# Momentus Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Momentus Inc.](/companies/mnts.md) (CIK 1781162)
- Form: 10-Q
- Filed: 2025-08-19
- Accepted by EDGAR: Aug 19, 2025, 17:28 ET
- Period: 2025-06-30
- Accession: 0001628280-25-040834
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1781162/000162828025040834/mnts-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1781162/000162828025040834/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $191.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $513.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $2.0k | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $2.0k | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $189.0k | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $511.0k | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $2.2m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2025-01-01 to 2025-06-30 | $4.1m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $3.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $8.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$5.9m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$12.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $91.0k | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | −$65.0k | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$6.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$12.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$1.23 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$2.81 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$1.23 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$2.81 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 5,226,377 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 4,497,995 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$7.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $132.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $4.3m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $9.2m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $19.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $19.2m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | −$10.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,912 characters.

*The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our results of operations and financial condition. This discussion and analysis should be read together with our audited and unaudited financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”) and our Annual Report on Form 10-K filed with the SEC on April 1, 2025, as amended on April 9, 2025. This discussion and analysis should also be read together with our financial information for the period ended as of June 30, 2025. In addition to historical financial information, this discussion and analysis contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks, uncertainties and assumptions. As a result of many factors, such as those set forth under the “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 April 1, 2025, as amended on April 9, 2025, and “Cautionary Statement Regarding Forward-Looking Statements” elsewhere in this Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.*

*Certain figures, such as interest rates and other percentages, included in this section have been rounded for ease of presentation. Percentage figures included in this section have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our financial statements or in the associated text. Certain other amounts that appear in this section may similarly vary slightly due to rounding.*

### Overview

Momentus offers or plans to offer satellites, satellite buses, satellite technologies and components, including solar arrays, and transportation and infrastructure services to help enable the commercialization of space for commercial companies and to support the missions of U.S. and friendly governments missions. Satellite operators are our target commercial customers. Momentus is also seeking business in support of U.S. Government missions for Departments and Agencies like NASA and the Department of Defense.

Products and services that we plan to provide include provision of satellites, satellite buses, satellite technologies and components, including solar arrays, integration of payload instruments, “last mile” satellite transportation, payload-hosting, on‑orbit satellite refueling, on-orbit inspection, on-orbit satellite maintenance, de-orbiting, debris removal, and other satellite-to-satellite service offerings.

Our transportation service offering focuses on delivering our customers’ satellites to precision orbits of their choosing. To accomplish this, we partner with leading launch service providers, such as SpaceX to “ride share” our customers' satellites from Earth to space on a midsized or large rocket. Customer satellites can also be carried aboard small launch vehicles for dedicated missions. Our OSVs would then provide “last mile” transportation services from the rocket’s drop-off orbit to a custom orbit of the satellite operator’s choosing. We believe this “hub-and-spoke” model has the potential to expand our customers’ deployment options relative to what they would be able to achieve with ride share launch alone, while reducing their costs relative to what they could achieve with a dedicated small launch vehicle. Over time, we plan to begin introducing additional services beyond transportation and hosted payloads.

Since Momentus’ founding in 2017, we have been working to develop, test and enhance our vehicles and supporting technologies, particularly our water plasma propulsion technology.

Our services are made possible by the space industry’s rapid technological developments over the past two decades, driven predominantly by significant decreases in launch costs, as well as the advent of smaller, lower-cost satellites. The convergence of these trends has resulted in substantial growth in the commercial space market, rooted in higher accessibility for companies entering the new space economy that aim to offer communication, Earth observation and data collection services, and other satellite services.

We anticipate potential considerable growth over the coming years in the space transportation segment as companies continue to seek versatile and low-cost ways to deliver single satellites to specific orbits or deploy their satellite constellations. We anticipate that the need for small satellite transportation to low-Earth orbit will continue to drive overall demand growth for space transportation services in the short-term as technology advancements continue to make space more accessible to new market entrants, although new applications beyond low-Earth orbit are also emerging. We also believe that over the next decade, new space-based businesses may emerge, for example the generation of solar energy in space, space manufacturing or space data processing. The advent of these new business models could substantially increase demand for space transportation and other space infrastructure services.

Beyond transportation, we anticipate that growth of the satellite constellations market may drive demand for our satellites, satellites buses, and technologies like solar arrays, hosted payload, on-orbit satellite refueling, on-orbit inspection, on-orbit satellite maintenance, de-orbiting, debris removal, and other satellite-to-satellite service offerings, if we are successful in executing on our business plan, including fully developing and validating our technology in space. Satellite constellations have relatively low lifespans and, in our view, will require maintenance, de-orbiting, and other general servicing with higher frequency.

Momentus has developed the M-1000 satellite bus that the Company is offering to both commercial and U.S. government customers. The market for satellite buses in this class is substantial and growing. The M-1000 satellite bus is based on the Vigoride OSV and has substantial commonality.

Momentus has launched four missions to date, deployed 17 customer satellites, and provided hosted payload services. Three of these missions involved operation of the Vigoride OSV in orbit. During these three Vigoride missions, the system and technology were tested repeatedly. Improvements based on lessons learned during these missions were rapidly incorporated. As a result of these three missions, the Vigoride OSV has been successfully demonstrated in space and accumulated significant flight heritage.

### 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. The Company also enters into contracts to perform analysis and provide engineering services to U.S. Government organizations.

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.

During the three and six months ended June 30, 2025, the Company recognized $0.2 million and $0.5 million of revenue, respectively, primarily from the completion of performance obligations on engineering services performed for U.S. government and engineering project services.

As of June 30, 2025 we have signed contracts with customers and have collected approximately $3.1 million in customer deposits, $0.2 million of 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. Contracts to provide engineering services to U.S. Government organizations generally have milestone payments subject to the variable consideration constraint. When a milestone is achieved, the Company updates its estimate of the transaction price to include the milestone payment and records a cumulative catch-up in revenue.

### Cost of Revenue

Cost of revenue consists primarily of expenses associated with third-party launch costs and direct headcount cost related to the engineering project. The costs associated with orbital service vehicles are deferred to prepaid cost of revenues and amortized to cost of revenues upon release of payload. The current design and technology allow for a single use of the orbital service vehicle.

### Research and Development

Research and development expenditures consist primarily of the cost of the following activities for developing existing and future technologies for our satellites, satellite technologies, and our Orbital Service Vehicles. Research and development activities include basic research, applied research, design, development, and related test program activities. Costs incurred for developing our technologies primarily include equipment 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, 2025, we have expensed all research and development costs associated with developing and building our 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.

We also 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.

### Change in Fair Value of Convertible Debt Carried at Fair Value

Changes in the fair value of convertible debt measured at fair value on a recurring basis.

### Realized loss on disposal of assets

Realized loss on disposal of assets consists of disposals of machinery and equipment with carrying values in excess of proceeds received, if any.

### Interest Income

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

### Interest Expense

Interest expense includes interest incurred by the Company related to our loan payables as well as the amortization of warrant discount and debt issuance costs.

### Gain (Loss) on Debt Extinguishment

Gains or losses on extinguishment of debt are recognized for unamortized debt premiums, discounts and issuance costs as well as any fees paid to the lender relation to the extinguishment.

### Other Income (Expense)

Other income (expense) primarily relates to non-recurring fees incurred in conjunction with the Term Loan financing, SEC settlement cost, and 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.

### Results of Operations

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

### Comparison of Financial Results for the Three Months Ended June 30, 2025 and 2024

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Service revenue | $191 | $1,209 | $(1,018) | (84%) |
| Cost of revenue | 2 | — | 2 | 100% |
| Gross profit | 189 | 1,209 | (1,020) | (84%) |
| Operating expenses: |  |  |  |  |
| Research and development expenses | 2,193 | 2,850 | (657) | (23%) |
| Selling, general and administrative expenses | 3,940 | 5,323 | (1,383) | (26%) |
| Total operating expenses | 6,133 | 8,173 | (2,040) | (25%) |
| Loss from operations | (5,944) | (6,964) | 1,020 | (15%) |
| Other income (expense), net: |  |  |  |  |
| Realized loss on disposal of assets | — | (55) | 55 | (100%) |
| Interest income | 2 | 4 | (2) | (50%) |
| Interest expense | (91) | — | (91) | (100%) |
| Gain on debt extinguishment | 13 | — | 13 | 100% |
| Change in fair value of convertible debt carried at fair value | (835) | — | (835) | (100%) |
| Other income (expense) | 405 | (1) | 406 | (40600%) |
| Total other income (expense), net | (506) | (52) | (454) | 873% |
| Net loss | $(6,450) | $(7,016) | $566 | (8%) |

### Service revenue

Revenue recognized during the three months ended June 30, 2025 and 2024, was primarily driven by engineering services performed for the Space Development Agency agreement, resulting in $0.2 million and $1.2 million of revenue recognition, respectively.

### Research and development expenses

Research and development expenses decreased from $2.9 million in the three months ended June 30, 2024 to $2.2 million in the three months ended June 30, 2025. Payroll costs decreased by $0.5 million, inclusive of a decrease of $0.2 million in non-cash stock based compensation, driven by reduced headcount. Other miscellaneous fees, such as materials and overhead, decreased by $0.1 million

### Selling, general and administrative expenses

Selling, general and administrative expenses decreased from $5.3 million in the three months ended June 30, 2024 to $3.9 million in the three months ended June 30, 2025. Payroll costs decreased by $0.9 million, inclusive of a decrease of $0.6 million in non-cash stock based compensation. Other miscellaneous fees, such as insurance and overhead, decreased by $0.5 million.

### Realized loss on disposal of assets

The decrease in realized loss on disposal of assets for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was due to losses from the auction of machinery and equipment.

### Interest expense

The $0.1 million interest reduction for the three months ended June 30, 2025 was primarily due to amortization of the debt premium on the July Convertible Note and the October Convertible Note, partially offset by cash interest accrual. See Note 8 for additional information.

### Gain on debt extinguishment

The gain on extinguishment of debt recognized for the three months ended June 30, 2025, was due to the amendment of the convertible promissory notes between the Company and Space Infrastructure Ventures. See Note 8 for additional information.

### Change in fair value of convertible debt carried at fair value

The change in fair value of convertible debt carried at fair value for the three months ended June 30, 2025, was due to the change in fair value of the May 2025 Loan. See the Fair Value Measurement discussion in Note 2 for additional information.

### Other income (expense)

Other income increased to $0.4 million during the three months ended June 30, 2025, primarily due to an employee retention credit under the CARES Act.

### Comparison of Financial Results for the Six Months Ended June 30, 2025 and 2024

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Service revenue | $513 | $1,722 | $(1,209) | (70%) |
| Cost of revenue | 2 | — | 2 | 100% |
| Gross profit | 511 | 1,722 | (1,211) | (70%) |
| Operating expenses: |  |  |  |  |
| Research and development expenses | 4,108 | 5,526 | (1,418) | (26%) |
| Selling, general and administrative expenses | 8,532 | 11,487 | (2,955) | (26%) |
| Total operating expenses | 12,640 | 17,013 | (4,373) | (26%) |
| Loss from operations | (12,129) | (15,291) | 3,162 | (21%) |
| Other income (expense), net: |  |  |  |  |
| Realized loss on disposal of assets | — | (55) | 55 | (100%) |
| Interest income | 6 | 22 | (16) | (73%) |
| Interest expense | 65 | (57) | 122 | (214%) |
| Gain on debt extinguishment | 71 | — | 71 | 100% |
| Change in fair value of convertible debt carried at fair value | (835) | — | (835) | (100%) |
| Other income | 200 | 52 | 148 | 285% |
| Total other income (expense), net | (493) | (38) | (455) | 1197% |
| Net loss | $(12,622) | $(15,329) | 2,707 | (18%) |

### Service revenue

Revenue recognized during the six months ended June 30, 2025, was primarily driven by engineering services performed for the Space Development Agency agreement, resulting in $0.4 million of revenue recognition. The remaining $0.1 million of revenue recognized was due to customer deposit forfeiture upon contract expiration.

The revenue recognized during the six months ended June 30, 2024, was primarily driven by engineering services performed for the Space Development Agency agreement, resulting in $1.7 million of revenue recognition. The remaining $0.04 million of revenue recognized was due to customer deposit forfeiture upon contract expiration.

### Research and development expenses

Research and development expenses decreased from $5.5 million in the six months ended June 30, 2024, to $4.1 million in the six months ended June 30, 2025. The decrease was primarily due to (i) a $1.0 million reduction in payroll costs due to decreased headcount, (ii) a $0.2 million reduction on subcontractor cost, (iii) a $0.2 million reduction in research and development expenses, and (iv) a $0.1 million decrease in other overhead and allocated IT costs.

### Selling, general and administrative expenses

Selling, general and administrative expenses decreased from $11.5 million in the six months ended June 30, 2024 to $8.5 million in the six months ended June 30, 2025. The decrease is primarily due to (i) a $2.0 million decrease in payroll related expenses, inclusive of a decrease of $1.3 million in non-cash stock based compensation, (ii) a decrease in legal expenses of $0.9 million, and (iii) a $1.0 million decrease in other miscellaneous fees, such as insurance and overhead. These decreases were partially offset by an increase in consulting and professional services of $1.0 million.

### Realized loss on disposal of assets

The decrease in realized loss on disposal of assets for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was due to losses from the auction of machinery and equipment.

### Interest income

Interest income decreased from $0.02 million for six months ended June 30, 2024 to $0.01 million for the six months ended June 30, 2025 as the Company invested less in money market funds due to liquidity constraints.

### Interest expense

Interest expense decreased from $0.1 million of cash and debt discount amortization interest for the six months ended June 30, 2024, to a $0.1 million interest reduction for the six months ended June 30, 2025, primarily due to amortization of the debt premium on the July Convertible Note and the October Convertible Note, partially offset by cash interest accrual. See Note 8 for additional information.

### Gain on debt extinguishment

The gain on extinguishment of debt recognized for the six months ended June 30, 2025, was due to the amendment of the convertible promissory notes between the Company and Space Infrastructure Ventures. See Note 8 for additional information.

### Change in fair value of convertible debt carried at fair value

The change in fair value of convertible debt carried at fair value for the six months ended June 30, 2025, was due to the change in fair value of the May 2025 Loan. See the Fair Value Measurement discussion in Note 2 for additional information.

### Other income

Other income increased from $0.1 million for the six months ended June 30, 2024 to $0.2 million six months ended June 30, 2025. The increase was primarily due to primarily due to an employee retention credit under the CARES Act.

### Liquidity and Capital Resources

### Going Concern

The Company’s ability to continue as a going concern is dependent on the Company’s ability to successfully raise capital to fund its business operations and execute on its business plan. To date, the Company has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally and the Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern. This is reflected by the Company’s incurred net losses of $12.6 million for the six months ended June 30, 2025 and an accumulated deficit of $420.6 million as of June 30, 2025. Additionally, the Company used net cash of $7.4 million to fund its operating activities for the six months ended June 30, 2025, and had cash and cash equivalents of $0.1 million as of June 30, 2025.

In connection with the preparation of the condensed consolidated interim financial statements for the six months ended June 30, 2025, management conducted an evaluation and concluded that there were conditions and events, considered in the aggregate, which raised substantial doubt as to the Company’s ability to continue as a going concern within twelve months after the date of the issuance of such financial statements. The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and sale of its services and products. These conditions raise substantial doubt regarding its ability to continue as a going concern for a period of at least one year from the date of issuance of these condensed consolidated interim financial statements. In order to proceed with the Company’s business plan and operating strategy, the Company will need to raise substantial additional capital to fund its operations. Until such time, if ever, the Company can generate revenues sufficient to achieve profitability, the Company expects to finance its operations through equity or debt financings, which may not be available to the Company on the timing needed or on terms that the Company deems to be favorable. In an effort to alleviate these conditions, the Company continues to seek and evaluate opportunities to access additional capital through all available means.

As a result of these uncertainties, and notwithstanding management’s plans and efforts to date, there is substantial doubt about the Company’s ability to continue as a going concern. If the Company is unable to raise substantial additional capital in the near term, the Company’s operations and business plan will need to be scaled back or halted altogether. Additionally, if the Company is able to raise additional capital but that capital is insufficient to provide a bridge to full commercial production at a profit, the Company’s operations could be severely curtailed or cease entirely and the Company may not realize any significant value from its assets.

The accompanying condensed consolidated interim financial statements have been prepared on a going concern basis of accounting. The accompanying condensed consolidated interim financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.

### Cash Flows

*(in thousands)*

| Net cash (used in) provided by: | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(7,422) | $(6,374) |
| Investing activities | — | (40) |
| Financing activities | 5,982 | 5,199 |
| Net change in cash and cash equivalents | $(1,440) | $(1,215) |

### Operating Activities

Net cash used in operating activities for the six months ended June 30, 2025 was $7.4 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 stock-based compensation of $2.0 million, were $3.3 million. Professional fees of $3.5 million included $0.9 million in legal fees discussed in Note 12. Office overheads and other general corporate expenses were $2.4 million, which includes insurance costs of $0.5 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $0.8 million. These cash outflows were partially offset by gross profit of $0.5 million primarily related to the fulfillment of performance obligations during the six months ended June 30, 2025. Additionally, the Company had a change in operating assets and liabilities of $1.7 million during the six months ended June 30, 2025.

Net cash used in operating activities for the six months ended June 30, 2024 was $6.4 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 stock-based compensation of $3.2 million, were $5.2 million. Professional fees of $3.4 million included $1.9 million in legal fees. Office overheads and other general corporate expenses were $3.1 million, which includes insurance costs of $1.0 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $0.5 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $1.1 million. These cash outflows were partially offset by gross profit of $1.7 million primarily related to the fulfillment of performance obligations for Vigoride 5 and Vigoride 6 customers during the six months ended June 30, 2024. Additionally, the Company had a change in operating assets and liabilities of $4.7 million during the six months ended June 30, 2024.

### Investing Activities

Net cash used in investing activities was zero and $0.04 million for the six months ended June 30, 2025 and 2024, respectively, which consisted of purchases of machinery and equipment and proceeds received on the sale of machinery and equipment.

### Financing Activities

Net cash provided by financing activities was $6.0 million for the six months ended June 30, 2025, primarily due to gross proceeds of approximately $5.0 million received from the February Offering, $2.1 million received from the March 2025 Warrant Inducement Agreement, and $0.2 million received from the May 2025 Loan, partially offset by principal repayments of $0.7 million of the Convertible Notes and $1.1 million in current and deferred issuance costs related to common stock, related warrants, the warrant inducement, and other common and preferred stock issuances.

Net cash provided by financing activities was $5.2 million for the six months ended June 30, 2024, primarily due to gross proceeds of approximately $8.0 million received from the January Offering and March Offering, partially offset by principal repayments of $2.3 million under the Term Loan and $0.8 million in issuance costs related to common stock and related warrants.

### Funding Requirements

We expect our cash consumption to continue in connection with our ongoing activities.

Specifically, our operating expenses will continue as we:

- continue to refine and operate our corporate infrastructure, people, processes and systems;
- pursue sales and marketing activities for our product and services;
- pursue further research and development related to developing our satellites and satellite technology
- seek regulatory approvals for operation of our satellites and vehicles;
- actively manage our workforce, including right sizing in personnel;
- maintain, expand and protect our intellectual property portfolio;
- comply with public company reporting requirements; and
- defend against litigation.

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 I, Item 1A: “*Risk Factors,”* in our December 31, 2024 Form 10-K under the heading “*Risk Factors — We may not currently or in the future be able to continue as a going concern.”*

### Commitments and Contingencies

We are a party to leases primarily for facilities (e.g., office buildings, warehouses and spaceport) under non-cancellable operating leases. We lease office space under a non-cancellable operating lease which expires March 2026. Refer to Note 6.

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.

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.

### 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 interim financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated interim 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 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 interim financial statements included elsewhere in this Form 10-Q.

### Revenue Recognition

The Company enters into short-term contracts for ‘last-mile’ satellite and cargo delivery (transportation services), payload hosting and in-orbit servicing options with customers that are primarily in the aerospace industry. For its transportation service arrangements, the Company has a single performance obligation of delivering the customers’ payload to its designated orbit and recognizes revenue (along with any other fees that have been paid) at a point in time, upon satisfaction of this performance obligation. Additionally, for its in-orbit service arrangements, the Company provides a multitude of services consistently throughout the mission to its customers and has services available on a ‘stand ready’ basis until the mission reaches its conclusion. The Company recognizes revenue for these in-orbit services ratably over time on a straight-line basis. The Company enters into contracts to perform services for U.S. Government customers. The Company recognizes revenue for these services in accordance with the terms of these contracts.

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.

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, 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.

The Company’s satellite and cargo delivery services (transportation services) are considered a single performance obligation, to transport the customers’ payload to a specified orbit in space. We recognize revenue for these services 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.

The Company’s in-orbit services consist of a collection of interdependent and integrated services which are not considered distinct from one another and may vary depending on the specific needs of the Customer and mission. Revenue for these in-orbit services is recognized ratably over time on a straight line basis.

The Company’s engineering project services to U.S. Government organizations generally have specific payment attached to each milestone. When a milestone is achieved, the Company submits services performed for approval. Once approval is received, the Company invoices and collects on the milestone completed.

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 Sub-Topic 606-10-50-8(b).

### 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 providers that will carry the orbital service vehicle to orbit. Prepaid costs allocated to the delivery of a customer’s payload are classified as deferred fulfillment costs. Prepaid costs allocated to our payload are classified as prepaid launch costs. These costs are then recognized as cost of revenues upon release of the customer’s payload and our payload, respectively.

### 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. Some customer deposits are non-refundable. Each non-refundable deposit is determined to be a contract liability upon cash collection. Prior to making this determination, we ensure that a valid contract is in place that meets the definition of the existence of a contract in accordance with ASC Sub-Topic 606-10-25-1 and 2.

### 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 interim 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 interim 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.

### 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.

ASC Topic 740-10 requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any tax benefit can be recorded in the condensed consolidated interim financial statements. It also provides guidance on the recognition, measurement, classification and interest and penalties related to uncertain tax positions. 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 interim 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 consolidated financial condition and results of operations.

## Market risk

As filed, 1,044 characters.

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, 2025, we had cash and cash equivalents of $0.1 million, which were 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 value of our cash and cash equivalents.

#### Foreign Currency Risk

There were no material foreign currency transactions for the three and six months ended June 30, 2025 and 2024. Currently, a significant portion of our cash receipts and expenses are generated in U.S. dollars.

## Controls and procedures

As filed, 5,696 characters.

#### Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (“Disclosure Controls”) as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating the Disclosure Controls, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management was required to apply judgment in evaluating its controls and procedures. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls.

In connection with the preparation of this report, our management, under the supervision and with the participation of our CEO and CFO, conducted an evaluation of the effectiveness of the design and operation of our Disclosure Controls as of June 30, 2025. Based on this evaluation, the CEO and CFO concluded that the Company’s Disclosure Controls were not effective as of June 30, 2025, due to the material weakness in internal control over financial reporting described below.

Our management, including our CEO and CFO, has concluded that, notwithstanding the identified material weakness in our internal control over financial reporting, the condensed consolidated interim financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with GAAP.

#### Previously Identified Material Weakness

During the preparation of the Company’s financial statements for the year ended December 31, 2024, management identified a material weakness related to misclassification errors in our accounting for certain matters including the following:

- misclassifying $0.2 million of other income activity as revenue, where a transaction outside the scope of ASC Topic 606 was incorrectly presented in revenue rather than other income;
- misclassifying $0.1 million in legal expenses that were costs associated with an offering of common stock and warrants as legal costs instead of recording them as a reduction to additional paid-in capital in accordance with applicable guidance;
- a misclassifying $1.7 million related to the Company’s prepaid research and development expense balance. Based on the nature of the underlying items, which included both deposits for undelivered goods and components received intended for use in commercial launch services, the balance did not meet the criteria for prepaid research and development expense under ASC Topic 730. The Company has subsequently recorded and reclassified the balance from current assets to other non-current assets, ensuring proper classification in accordance with U.S. GAAP; and
- misclassifying $0.3 million of accounts payable as accrued liabilities.

There were no material misstatements as a result of this material weakness; however, it could have resulted in a material misstatement to the annual or interim consolidated financial statements that would not have been prevented or detected on a timely basis.

#### Management’s Plan to Remediate the Material Weakness

Management is implementing remediation steps to address the material weakness and to improve our internal control environment. Company Management prepared a plan with specific steps and milestones. This plan was briefed to the Disclosure Committee and Audit Committee, and then to the full Board of Directors. The Company will engage with outside consultants to review the revised control processes and procedures and assist with implementation as necessary. The Company’s progress in implementation is being reviewed regularly by Management, and the Disclosure and Audit Committees of the Board of Directors.

No assurance can be made that our remediation efforts will be completed in a timely manner or that the updated controls and procedures associated with such efforts will be deemed adequate after being subjected to testing. If not remediated, this material weakness could result in material misstatements to our annual or interim consolidated financial statements that may not be prevented or detected on a timely basis or result in a delayed filing of required periodic reports. If we are unable to assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected, and we could become subject to litigation or investigations by Nasdaq, the SEC, or other regulatory authorities, which could require additional financial and management resources.

#### 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, 2025 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.

## Risk factors

As filed, 718 characters.

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 April 1, 2025, as amended on April 9, 2025, which could materially affect our business, financial condition or future results. The risks described below and in our Annual Report on Form 10-K filed by the Company on April 1, 2025, as amended on April 9, 2025, 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.

Filed Aug 19, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-040834. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.