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House firm Momentus MNTS begins after SPAC. with buying and selling on the Nasdaq
Artist's impression of a Momentus Vigoride transfer vehicle sending satellites in orbit.
Space company Momentus debuted on the Nasdaq on Friday, completing a turbulent nearly year-long merger process that resulted in a new CEO and the departure of its founders.
"In terms of value to investors, I think we are well positioned to meet some big market trends," Momentus CEO John Rood, who led the company on Aug. 1, told CNBC. "There is a need for what we offer."
Momentus stock lost 2.6% in trading to close at $ 10.68.
The company completed its merger with Stable Road Capital, an acquisition special-purpose vehicle, or SPAC, this week. A SPAC raises money from investors through an IPO and then uses the money to buy a private company and take it public.
Momentus' path to the public market has been fought on several fronts, with missions now being postponed until mid-2022 at the earliest. National security concerns over Russian co-founders, former CEOs Mikhail Kokorich and Lev Khasis, led both of them to sell their stake – in exchange for "about $ 40 million," Rood said – and leave the company.
Momentus' valuation was then cut in half, from $ 1.1 billion to $ 567 million. And then, last month, the firm and Stable Road settled the Securities and Exchange Commission's charges that the companies misled investors and falsified the results of a 2019 prototype test, paying about $ 8 million in civil fines.
The company expected to have $ 310 million on its books after the SPAC merger to grow, but the complications of the process reduced that cash to about $ 150 million "to fund our operations," Rood said .
"We think that gives us enough runway to do our extra development work, add staff and some of the other things we need to do," he said.
Rood described Momentus as an "early stage technology company" as it is now testing a new variant of its water-based plasma thrusters, known as an electrothermal microwave thruster. The company told CNBC that the longest single fire on any of these engines took 9.7 hours in a vacuum chamber during ground tests, "significantly longer than what we would expect for a single fire in orbit."
The thruster is critical to Momentus' business plan, which involves launching satellites from rockets into specific orbits using a spacecraft called the Vigoride. Consisting of a frame, a thruster, solar panels, avionics, and a series of satellite booms, the spacecraft is specially designed for satellites that travel with large rockets, an increasingly popular industry practice called ride sharing.
The company had planned to launch its first Vigoride mission earlier this year, but the ongoing national security review resulted in the spacecraft being removed from SpaceX ridesharing launches. The delay has also caused Momentus to lose customers and its backlog to drop from $ 90 million to $ 66 million.
Kokorich
Former CEO Kokorich has reportedly left the country and failed to resolve the SEC's charges against him.
"We have no business relationships with Mikhail Kokorich or the other founders of the company. In fact, our national security agreement with the Department of Defense prohibits that," said Rood.
When asked if Momentus or anyone on his team has been communicating with Kokorich since he left, Rood said the conversations weren't professional or technological.
"If they are [talking to Kokorich]"It's social and we need to keep a record of it," said Rood.
Artist's impression of a Momentus Vigoride transfer vehicle deploying a satellite in orbit.
While Momentus has revised its financial guidance, the company still has an ambitious target of more than $ 2 billion.
The company expects to be profitable on an EBITDA basis by 2024, a goal that Momentus will have to fly 26 missions this year. Rood said that while Momentus works to address the Pentagon's concerns and acquire a launch license, it has built two Vigoride starships and will work on more once testing is complete.
"We are in the process of assembling, testing and qualifying additional Vigoride vehicles," said Rood.
Momentus' early missions will serve as both tests of Vigoride and transportation of satellites from paying customers, he noted. The company is reducing its prices for these customers.
"We're trying to make it more attractive to customers early on," said Rood.
Another key to Momentus' success is the availability and cost of launches, with the former steadily increasing and the latter decreasing in recent years – largely due to the ridesharing Elon Musk's SpaceX offers on its Falcon 9 rockets.
"We have an agreement with SpaceX and are at a stage … where we can get the go-ahead from the federal government for our launch licenses, then we can book a manifest on a SpaceX rocket and go with them. Said Rood.
The partnership with SpaceX is "very valuable and something we value," added Rood. But Momentus can't rely on just one means of getting into space, so Vigoride is designed to be "launch vehicle independent," Rood said, and "there are other vendors we speak to."
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