. So given that, can you talk a little bit about the order activity that you saw during the quarter?

Sure. So basically we recognized a 2 million increase quarter of quarter and backlog. This is really tied to a reversal of an impairment that we took last quarter. We had a early indications of a customer who potentially was interested in canceling one of their contracts. And so we adjusted our backlog down by $2 million in Q3. During Q4 our business development team turned this customer around and was able to maintain that contract and actually increase our backlog activity slightly. And so it came back up by $2 million, all in all we're able to, to retain a key customer and incrementally added business. Now, having said, that we are looking at a lot of opportunities, we are continuing to bid on a lot of opportunities. And so in general, the Leo market appears to be very active and very strong.

Got it. And then, I mean, just following on that, can you sort of get a little bit more specific about the sales pipeline that you're seeing and then to that once you're able to launch vior ride for the first time? I mean, what sort of, what sort of pickup do you expect to see in order activity? Once you're able to launch that?

On the pipeline we continue to see customer opportunities that we're bidding on. We continue to feel good about how our service offering is aligning with our customers plans to go to market in this new space economy in our 10K you'll see, there are a number of third party market forecast that indicate the total addressable market for space. Transportation is growing rapidly and will continue to do so. We do think that once we have the opportunity to fly vide on orbit and demonstrate our capabilities, we would expect to convert more of this customer interest to firm orders and backlog establishing flight heritage is something that we know is very attractive to potential customers and something we hear from customers. And so we do think that demonstrating our capabilities on orbit will lead to a pickup in new orders.

Great. Thanks a lot, guys.

Thank you. This does conclude the question and answer session. That ends our today's program. Thank you, ladies and gentlemen for participation. You may now disconnect good day.