Good afternoon, ladies and gentlemen, and welcome to the Momentus Inc. First Quarter 2022 Earnings Conference Call. [Operator Instructions]. It is now my pleasure to turn the floor over to your host, Darryl Genovesi, Vice President of Investor Relations. Darryl, the floor is yours.

Thank you, Tom, and good afternoon, everyone. Welcome to Momentus' First Quarter 2022 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 will take questions from analysts. [Operator Instructions]. 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 first 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 the forward-looking statements in this communication. You should listen to today's call with the understanding that our actual results may be materially different from the planned 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's 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 as 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 yet been fully tested or validated in the space. Our ability to execute on our business plan is dependent on the successful development and commercialization of our technology. Development of Space Technologies is extremely complex, time-consuming and expensive, and there can be no assurance that our predicted theoretical and ground-based results will translate into operational space vehicles that operate within the parameters we expect or at all. 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 today to talk to you about our first quarter and the progress that we've made since our last earnings call in early March of this year. We are on pace to complete our inaugural Vigoride demonstration flight this month. For that, I'd like to extend a heartfelt thank you to the entire Momentus team, which continues to drive progress toward our objective of providing the backbone infrastructure services to support the emerging space economy. I'll provide some high-level comments on our activities since our last earnings call and particularly our progress toward our inaugural launch, both during Q1 and since the quarter ended, as there has been so much progress in the last 6 weeks. I'll then spend some time discussing our plan for that launch. After I make my comments, our CFO, Jikun Kim will take you through the Q1 financial highlights. Turning to Slide 3. Overall, the team continues to make impressive progress on our technology as well as on the licensing and regulatory front. We've continued work to bring the Vigoride orbital transfer vehicle to market. During the first quarter, we completed system level thermal vacuum testing on the Vigoride 3 vehicle that we plan to fly in space on its inaugural mission this month. Thermal vacuum testing is late-stage environmental testing that closely simulates the environment that the vehicle will encounter in space. In April, Vigoride 3 completed system-level vibration testing. This test, which is the last of our major ground-based environmental test simulates the environment that Vigoride will encounter when onboard the SpaceX launch vehicle. 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. Following our thermal vacuum…

Thank you, John. Before I begin, thank you -- I would like to take the opportunity to thank Momentus team for their hard work and dedication as we progress towards our inaugural launch. Turning to Slide 11. Our first quarter results reflect our ongoing progress in investments toward the inaugural launch. We have cumulatively signed contracts for approximately $69 million in backlog or potential revenues as of April 30, 2022. These contracts include firm orders 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 25 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 resulting revenues will be less than the full value of backlog. We ended Q1 with nonrestricted cash and cash equivalents of $136 million and approximately $24 million in outstanding gross debt. We started making principal payments on our term loan in March. We invested approximately $25 million in cash during Q1. We expect our quarterly cash investment rate to increase as the year progresses driven by higher operational tempo, increased vehicle -- increased launch vehicle milestone payments as well as continued investments in NSA implementation, public company infrastructure and debt repayments. We did not recognize any revenue during the quarter. And as John said, we will begin to recognize revenue once we begin flying customers to space and fulfill our performance obligations. In the quarter, we generated approximately $25 million in losses from operations. On a non-GAAP basis, our adjusted EBITDA was a negative $17 million, which was approximately $1 million lower sequentially from Q4 2021. Please refer to the earnings press release issued today for the reconciliation of adjusted EBITDA to GAAP net income. Non-GAAP SG&A expenses for the quarter totaled approximately $8 million, approximately $1 million higher than the prior quarter. Non-GAAP R&D expenses for the quarter totaled approximately $9 million, unchanged from the prior quarter. We ended Q1 with approximately 81.8 million shares outstanding.

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

[Operator Instructions]. And the first question today is coming from Mike Maugeri from Wolfe Research.

John, you talked a bit about the first launch coming up, but I'm just wondering, how will you be measuring success on that first mission?

Well, thank you for the question. The Vigoride 3 mission that we plan to conduct later this month is a flight demonstration mission. Our objective is to test how well the Vigoride vehicle and its subsystems work in space. We will also deliver customers to orbit and generate a small amount of revenue. There are many systems on board, including communications, the propulsion system called the microwave electrothermal thruster, power systems like solar arrays, our reaction control system, avionics and other systems. While we rigorously tested the vehicle on the ground, there's really no substitute for actually flying the vehicle space and testing it there. So at a high level, the purpose of the mission is to demonstrate the performance of Vigoride, assess, and then we'll see where we need to make improvements. With this in mind, I will say we'll learn from both sides of the coin, seeing what works the way we expect as well as the other side of the coin where adjustments may be needed because things didn't work the way that we expected. We've defined key performance requirements that we'll aim to meet these tasks include communications, operation of the hardware and the software, the systems that -- subsystems that I mentioned earlier, like propulsion and of course, the deployment of the customer payloads. So again, in summation, the focus is on testing the vehicle, learning for many issues and then incorporating lessons learned on the future Vigoride vehicles.

Got it. And then following on that, your relationship with SpaceX, it appears healthy while some of your competitors that might not be the case to that degree. Is that something that you see as a competitive advantage or an opportunity for you guys?

We see it as a potential competitive advantage, and we do see it as an opportunity. We're very proud of our partnership with SpaceX. We appreciate the collaboration and consideration they have provided to us as we work through some of the legacy regulatory issues that the company had. Momentus is very pleased. I'm very pleased that we've overcome a number of challenges recently. And frankly, we know how hard that can be in a business. So while I wouldn't want to comment as to our competitors' relationship with SpaceX or their potential efforts to remedy their issues. I do know how hard that can be for customers and others to deal with that uncertainty. So frankly, we plan to be opportunistic during this period, and we'll be happy to accommodate and assist satellite operators who need a ride or whose plans may have been disrupted.

Your next question is coming from Robert Stallard from Vertical Research Partners.

A couple of questions for you. First of all, on the Vigoride 3, you've got your licenses in place now. Are there any ongoing licensing risks, though, for future missions?

We don't anticipate any issues given that we've recently and just recently been through these processes for the Vigoride 3 launch, and we received all the licenses and approvals that we needed for our upcoming mission from the FAA, FCC and NOAA. We really appreciate the collaboration shown by these government agencies. And we don't see any noteworthy risks going forward. In fact, we've been in discussions with the FCC for follow-on missions. For example, for Vigoride 3, we applied for and received a special temporary authority license. The FCC has since advised us they would like us to apply for a Part 25 conventional license for Vigoride 5, which we've already done. We don't anticipate needing to apply for an FAA payload determination or seek a modification to our NOAA license for our next mission. Of course, we'll do so if modifications are needed or mission requirements call for it. So we see this as a noteworthy area of progress for Momentus that we've overcome our challenges in this regard and secure the necessary licenses and approvals for our upcoming launch, and we don't anticipate any issues going forward for future missions.

Okay. And secondly, it's obviously been a very volatile 2022 so far in terms of macroeconomic issues and geopolitical risk. I was wondering if it's fed through in any way to the market demand for your services, be it on the commercial side or on the national security side.

We continue to see very solid customer interest in the type of capabilities that we would provide. We continue to feel good about how that service offering is aligning with the -- with a broader market trend and soon emerge in a new space economy. In our 10-K, for instance, you would see there's a number of third-party market forecasts that indicate the total addressable market for space transportation continues to grow rapidly. Once we've had the opportunity to fly Vigoride on orbit and demonstrate its capabilities, we are expecting to convert more customer interest to firm orders and backlog. I would say you're right about the broader macroeconomic conditions. Of course, concerns about inflation, the war in Ukraine and elsewhere, putting a damper on the broader market. But similar to our peers, we've seen some impact on our stock price. But in terms of operational capabilities and our work there, we're not seeing that impact. As a matter of fact, we feel like we've been relatively successful at navigating things like the supply chain challenges facing our industry and the others. I mean we do have some impacts of that. For example, one of the rooms in our facilities, lacking its doors right now because they're on a ship. I'm told off the coast that hasn't quite been unloaded yet and it's late. So there are supply chain impacts. But we haven't been able to -- we've been able to navigate those challenges in a way in our production of our vehicles where we've been able to maintain the schedule. And we're really focused. While there are some things outside our control like the inflationary pressures are certainly the Russian aggression in Ukraine. But I and my team, we're very focused on what we can control and improving the fundamentals in the business, and we think we're continuing to show improvements in overcoming our regulatory challenges and overcoming operational challenges to improve the capability and quality of the company.

Your next question is coming from David Strauss from Barclays.

You've got Brad Barton here on for David. Just quickly starting off. Now that you've got the company back on solid operational footing, is there anything you can say on the forward financial outlook?

Yes. Jikun Kim, our CFO, will take that.

Yes. Consistent with our stated strategy, our focus has been to bring bigger eye to market as early as possible, and with the features and reliability that we know that our customer needs. As we look at our inaugural launch, we're pleased with the success of our deliberate and disciplined approach as far, and we plan on continuing with this approach, making progress both operationally and financially. As we said on our prior earnings call, we have sufficient cash runway through the early part of 2023. These cash investments will secure future launches as well as future funds for Vigoride vehicles that will need to support these missions. We continue to make investments on the Vigoride vehicle to enhance its performance and reduce its operating costs. We expect customer order activity to pick up once we establish flight heritage, but it is customary for our customers to book our orders to 12-plus months out ahead of launch. So there will be some lag between the receiving of the orders to the recognizing of the revenues and ultimately, the profitability of the company.

Okay. And then I guess with sufficient cash to early 2023, how are you thinking about accessing the capital markets given how the stock has been performing recently?

Yes. So I mean, as John commented earlier, the capital markets have not been tied to anyone, right? But with that, we do have sufficient cash runway to the early part of '23. We are comfortable now with the capital that we have based on our destocking efforts and our ability to serve to support our near-term needs. But we will evaluate the right timing of our next capital market raise relative to the execution of the business plan.

And I would just add, we plan to assess the market conditions based on when we think that's the correct conditions, then we'll go to market and raise some additional capital. But we're feeling comfortable with where we're at, at the moment.

All right. And if I could just squeeze one more in on Transporter. I think you said last quarter, the schedule to get to Transporter-5 was pretty tight. Can you say anything about how you're looking for Transporter-6 in October?

Yes. As I mentioned, we are manifested on 4 follow-ons basics, Transporter rideshare missions beyond Transporter-5 starting with Transporter-6, which is scheduled. But there's Transporter-5 in October, then there's Transporter-6 scheduled for January of 2023. Transporter-7 in April of 2023 and Transporter-8 in October of 2023. So we're on 5, 6, 7 and 8 going forward. Similar to what I said last quarter, the schedule to prepare Vigoride 5 is tight. As I said last quarter, that we had a tight schedule to get Vigoride 3 finished and ready for launch. And our schedule for preparing Vigoride 5 for its planned launch in October is similarly tight. We're working very hard to meet that plan schedule. We expect the inaugural mission though will be a learning experience. And we're going to use what we learned in that Vigoride 3 flight scheduled for as early as this month. So it's a learn from it. And then as necessary, we'll assess its performance. And if we should find any anomalies or any performance that is not what we had expected, depending on the nature and significance of that activity, then this obviously could affect the schedule for future launches. And obviously, if we were to experience an issue that caused a launch delay, we would seek to fly again shortly thereafter. With the additional agreements we have with SpaceX through the end of 2023, we do have other launch slots available that we could utilize as necessary. So again, we're working hard, though, to make the schedule, but the schedule for launch of Vigoride 5 in October is tight.

Your next question is coming from Edison Yu from Deutsche Bank.

Congratulations on hitting on the milestones. First question, I think this was alluded to earlier, SpaceX had a really, shall we say, high profile, I think, breakup of a relationship with a competitor of yours. And I was wondering, have you seen any sort of pickup in business or increased activity since that occurred, just given you can obviously fly anymore on those rideshare missions. I would think that's a pretty substantial amount of business.

Well, thank you again for the question, Edison. We're -- as I mentioned earlier, we're very proud of the partnership that we've built with SpaceX. And they've been a strong partner to us. They've been collaborative, they've provided consideration where we needed it, and we thank them for that. I know from experience how difficult it can be to overcome the kind of challenges and business uncertainties that our competitors are facing. And as you know, SpaceX has been the primary space launch vehicle that they have used in others. And so certainly, I wouldn't want to comment on what, if anything, they are doing to address that issue. As for us, we do think we're a very attractive alternative. We -- now that we have overcome our regulatory issues and are poised for our first launch. And after we begin generating some flight heritage from that launch, we do expect orders to pick up and that this will be an opportunity for us to secure some additional customers. And so you -- well, I want to be cautious not to comment too much on our competitors and what their challenges are. Certainly, for us, we do want to be opportunistic in this period. And as I mentioned earlier, we would be quite happy to accommodate and assist any other satellite operator whose plans have been disrupted as a result of SpaceX decision with respect to our competitor.

Understood. Understood. And following up, I know you mentioned there's actually several customers slated to launch. Are you able to disclose any of these customers coming up? Or maybe talk about the kind of payloads that will be deployed?

Yes. On our Vigoride 3 mission that, again, is scheduled on Transporter-5 that -- SpaceX Transporter-5 mission scheduled for this month. We're going to have some paying customers on the flight. Our primary goal is just to reiterate -- to test Vigoride orbited since it's a flight demonstration mission. But we will release some customer satellites, 9 in total from Vigoride. And then we'll also test a piece of space hardware that another customer has provided. We have 3 customers on Vigoride, 2 of them, 1 is called FOSSA, F-O-S-S-A and a second customer is called Orbit NTNU from Norway. They're a university. And then we will also test some hardware, as I said, from another customer. There is a second port, as you recall, that Momentus had purchased on the Transporter-5 mission. On one port will be the Vigoride 3 vehicle. On the other port, a third-party deployer system has been successfully made it to that port with customer payloads, one of which is a Momentous customer. Cal Poly Pomona, who we are proud to fly and take to orbit on that mission. There are some other customers that our partner is also planning to fly. So in total, 5 satellites will be released from that third-party deployer system. Edison, as you recall, the use of that third-party deployer system is as part of the exploration that we have to look at other ways of doing business using rideshare aggregation and putting them on a lower cost, less capable system that still meets the needs that are less complex for some of these customers and some of the customers in our backlog and would give us a lower cost method of meeting their needs than Vigoride, which is more capable and able to take customers to precise customer orbits.

And there are no further questions in queue at this time. Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation. You may disconnect your phone lines at this time, and have a wonderful day.