Momentus Inc. (NASDAQ:MNTS), a manufacturer in the guided missiles and space vehicles sector with a market capitalization of $14.53 million, has entered into amendments to its convertible note agreements with Space Infrastructures Ventures, LLC (SIV), as per the recent 8-K filing. According to InvestingPro analysis, the company faces challenges with debt management and maintaining liquidity, with a concerning current ratio of 0.38.
The adjustments to the previously established agreements have brought forward the borrowing date for a $1 million tranche to December 2, 2024, from the original schedule of no earlier than December 22, 2024. This change allows Momentus to access the full $3 million in principal under the October 2024 Convertible Note.
The amendments also enable SIV to reserve approximately $670 thousand from the second tranche to cover principal and interest due on December 1, 2024, under the July 2024 Convertible Note. This financial restructuring comes as InvestingPro data shows the company is quickly burning through cash, despite maintaining impressive gross profit margins of 85.48%.
Furthermore, SIV has been granted the option to convert all outstanding amounts under either note into Momentus Class A common stock at any time, a shift from the previous terms which limited conversion opportunities.
The conversion price for the July 2024 Convertible Note has been set at $0.5715, while the October 2024 Convertible Note conversion price remains at $0.5292. In connection with the second tranche borrowing under the October 2024 Convertible Note, Momentus has issued warrants to SIV for approximately 1.9 million shares of common stock at an exercise price of $0.5292 per share. The company also agreed to register the resale of shares issuable upon conversion of the notes and the warrants.
The conversion of notes and exercise of warrants are subject to a 9.99% beneficial ownership cap for SIV, which can be adjusted with the company's agreement. Compliance with Nasdaq rules is required, and if shareholder approval is needed, Momentus will make reasonable efforts to secure it.
In other developments, Momentus's Board of Directors approved a reverse stock split ratio of 1-for-14 on December 4, 2024, following stockholder approval on December 2, 2024. The reverse stock split is intended to meet Nasdaq's minimum bid price requirement for continued listing. The effective date of the reverse stock split has not been announced.
At a special meeting on December 2, 2024, stockholders also voted on matters including the reverse stock split proposal and the potential adjournment of the meeting for additional proxy solicitation. Both proposals passed. The stock's challenging performance, having declined by 80.04% over the past year, underscores the company's struggles. InvestingPro subscribers have access to over 12 additional key insights and metrics that could help evaluate the company's future prospects.
This news is based on Momentus Inc.'s recent SEC filing and does not include any speculative or promotional content.
In other recent news, Momentus Inc. has seen a series of significant developments. The company secured a contract with NASA for future satellite launch services under the VADR program, positioning it to deliver a range of payloads to multiple orbits. Momentus also joined the U.S. Defense Department's Space Development Agency's HALO program, where it will compete for demonstration prototype orders.
Momentus has also faced financial challenges, securing a $3 million convertible note with Space Infrastructures Ventures, LLC to fund working capital and general business needs. The company's financial forecast for the first half of 2024 projects revenues between $1.0 to $2.0 million and an anticipated net loss between $14.0 and $16.0 million.
The company has postponed a Special Meeting of Stockholders due to lack of quorum, rescheduling for a later date to ensure comprehensive stockholder participation. Momentus also faces potential Nasdaq delisting due to non-compliance with listing rules, but plans to present a compliance plan to a Nasdaq Hearing Panel.
Finally, Momentus has joined the Defense Advanced Research Projects Agency's BRIDGES consortium and collaborated with London-based Lodestar Space to equip its Vigoride Orbital Service Vehicle with a new robotic arm. These recent developments reflect Momentus Inc.'s ongoing efforts to navigate challenges and seize opportunities in the space industry.
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