SAN JOSE, CA – Momentus Inc. (NASDAQ:MNTS), a company specializing in space vehicles and parts, has entered into a financial agreement with Space Infrastructure Ventures, LLC (SIV) for a secured convertible promissory note of up to $2.3 million, according to a recent SEC filing.
Under the terms of the agreement signed on Monday, Momentus may initially borrow $500,000 and has the option to secure an additional $1.8 million in subsequent loans, subject to certain conditions including SIV's financing capabilities. The note, bearing an annual interest rate of 15%, is to be repaid in quarterly installments starting December 1, 2024, with full maturity on September 1, 2025, when all accrued interest is due.
The note is secured by a lien on substantially all of Momentus' assets and allows SIV the discretion to convert accrued interest into Momentus Common Stock at a price of $0.53 per share. Upon maturity, all obligations under the note may automatically convert into common stock at the same conversion price, pending legal and regulatory conditions.
Momentus is required to use the proceeds for working capital needs, general business purposes, and to repay secured debts to certain directors and officers. Moreover, the agreement restricts Momentus from making significant financial decisions without SIV's consent, including asset purchases, compensation increases, and debt repayments outside the usual course of business.
The company also announced that it has resolved a previous compliance issue with Nasdaq regarding the requirement to hold an annual meeting. Following the annual shareholders' meeting on June 28, 2024, Nasdaq confirmed Momentus' compliance with this listing requirement.
This financial move comes during a time when Momentus is looking to solidify its position in the space-tech industry and ensure operational liquidity. The information in this article is based on a press release statement.
In other recent news, Momentus Inc. has secured $500K through director loans, with the funds primarily allocated for employee retention payments and note expenses. The company has also been granted an extension by Nasdaq to meet its filing requirements after failing to file its quarterly report on time.
Still, Momentus has not provided a definitive filing date, creating some uncertainty for investors. In addition, the company faces potential delisting from the Nasdaq Capital Market due to non-compliance with its listing rules, caused by delayed financial filings.
Momentus has also announced strategic partnerships with the Defense Advanced Research Projects Agency (DARPA) and Ascent Solar Technologies. The collaboration with DARPA aims to develop technologies for constructing large-scale structures in space. The partnership with Ascent Solar Technologies intends to market a new solar array solution to meet the growing demand for efficient and cost-effective solar power in space.
Furthermore, a notable change in leadership has occurred at Momentus, with Lon Ensler appointed as the interim Chief Financial Officer (CFO), following the departure of Eric Williams. These are among the recent developments at Momentus Inc.
InvestingPro Insights
As Momentus Inc. (NASDAQ:MNTS) navigates through its financial and operational challenges, recent data from InvestingPro provides a snapshot of the company's current market position. With a market capitalization of $9.81 million and a striking revenue growth of 933.11% in the last twelve months as of Q4 2023, Momentus shows signs of aggressive expansion. However, its gross profit margin remains robust at 72.32%, indicating the company's ability to maintain a strong profit on its products and services.
InvestingPro Tips suggest that while analysts are optimistic about sales growth in the current year, they do not expect Momentus to be profitable this year. The company's impressive gross profit margins may be overshadowed by its rapid cash burn and high revenue valuation multiple. For investors considering Momentus, these factors could signal a need for caution due to potential volatility in the stock's price.
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