Momentus (MNTS) risk factors, FY2024 10-K

Risks Related to the Business and Industry of Momentus

1. 01We may not currently or in the future be able to continue as a going concern
2. 02We will require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all
3. 03Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses, or if we have future negative cash flow or losses resulting from the operation of our business, could have a material adverse effect on our business, financial condition, and results of operations
4. 04We are mindful of the inherent risks involved in the initial use of hardware and complex systems in space given the difficulties of replicating all aspects of the environment and stresses that the system will experience in space during ground-based testing in simulated environments
5. 05U.S. government agencies other than the agency which we apply to for a license or approval may review our applications to the FCC, FAA, or other regulatory authorities, including to evaluate the national security implications of an application, which could result in delays
6. 06We are dependent on the successful development of our satellite technology Orbital Service Vehicles and related technology
7. 07We may not be successful in developing new technology, and the technology we are successful in developing may not meet the needs of our customers or potential new customers
8. 08We operate in highly competitive industries and in various jurisdictions across the world which may cause us to have to reduce our prices
9. 09Momentus’ limited operating history makes it difficult to evaluate its future prospects and the risks and challenges it may encounter
10. 10The market for in-space infrastructure services has not been established with precision, is still emerging and may not achieve the growth potential we expect
11. 11We may not be able to convert our customer contracts into revenue
12. 12Our future revenue and operating results are dependent on our ability to generate a sustainable order rate for our products and services and develop new technologies to meet the needs of our customers or potential new customers
13. 13The cyclical nature of the space industry could negatively impact our ability to accurately forecast customer demand. We may not be able to maintain adequate gross margins or profits in these markets
14. 14We may experience a total loss of our satellites and Orbital Service Vehicle and our customers’ payloads during the launch into space, and any insurance we have may not be adequate to cover our loss
15. 15Our business involves significant risks and uncertainties that may not be covered by insurance
16. 16The amount of insurance coverage that we maintain may not be adequate to cover all claims or liabilities. Existing coverage may be canceled while we remain exposed to the risk and it is not possible to obtain insurance to protect against all operational risks, natural hazards and liabilities
17. 17Satellites are subject to manufacturing and launch delays, damage, or destruction during pre-launch operations, launch failures and incorrect orbital placement, the occurrence of which can materially and adversely affect our operations
18. 18If our spacecraft fail to operate as intended, it could have a material adverse effect on our business, financial condition and results of operations
19. 19Increased congestion from the proliferation of low-Earth orbit constellations could materially increase the risks of potential collision with space debris or another spacecraft and limit or impair our launch flexibility and/or access to our own orbital slots
20. 20Our revenue, results of operations and reputation may be negatively impacted if our products contain defects or fail to operate in the expected manner
21. 21Fluctuations in foreign exchange rates or future hedging activities could in the future have a negative impact on our business
22. 22Our ability to produce our current and future satellite and vehicle systems and other components of operation is dependent upon sufficient availability of raw materials, specialized subcontracted labor, and supplied components, which we secure from a limited number of suppliers
23. 23Our satellites, vehicles, and related equipment may have shorter useful lives than we anticipate
24. 24We expect to face intense competition in satellite production, satellite transport, and related services and other services which we may develop in the space transportation industry
25. 25If we fail to adequately protect our intellectual property rights or our intellectual property applications for registration fail to become issued or registered, our competitive position could be impaired
26. 26Protecting and defending against intellectual property claims may have a material adverse effect on our business
27. 27We may experience warranty claims for failures, schedule delays or other problems with existing or new products
28. 28We are exposed to risks related to geopolitical and economic factors, laws and regulations and our international business subjects us to numerous political and economic factors, legal requirements, cross-cultural considerations and other risks associated with doing business globally
29. 29Data breaches or incidents involving our technology could damage our business, reputation and brand and substantially harm our business and results of operations
30. 30We are highly dependent on our senior management team and other highly skilled personnel
31. 31Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide
32. 32The individual or cumulative effects of factors discussed above could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful
33. 33Momentus’ ability to use its net operating loss carryforwards and certain other tax attributes may be limited
34. 34We may in the future be subject to substantial litigation, regulatory actions, government investigations, proceedings and similar actions that could cause us to incur significant legal expenses and which could have a material adverse effect on our business, operating results or financial condition
35. 35Natural disasters, unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt our business and vehicle launch schedules
36. 36Our restructurings and associated organizational changes may not adequately reduce our expenses, may lead to additional workforce attrition, and may cause operational disruptions
37. 37multiple employees in particular functions, and/or our inability to attract replacement or additional qualified personnel could substantially impair our ability to operate our business and implement our business plan
38. 38In the event we pursue protection under Chapters 7 or 11 of the United States Bankruptcy Code, we will be subject to the risks and uncertainties associated with such proceedings
39. 39In the event we are unable to pursue Bankruptcy Protection under Chapter 11 of the United States Bankruptcy Code, or, if pursued, successfully emerge from such proceedings, it may be necessary to pursue Bankruptcy Protection under Chapter 7 of the United States Bankruptcy Code for all or a part of our businesses
40. 40We have substantial liquidity needs and may not be able to obtain sufficient liquidity to complete a sale of substantially all of our assets under Section 363 of the United States Bankruptcy Code (or any plan of reorganization or liquidation)
41. 41A default under the lease for our corporate headquarters could result in termination of the lease by the landlord if not cured by the Company

Regulatory Risks

1. 42Our business is subject to a wide variety of additional extensive and evolving government laws and regulations. Failure to comply with such laws and regulations could have a material adverse effect on our business
2. 43system in the United States require licenses and permits from the FCC and review by other agencies of the U.S. government, including the FAA, the Department of Defense, and NASA
3. 44Contracts with the U.S. government subject us to risks including early termination, audits, investigations, sanctions and penalties

Risks Related to Ownership of our Class A Common Stock

1. 45Our Class A common stock and publicly traded warrants might be delisted from Nasdaq if we are not able to meet the Nasdaq listing standards by April 15, 2025, which could have a material adverse effect on the liquidity and trading price of our common stock and warrants and on our ability to raise capital
2. 46On October 15, 2024, the Company filed its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, resolving two of the deficiencies previously identified by Nasdaq
3. 47If the Company does not come into compliance with Nasdaq Listing Rule 5550(b) by April 15, 2025, the Company’s common stock will be subject to delisting from Nasdaq
4. 48An active trading market for our Class A common stock may never develop or be sustained, which may make it difficult to sell the shares of Class A common stock you receive
5. 49The market price of our Class A common stock and warrants may be volatile, which could cause the value of your investment to decline
6. 50Future sales of shares by Company officers, directors and other insiders may adversely affect the market price of our Class A common stock
7. 51If securities and industry analysts do not publish or cease publishing research or reports, or publish inaccurate or unfavorable research or reports, about our business or our market, our stock price and trading volume could decline
8. 52Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our Class A common stock
9. 53Future sales and issuances of our Class A common stock could cause our stock price to fall
10. 54We need additional capital and any additional capital we seek may not be available in the amount or at the time we need it
11. 55The market price of our Class A common stock has been, and may continue to be, volatile, which could reduce the market price of our Class A common stock
12. 56We may be required to issue additional shares of Class A common stock in connection with the Reverse Stock Split and we may be subject to potential liability if it is determined that we are required to issue such shares and we fail to issue such shares on a timely basis

General Risks

1. 57Our employees and independent contractors may engage in misconduct or other improper activities, which could have an adverse effect on our business, prospects, financial condition and operating results
2. 58Labor-related matters, including labor disputes, may adversely affect our operations
3. 59Changes in our accounting estimates and assumptions could negatively affect our financial position and results of operations
4. 60“Management's Report on Internal Control Over Financial Reporting” under Item 9A, Controls and Procedures, for additional information regarding this material weakness, including our remediation plan