ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless the context otherwise requires, all references in this section to the “Company,” “Momentus,” “we,” “us,” or “our” refer to Momentus Inc.
The following discussion and analysis provide 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 consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion and analysis should also be read together with our financial information for the year ended and as of December 31, 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” section above and “Cautionary Statement Regarding Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K, 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 consolidatedfinancial statements or in the associated text. Certain other amounts that appear in this section may similarly not sum due to rounding.
Overview
Momentus offers or plans to offer satellites, satellite buses, satellite technologies and components, including solar arrays, and transportation, communications and infrastructure services for commercial companies and to support the missions of U.S. and friendly governments. Government and commercial satellite operators and space technology companies and organizations 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 U.S Department of Defense.
We provide or plan to provide satellites, satellite buses, satellite technologies and components, including solar arrays, 3D printed propulsion tanks, integration of payload instruments, communication, tracking, and other satellite services, “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. 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.
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, sensing, data processing and storage, 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
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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, 3D printed propulsion tanks, hosted payload, communication, tracking, and other satellite services, 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 offers the M-1000 satellite bus 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 year ended December 31, 2025, the Company recognized $1.1 million of revenue primarily from the completion of performance obligations on engineering services performed for U.S. government and engineering project services.
As of December 31, 2025, the Company had signed contracts with customers and had collected approximately $4.2 million in customer deposits, $0.1 million of which are recorded as non-current contract liabilities in our 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 related to the related engineering work. The costs associated with OSVs 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 OSV.
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 OSV. Research and development
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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 December 31, 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.
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 in relation to the extinguishment.
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.
Change in Fair Value of Warrant Liability
Changes in the fair value of warrant liabilities measured at fair value on a recurring basis.
Other Income (Expense)
Other income (expense) primarily relates to non-recurring fees incurred in conjunction with impairment or write-off charges, 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.
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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 Year Ended December 31, 2025 and 2024
Year EndedDecember 31,
(in thousands) 2025 2024 $ Change % Change
Operating expenses:
Other income (expense), net:
Realized loss on disposal of assets — (188) 188 (100 %)
Change in fair value of warrant liability 2,330 — 2,330 100 %
Service revenue
Revenue recognized during both the years ended December 31, 2025 and 2024, was primarily the result of engineering services performed under the Defense Advanced Research Project Agency (“DARPA”) Novel Orbital and Moon Manufacturing, Materials, and Mass-efficient Design (“NOM4D”) and DARPA Bringing Classified Innovation to Defense and Government Systems (“BRIDGES”) programs and the Space Development Agency Hybrid Acquisition for Proliferated Low Earth Orbit (“HALO”) program. Of $1.1 million and $2.1 million of revenue recognized during the years ended December 31, 2025 and 2024, respectively, $0.9 million and $1.8 million, respectively, were recognized for engineering services performed. The remaining $0.2 million and $0.3 million of revenue recognized during the years ended December 31, 2025 and 2024, respectively, was due to the forfeiture of customer deposits upon contract expiration.
Cost of revenue
Cost of revenue for the years ended December 31, 2025 and 2024, consisted primarily of personnel costs for engineering services under our agreement with the Space Development Agency, including salaries, benefits, and other direct labor-related expenses.
Research and development expenses
Research and development expenses decreased from $9.8 million in the year ended December 31, 2024, to $9.2 million in the year ended December 31, 2025. The decrease was primarily due to a $1.1 million reduction in payroll costs due to decreased headcount, partially offset by a $0.4 million increase in subcontractor costs and a $0.1 million increase in other miscellaneous fees, such as information technology and facilities overhead allocation.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased from $21.9 million in the year ended December 31, 2024, to $19.2 million in the year ended December 31, 2025. The decrease is primarily due to (i) a $4.1 million decrease in
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payroll related expenses, inclusive of a decrease of $3.1 million in non-cash stock-based compensation, (ii) a decrease in legal expenses of $0.8 million, and (iii) a $0.9 million decrease in other miscellaneous fees, such as insurance and subscriptions. These decreases were partially offset by an increase in consulting and professional services of $1.4 million and a $1.7 million impairment of prepaid services (see Note 9 for additional information).
Realized loss on disposal of assets
The decrease in realized loss on disposal of assets for the year ended December 31, 2024, was due to losses from the auction of machinery and equipment. There was no loss on disposal recognized during the year ended December 31, 2025.
Interest income
Interest income increased from $0.03 million for year ended December 31, 2024, to $0.1 million for the year ended December 31, 2025, as the Company invested more in money market funds.
Interest expense
Interest expense increased from $0.4 million for the year ended December 31, 2024, to $0.7 million for the year ended December 31, 2025. The interest increase is primarily due to increase in cash interest accrual and amortization of the debt discount on the SIV Convertible Notes and the September 2025 Convertible Note, partially offset by amortization of the debt premium on the SIV Convertible Notes. See Note 8 for additional information.
Loss on debt extinguishment
The loss on extinguishment of debt of $2.8 million recognized for the year ended December 31, 2025, was due to the amendment of the SIV Convertible Notes and extinguishment of the May 2025 Loan. The loss on extinguishment of debt of $4.3 million recognized for the year ended December 31, 2024, was due to the early payoff of the December 2024 Loan and amendment of the SIV Convertible Notes. 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 year ended December 31, 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.
Change in fair value of warrant liability
The change in fair value of warrant liability for the year ended December 31, 2025, was due to the change in fair value of the AIR Warrants and the ELOC Pre-funded Warrants. See the Fair Value Measurement discussion in Note 2 for additional information.
Other income (expense)
Other expense increased to $1.3 million during the year ended December 31, 2025, primarily due to the $1.4 million loss recognized on issuance of warrant liabilities related to the September 2025 Private Placement (see Note 8 for additional information) partially offset by a $0.2 million change in fair value of derivatives.
Liquidity and Capital Resources
Going Concern
In connection with the preparation of the consolidated financial statements for the year ended December 31, 2025, management concluded that, in the event the Company is unable to raise additional financing, the following plans alleviate the substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date of the issuance of such financial statements: (i) collection of amounts as they come due under customer contracts, (ii) monetization of unutilized capacity under the MSA agreement with Velo3D; (iii) reduction of employee headcount and compensation expenses; and (iv) reduction of outside vendor expenses.
While the Company believes these actions provide sufficient liquidity for its current operating plans, additional capital will be required in the future to support operations and growth initiatives and achieve profitability, and there can be no assurance that such capital will be available on acceptable terms or at all. 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. This is reflected by the Company’s incurred net losses of $30.5 million for the year ended December 31, 2025, and an accumulated deficit of $438.6 million as of
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December 31, 2025. Additionally, the Company used net cash of $23.3 million to fund its operating activities for the year ended December 31, 2025, and had cash and cash equivalents of $12.8 million as of December 31, 2025.
The accompanying consolidated financial statements have been prepared on a going concern basis of accounting. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.
Cash Flows
Year EndedDecember 31,
Net cash (used in) provided by:
Investing activities (12) 94
Net change in cash and cash equivalents $ 11,289 $ (920)
Operating Activities
Net cash used in operating activities for the year ended December 31, 2025, was $23.3 million, consisting primarily of 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 $3.3 million, were $7.1 million. Professional fees of $7.0 million included $2.3 million in legal fees. Office overheads and other general corporate expenses were $5.5 million, which includes insurance costs of $1.0 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $2.1 million. These cash outflows were partially offset by gross profit of $1.1 million primarily related to the fulfillment of performance obligations during the year ended December 31, 2025. Additionally, the Company had a change in operating assets and liabilities of $2.7 million during the year ended December 31, 2025.
Net cash used in operating activities for the year ended December 31, 2024, was $16.6 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 $6.5 million, were $9.0 million. Professional fees of $6.7 million included $3.1 million in legal fees. Office overheads and other general corporate expenses were $5.8 million, which includes insurance costs of $1.5 million. Research and Development activity expenses, including materials, components, and subcontractor costs were $1.7 million. These cash outflows were partially offset by gross profit of $2.0 million primarily related to the fulfillment of performance obligations for Vigoride 5 and Vigoride 6 customers during the year ended December 31, 2024. Additionally, the Company had a change in operating assets and liabilities of $5.2 million during the year ended December 31, 2024.
Investing Activities
Net cash used in investing activities was $0.01 million for year ended December 31, 2025, which consisted of purchases of machinery and equipment. Net cash provided by investing activities was $0.1 million for the year ended December 31, 2024, which consisted of proceeds received on the sale of machinery and equipment.
Financing Activities
Net cash provided by financing activities was $34.6 million for the year ended December 31, 2025, primarily due to gross proceeds of approximately (i) $22.6 million received from the July 2025 Offering and February 2025 Offering, (ii) $15.6 million received from the December 2025 Warrant Inducement, October 2025 Warrant Inducement, August 2025 Warrant Inducement, and March 2025 Warrant Inducement, and (iii) $2.3 million received from the September 2025 Private Placement, the May 2025 Loan, and related issuances of warrants. These gross proceeds were partially offset by principal repayments of $2.2 million on the May 2025 Loan and SIV Convertible Notes and $3.7 million in issuance costs related to convertible notes, common stock, related warrants, the warrant inducements, and other common and preferred stock issuances.
Net cash provided by financing activities was $15.6 million for the year ended December 31, 2024, primarily due to gross proceeds of approximately (i) $15.7 million received from the December 2024 Offering, September 2024
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Offering, March 2024 Offering, and January 2024 Offering, (ii) $5.3 million received from the SIV Convertible Notes, and (iii) $2.0 million from the December 2024 Loan. These gross proceeds were partially offset by (i) principal repayments of $4.7 million under the Term Loan, (ii) $2.1 million in issuance costs related to convertible notes, common stock and related warrants, and (iii) principal repayments of $0.6 million under the SIV Convertible Notes.
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.
Commitments and Contingencies
We are a party to leases primarily for facilities (e.g., office buildings, warehouses, and spaceport) under non‐cancellable operating leases. 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 consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our consolidated 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 consolidated financial statements included elsewhere in this Form 10-K.
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 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
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time, upon satisfaction of this performance obligation. Additionally, for its in-orbit service arrangements, the Company provides a multitude of services during the mission to its customers. 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, 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 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 OSV or satellite 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 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
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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 NSOs and RSAs are granted to employees, directors, and consultants. All stock-based payments to employees, including grants of employee stock options are recognized in the consolidated 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 (or “BSM”). 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 consolidated 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 BSM 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.
Debt and Equity Financings
We have entered into various debt and equity financing arrangements, including convertible promissory notes, warrants, pre-funded warrants, and an equity line of credit agreement. Accounting for these instruments requires significant management judgment, including the determination of whether warrants and embedded conversion options meet the criteria for equity classification or must be accounted for as liabilities. Certain warrants are accounted for as liabilities and are remeasured at fair value each reporting period using Level 3 valuation techniques, with changes in fair value recognized in the consolidated statements of operations. The fair value calculations involve assumptions regarding stock price volatility, expected term, and risk-free interest rates. Changes in these assumptions could materially affect the Company’s financial statements. Refer to Notes 8 and 9 to the consolidated financial statements for additional information.
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 consolidated 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.
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Please refer to Note 2 in the notes to our consolidated financial statements included elsewhere in this Form 10-K 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.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
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 December 31, 2025, we had cash and cash equivalents of $12.8 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 years ended December 31, 2025 and 2024.
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ITEM 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 1596) 52
Consolidated Financial Statements
Balance Sheets 54
Statements of Operations 55
Statements of Stockholders’ Equity (Deficit) 56
Statements of Cash Flows 57
Notes to the Consolidated Financial Statements 58
Note 1. Nature of Operations 58
Note 2. Summary of Significant Accounting Policies 60
Note 3. Prepaids and Other Current Assets 70
Note 4. Property, Machinery and Equipment, net 70
Note 5. Intangible Assets, net 70
Note 6. Leases 71
Note 7. Accrued Expenses 72
Note 8. Loan Payable 72
Note 9. Stockholders’ Deficit 81
Note 10. Stock-based Compensation 96
Note 11. Diluted Earnings Per Share 98
Note 12. Commitments and Contingencies 98
Note 13. Income Taxes 93
Note 14. Related Party Transactions 106
Note 15. Segment Information 106
Note 16. Supplemental for Consolidated Statements of Cash Flows 108
Note 17. Subsequent Events 108
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Momentus Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Momentus Inc. and Subsidiaries (collectively the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows, for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Amendments of Convertible Notes – Refer to Note 8 in the Consolidated Financial Statements
As discussed in Note 8, the Company entered into multiple amendments to its existing convertible debt agreements with Space Infrastructure Ventures (the “Convertible Notes”). Management evaluated each amendment to determine whether it should be accounted for as a debt modification or a debt extinguishment. This process involved significant management judgment in determining the appropriate accounting treatment and required a complex analysis of the terms of the amended agreements compared to the original agreements. For amendments determined to represent extinguishments, the Company recognized a gain or loss on extinguishment, as applicable, resulting in a net loss on debt extinguishment.
We identified the accounting for the amended convertible debt as a critical audit matter due to the significant judgments required by management in assessing whether the terms of the amended agreements were substantially different from the original agreements, which impacted whether the transactions were accounted for as modifications or extinguishments. This involved significant audit effort and the use of auditor judgment when performing audit procedures and evaluating the results of those procedures.
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How the Critical Audit Matter Was Addressed in the Audit
Our principal audit procedures performed to address this critical audit matter included the following:
•We obtained an understanding and evaluated the design and implementation of controls over the Company’s accounting for the amendments of the Convertible Notes, including management's review controls over the technical accounting aspects of the amendments.
•We read the underlying agreements and assessed the terms in relation to the relevant accounting principles.
•We tested the completeness and accuracy of management’s analysis over whether each amendment met the conditions to be treated as a debt modification or extinguishment by evaluating them against the relevant technical accounting guidance. This included procedures to evaluate the judgments and estimates that are involved.
Master Services Agreement with Velo3D, Inc. – Refer to Note 9 in the Consolidated Financial Statements
As discussed in Note 9, on April 12, 2025, the Company entered into a Master Services Agreement (“MSA”) with Velo3D, Inc. (“VLD”) pursuant to which the Company issued equity instruments with a grant-date fair value of $10.7 million in exchange for future manufacturing services. In August 2025, the Company irrevocably waived its right under the MSA to cancel shares of the Company’s capital stock held by VLD upon expiration or termination of the MSA which made the equity instruments fully vested and non-forfeitable upon amendment. The amendment was accounted for as a Type I Modification under ASC Topic 718 and the Company recognized the grant-date fair value of $10.7 million immediately as a prepaid design and production services asset at the grant-date fair value of the issued equity instruments. As the only term that changed as a result of the amendment was related to vesting, there was no change in the fair value of the equity instruments as a result of the amendment and no incremental fair value was recognized. The MSA also includes a credit provision for unused capacity, which the Company accounted for as an embedded derivative under ASC Topic 815 and records at fair value each reporting period. During the year ended December 31, 2025, the Company recognized a $1.7 million impairment of prepaid design and production services due to underutilization, partially offset by a $0.2 million increase in the fair value of the embedded derivative.
We identified the accounting for the MSA as a critical audit matter due to the significant judgment required by management in (i) determining the appropriate accounting treatment under ASC Topic 718 for equity issued in exchange for services, including the assessment and accounting for the August 2025 modification, (ii) identifying and valuing the embedded derivative under ASC Topic 815, including the determination of key assumptions impacting fair value, and (iii) evaluating the recoverability of the prepaid design and production services asset, including assumptions related to expected utilization of contracted capacity.
How the Critical Audit Matter Was Addressed in the Audit
Our principal audit procedures performed to address this critical audit matter included the following:
•We obtained an understanding and evaluated the design and implementation of controls over the Company’s accounting for the MSA, including management's review controls over the technical accounting aspects of the transaction.
•We read the underlying agreements and assessed the terms in relation to the relevant accounting principles.
•We tested the completeness and accuracy of management’s analyses over (i) the grant-date fair value measurement of the equity instruments, (ii) the embedded derivative identification and related fair value measurements, (iii) the modification event and related incremental fair value assessment, (iv) the resulting asset recognition, and (v) the subsequent partial impairment by evaluating the analyses against the relevant technical accounting guidance. This included procedures to evaluate the judgments and estimates that are involved.
/s/ Frank, Rimerman + Co. LLP
We have served as the Company’s auditor since 2023.
San Francisco, California
March 31, 2026
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MOMENTUS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except number of shares and par value)
ASSETS
Current assets:
Restricted cash, current 55 —
Accounts receivable — 879
Prepaids and other current assets 9,321 1,667
Property, machinery and equipment, net 953 2,182
Operating right-of-use asset 7,686 347
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Contract liabilities, current 4,058 345
Operating lease liability, current 836 685
Litigation settlement contingency 802 420
Other current liabilities 541 1
Contract liabilities, non-current 120 1,901
Warrant liability 3 3
Operating lease liability, non-current 6,987 333
Other non-current liabilities — 515
Total non-current liabilities 7,110 2,752
Commitments and Contingencies (Note 12)
Stockholders’ equity (deficit):
Total stockholders’ equity (deficit) 17,140 (7,810)
Total liabilities and stockholders’ equity (deficit) $ 40,319 $ 9,952
The accompanying notes are an integral part of these consolidated financial statements
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MOMENTUS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Year EndedDecember 31,
Cost of revenue 2 66
Operating expenses:
Research and development expenses 9,190 9,782
Selling, general and administrative expenses 19,173 21,949
Other income (expense), net:
Realized loss on disposal of assets — (188)
Interest income 57 25
Loss on debt extinguishment (2,827) (4,258)
Change in fair value of convertible debt carried at fair value (835) —
Change in fair value of warrant liability 2,330 —
Total other income (expense), net (3,213) (5,263)
Deemed dividend on downround of warrants (117) —
Net loss attributable to common stockholders $ (30,585) $ (34,946)
Net loss per share, basic and diluted $ (49.10) $ (414.01)
Weighted average shares outstanding, basic and diluted 622,937 84,409
The accompanying notes are an integral part of these consolidated financial statements
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MOMENTUS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands, except share data)
Shares Amount Shares Amount
Issuance of common stock upon vesting of RSUs — — 247 — — — —
Issuance of common stock upon exercise of pre-funded warrants — — 64,945 — — — —
Issuance of common stock upon cashless exercise of warrants — — 35,700 — — — —
Issuance of warrants with convertible notes — — — — 1,305 — 1,305
Issuance of warrants with loan payable — — — — 121 — 121
Issuance of warrants for debt issuance costs — — — — 2,000 — 2,000
Stock-based compensation - stock options, RSAs, RSUs — — — — 6,493 — 6,493
Issuance of common stock upon release of RSUs — — 3,822 — — — —
Issuance of warrants with convertible debt — — — — 572 — 572
Issuance of warrants for debt issuance costs — — — — 130 — 130
Deemed dividend upon downround of warrants — — — — 117 (117) —
Common stock issued in connection with reverse stock split — — 44 — — — —
Stock-based compensation - stock options, RSAs, RSUs — — — — 3,273 — 3,273
The accompanying notes are an integral part of these consolidated financial statements
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MOMENTUS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year EndedDecember 31,
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 1,293 857
Amortization of debt (premium) and issuance costs 12 147
Amortization of right-of-use assets 228 1,158
Change in fair value of warrant liability (2,330) —
Change in fair value of convertible debt carried at fair value 835 —
Change in fair value of the Credit Provision Derivative (164) —
Impairment of prepaid services 1,669 —
Loss on disposal of fixed and intangible assets — 188
Debt issuance costs expensed for convertible debt carried at fair value 165 —
Loss on issuance of warrant liabilities 1,391 —
Stock-based compensation expense 3,273 6,493
Issuance of convertible notes for legal services 331 —
Changes in operating assets and liabilities:
Prepaids and other current assets (7,490) 6,845
Other current liabilities 537 (5)
Operating lease liability (762) (1,268)
Litigation settlement contingency 382 420
Other non-current liabilities (516) 25
Net cash used in operating activities (23,275) (16,611)
Cash flows from investing activities:
Purchases of property, machinery and equipment (12) —
Proceeds from sale of property, machinery and equipment — 135
Purchases of intangible assets — (41)
Net cash (used in) provided by investing activities (12) 94
Cash flows from financing activities:
Proceeds from issuance of convertible notes and warrants 2,250 5,300
Payment of convertible notes (2,193) (575)
Proceeds from issuance of loan payable — 2,000
Proceeds from issuance of related party notes — 500
Principal payments on related party notes — (500)
Principal payments on loan payable — (4,719)
Payment of debt issuance costs (424) (438)
Proceeds from exercise of warrants 15,574 —
Payments for issuance costs related to exercise of warrants (1,509) —
Repurchase of Section 16 Officer shares for tax coverage exchange (1) (4)
Proceeds from issuance of common stock and related warrants 22,552 15,710
Net cash provided by financing activities 34,576 15,597
Increase (Decrease) in cash, cash equivalents, and restricted cash 11,289 (920)
Cash, cash equivalents, and restricted cash, beginning of period 1,572 2,492
Cash, cash equivalents, and restricted cash, end of period $ 12,861 $ 1,572
The accompanying notes are an integral part of these consolidated financial statements
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MOMENTUS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Operations
The Company
Momentus Inc. (together with its consolidated subsidiaries “Momentus” or the “Company”) is a U.S. commercial space company that offers satellites, satellite buses, satellite technologies and components, and space infrastructure services, including in-space transportation, hosted payloads and in-orbit services.
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 Orbital Service Vehicle (“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. The Company has produced its next OSV, Vigoride 7, that it intends to utilize on a 2026 mission.
In addition to the Vigoride OSV, Momentus is now also offering its M-1000 satellite bus which has substantial commonality with Vigoride. With a growing demand for satellite bus services, Momentus is positioned to advance its hardware and flight-proven technology for this market. The M-1000 bus is a flexible option to meet various mission requirements. Innovations to improve sensor capability, maneuverability, increased power, and lower costs are integrated into the product. Momentus believes it can manufacture satellite buses like the M-1000 at a rapid and scalable pace.
Business Combination
On August 12, 2021, the Company consummated a merger pursuant to the terms of the Agreement and Plan of Merger, dated October 7, 2020, and as amended on March 5, 2021, April 6, 2021, and June 29, 2021 (the “Merger Agreement”), by and among Stable Road Acquisition Corp (“SRAC”), Project Marvel First Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of SRAC (“First Merger Sub”), and Project Marvel Second Merger Sub, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of SRAC (“Second Merger Sub”), pursuant to which First Merger Sub merged with and into Momentus Inc., a Delaware corporation (“Legacy Momentus”) with Legacy Momentus as the surviving corporation of the First Merger Sub, and immediately following which Legacy Momentus merged with and into the Second Merger Sub, with the Second Merger Sub as the surviving entity (the “Business Combination”). In connection with the closing of the Business Combination (“Closing”), the Company changed its name from Stable Road Acquisition Corp. to Momentus Inc., and Legacy Momentus changed its name to Momentus Space, LLC.
The Business Combination was accounted for as a reverse recapitalization under ASC Topic 805, Business Combinations, with SRAC and its two wholly-owned subsidiaries. The Company received gross proceeds of $247.3 million upon the Closing. Public and private warrants of SRAC were assumed by the Company as a result of the Business Combination.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these consolidated financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
Pursuant to ASC Sub-Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, in connection with the preparation of the consolidated financial statements for the year ended December 31, 2025, management concluded that, without taking into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to fund its regular operations, scaling of commercial production, and maintain its existing services and products as a going concern for one year from the date these consolidated financial statements are issued. Management’s plans in the event the Company is unable to raise additional financing include (i) collection of amounts as they come due under customer contracts, (ii) monetization of unutilized capacity under the MSA agreement with Velo3D; (iii) reduction
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MOMENTUS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Operations (cont.)
of employee headcount and compensation expenses; and (iv) reduction of outside vendor expenses. Management then evaluated its plans to reduce expenses under the framework provided in ASC Sub-Topic 205-40, and determined that the mitigating effect of its plans sufficiently alleviates the substantial doubt about the Company’s ability to continue as a going concern.
Under ASC Sub-Topic 205-40, the mitigating effect of management’s plans is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the consolidated financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. While the Company believes these actions provide sufficient liquidity for its current operating plans, additional capital may be required in the future to support growth initiatives and achieve profitability, and there can be no assurance that such capital will be available on acceptable terms or at all. 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 remains heavily focused on growth and continued development of its proprietary technology, and as a result, it has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally. This is reflected by the Company’s incurred net loss of $30.5 million for the year ended December 31, 2025, and accumulated deficit of $438.6 million as of December 31, 2025. Additionally, the Company used net cash of $23.3 million to fund its operating activities for the year ended December 31, 2025, and had cash and cash equivalents of $12.8 million as of December 31, 2025.
The accompanying consolidated financial statements have been prepared on a going concern basis of accounting. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.
Reverse Stock Splits
Effective December 17, 2025, the Company’s stockholders approved a 1-for-17.85 reverse stock split of the Company’s Class A common stock. As a result of the reverse stock split, every 17.85 shares of Class A common stock issued and outstanding on December 17, 2025, were automatically combined into one share of Class A common stock. Any fractional shares resulting from the reverse stock split were rounded up to the next nearest whole share of Class A common stock. The reverse stock split did not affect the stated par value of the Class A common stock nor did it change the total number of the Company’s authorized shares of Class A common stock. Both the Company’s Class B common stock and Series A preferred stock were not affected by the reverse stock split.
In addition to the reverse stock split implemented in December 2025, the Company previously effected a 1-for-14 reverse stock split of the Company’s Class A common stock on December 12, 2024, whereby every 14 shares of Class A common stock issued and outstanding on December 12, 2024, were automatically combined into one share of Class A common stock. Any fractional shares resulting from the reverse stock split were rounded up to the next nearest whole share of Class A common stock. The reverse stock split did not affect the stated par value of the Class A common stock nor did it change the total number of the Company’s authorized shares of Class A common stock. The Company’s Class B common stock were not affected by the reverse stock split.
Also on the effective date of each reverse stock split, all options, warrants, and other convertible securities of the Company outstanding immediately prior to the reverse stock split were adjusted by dividing the number of shares of Class A common stock into which the options, warrants, and other convertible securities are exercisable or convertible by the factor applied in the reverse stock split, and multiplying the exercise or conversion price thereof by the same amount, all in accordance with the terms of the plans, agreements, or arrangements governing such options, warrants, and other convertible securities and subject to rounding to the nearest whole share. Such proportional adjustments were also made to the number of shares and restricted stock units (“RSUs”) issued and issuable under the Company’s equity compensation plans.
The Company has retroactively adjusted all periods presented for the effects of the December 2025 1-for-17.85 reverse stock split. See Note 9 for additional information.
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MOMENTUS INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Accordingly, actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include, but are not limited to, the timing of revenue recognition, accounting for useful lives of property, machinery and equipment, net, intangible assets, net, accrued liabilities, leases, income taxes including deferred tax assets and liabilities, impairment valuation, stock-based compensation, warrant liabilities, and litigation contingencies.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when initially purchased.
The Company places its cash in the bank, which may at times be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits of $250,000 per depositor, with high credit quality financial institutions and attempts to limit the amount of credit exposure with any one institution.
Restricted Cash
Restricted cash primarily represents cash deposited as collateral for the Company’s credit card program. As of December 31, 2025 and 2024, the Company maintained restricted cash of $0.1 million and zero, respectively.
Accounts Receivable
Accounts receivable as of December 31, 2024, represent amounts primarily due from the Defense Advanced Research Project Agency (“DARPA”) to provide support to the DARPA Novel Orbital and Moon Manufacturing, Materials, and Mass-efficient Design (“NOM4D”) program, including arranging launch services, payload integration, and in-orbit hosting of the payload for a complex in-space assembly mission. Accounts Receivable are stated at invoice value less estimated allowances for credit losses. Allowances are recorded based on the Company’s assessment of various factors, such as: historical experience, credit quality of its customers, aging of the accounts receivable balances, economic conditions, and other factors that may affect a customer’s ability to pay. The allowance for credit losses as of December 31, 2025 and 2024, was zero.
Deferred Fulfillment and Prepaid Launch Costs
The Company prepays for certain launch costs to third-party providers that will carry the transport vehicle to orbit. Prepaid costs allocated to the delivery of a customers’ payload are classified as deferred fulfillment costs and prepaid costs allocated to our payload are classified as prepaid launch costs. All deferred fulfillment and prepaid launch costs are recognized as cost of revenue upon delivery of the related payloads.
As of December 31, 2025 and 2024, the Company had deferred fulfillment and prepaid launch costs of $6.3 million and $2.6 million, respectively, with $5.1 million and zero recorded within prepaids and other current assets, respectively, and $1.2 million and $2.6 million recorded within other non-current assets in our consolidated balance sheets, respectively.
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MOMENTUS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
Property, Machinery and Equipment
Property, machinery and equipment are stated at cost less accumulated depreciation. Depreciation is generally recorded using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives of fixed assets by asset category are described below:
Fixed Assets Estimated Useful Life
Computer equipment Three years
Furniture and fixtures Five years
Machinery and equipment Seven years
Costs of maintenance or repairs that do not extend the lives of the respective assets are charged to expenses as incurred.
Intangible Assets
Intangible assets, which consist of patents, are considered long-lived assets and are reported at cost less accumulated amortization and accumulated impairment loss, if any. Amortization is recognized on a straight-line basis over 10 years for patents, which is the estimated useful lives of the intangible assets.
In accordance with ASC Sub-Topic 350-40, Intangibles, the Company presents capitalized implementation costs for cloud computing arrangements within prepaid and other current assets, and other non-current assets to properly present the capitalized costs with their related subscription fees.
Loss Contingencies
The Company estimates loss contingencies in accordance with ASC Sub-Topic 450-20, Loss Contingencies (“ASC 450-20”), which states that a loss contingency shall be accrued by a charge to income if both of the following conditions are met: (i) information available before the consolidated financial statements are issued or are available to be issued indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements and (ii) 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 toNote 12 for additional information.
Revenue Recognition
The Company enters into short-term contracts for ‘last-mile’ satellite and cargo delivery (transportation service), 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 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 during the mission to its customers. The Company recognizes revenue for these in-orbit services ratably over time on a straight-line basis. The Company also enters into contracts to perform analysis and provide engineering services to U.S. government organizations.
The Company accounts for customer contracts in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), 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.
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MOMENTUS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
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. Contracts to provide engineering services to U.S. government organizations generally have set payments tied to each milestone. When a milestone is achieved, the Company submits the completed service for approval, submits invoices to the government site, and collects on that completed milestone. During the years ended December 31, 2025 and 2024, the Company recorded $0.9 million and $1.8 million, respectively, of revenue from the U.S. government.
As part of its contracts with customers, the Company collects up-front non-refundable deposits prior to launch. As of December 31, 2025 and 2024, the Company had customer deposit balances of $4.2 million and $2.2 million, respectively, related to signed contracts with customers, including firm orders and options (some of which have already been exercised by customers). These deposits are recorded as contract liabilities in the Company’s consolidated balance sheets. Included in the collected amount as of December 31, 2025 and 2024, are $0.1 million and $1.9 million, respectively, of non-current deposits.
During the year ended December 31, 2025, the Company recognized $1.1 million of revenue primarily due to engineering services performed under the DARPA NOM4D and DARPA BRIDGES programs, payment under the Space Development Agency HALO program, and forfeited customer deposits primarily related to expired options. Of the $1.1 million of revenue recognized, $0.2 million was derived from the December 31, 2024, contract liability balance. During the year ended December 31, 2024, the Company recognized$2.1 million of revenue due to engineering services performed on the Space Development Agency milestone two agreement and forfeited customer deposits primarily related to expired options. Of the $2.1 million of revenue recognized, $0.3 million was derived from the December 31, 2023, contract liability balance.
The disaggregation of revenue by type is as follows:
Year EndedDecember 31,
Forfeited customer deposits $ 162 $ 307
Engineering project services 948 1,807
Fair Value Measurement
The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. A three-tiered hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value. This hierarchy requires that the Company use observable market data, when available, and minimize the use of unobservable inputs when determining fair value:
•Level 1, observable inputs such as quoted prices in active markets;
•Level 2, inputs other than the quoted prices in active markets that are observable either directly or indirectly; and
•Level 3, unobservable inputs in which there is little or no market data, which requires that the Company develop its own assumptions.
The fair values of cash and cash equivalents, accounts payable, and certain prepaid and other current assets and accrued expenses approximate carrying values due to the short-term maturities of these instruments which fall with Level 1 of the fair value hierarchy. The carrying value of certain other non-current assets and liabilities approximates fair value. The Company had no Level 2 inputs for the years ended December 31, 2025 and 2024.
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MOMENTUS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (cont.)
As of December 31, 2025, the Company does not have any assets measured at fair value on a recurring basis, other than the Credit Provision Derivative (see Note 9 for additional detail). The Credit Provision Derivative is measured at fair value under ASC Topic 815 and is classified within Level 3 of the fair value hierarchy. The Company estimated the fair value of derivative asset based on the expected underutilization payment to be received during 2026.
The change in fair value of the Credit Provision Derivative asset subject to recurring remeasurement was as follows:
(in thousands)
Issuance —
Change in fair value 164
As of December 31, 2025, the Company has the following liabilities measured at fair value on a recurring basis:
•Certain of the Company’s warrants are recorded as a derivative liability pursuant to ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”), and are classified within Level 3 of the fair value hierarchy as the Company is using the BSM option pricing model.
•The May 2025 Convertible Note, issued for non-employee services, is classified as a liability under ASC Topic 718 and measured at fair value. The May 2025 Convertible Note is classified within Level 3 of the fair value hierarchy as the Company is using a convertible bond pricing model to calculate fair value. Key assumptions used to determine the fair value of the May 2025 Convertible Note as of December 31, 2025, were as follows:
Expected term (years) 0.96
Stock price $ 4.87
Risk-free rate 3.49 %
Dividend yield — %
•Fair Value Option (“FVO”) permitted under ASC Topic 825 for the May 2025 Loan. The May 2025 Loan is classified within Level 3 of the fair value hierarchy as the Company is using a convertible bond pricing model to calculate fair value. Prior to extinguishment in 2025, the May 2025 Loan was measured at fair value based on the expected settlement amount of the loan.
•The AIR Warrants are classified as a liability under ASC Topic 480 and measured at fair value. The AIR Warrants are classified within Level 3 of the fair value hierarchy because their fair value is determined using an option pricing model that incorporates significant unobservable inputs, including expected stock price volatility and the discount rate on the underlying junior convertible notes. The Company calculates the fair value by weighting two different approaches. Key assumptions used to determine the fair value of the AIR Warrants as of December 31, 2025, were as follows:
Underlying Investor Warrants (BSM) Junior Convertible Notes
Expected term (years) 5.00 0.92
Dividend yield — % — %
Discount rate on the note 78.64 % 78.64 %
Exercise price of AIR Warrants (millions) $ 3.7 $ 3.7
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Note 2. Summary of Significant Accounting Policies (cont.)
•The ELOC Pre-funded Warrants are classified as a liability under ASC Topic 815 and measured at fair value. The ELOC Pre-funded Warrants are classified within Level 3 of the fair value hierarchy because the number of shares issuable upon exercise is subject to contingent variability, which requires management’s estimate of the probability that the trigger will not occur. The Company estimated the fair value of the warrants based on the per share fair value of the Class A common stock at issuance and upon exercise, less the $0.00001 exercise price, multiplied by the current (non-contingent) number of shares.
The primary significant unobservable input used in the valuation of the warrants and convertible notes is expected stock price volatility. Expected stock price volatility is based on the actual historical volatility of a group of comparable publicly traded companies observed over a historical period equal to the expected remaining life of the instruments. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal to the remaining expected life of the instruments. The expected term was based on the maturity of the instruments, which is 5 years for Class A common stock warrants and 1.5 years for Class B common stock warrants. The dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the instruments. There were no transfers between levels of input during the years ended December 31, 2025 and 2024.
The change in fair values of liabilities subject to recurring remeasurement were as follows:
Principal payment — (101) — — —
Extinguishment — (912) — — —
Exercise — — — — (414)
Warrant Liability
Certain of the Company’s private warrants and stock purchase warrants are recorded as derivative liabilities pursuant to ASC Topic 815, including the ELOC Pre-funded Warrants, or liabilities pursuant to ASC Topic 480, including the AIR Warrants, and are classified within Level 3 of the fair value hierarchy as the Company uses significant unobservable inputs is using the BSM option pricing model, or other appropriate valuation techniques, to calculate fair value. See Note 9 for additional information. Significant unobservable inputs, prior to the Company’s stock being publicly listed, included stock price, volatility and expected term. At the end of each reporting period, changes in fair value during the period are recognized as components of other income within the consolidated statements of operations. The Company will continue to adjust the warrant liability for changes in fair value until the earlier of (i) the exercise or expiration of the warrants or (ii) the redemption of the warrants, at which time the warrants will be reclassified to additional paid-in capital within the consolidated statements of stockholders' equity (deficit).
The warrants issued by Momentus Inc. prior to the Business Combination were exercised in connection with the Business Combination and as a result, the Company performed a fair value measurement of those warrants on the Closing and recorded the change in the instruments’ fair values prior to converting them to equity. The warrants assumed by the Company as a result of the Business Combination remain outstanding.
Public and Private Warrants
Prior to the Business Combination, SRAC issued 903 private placement warrants (“Private Warrants”) and 691 public warrants (“Public Warrants” and, collectively with the Private Warrants, the “Public and Private Warrants”). Each whole warrant entitles the holder to purchase one share of the Company’s Class A common stock at a price of
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$143,693 per share, subject to adjustments and will expire five years after the Business Combination or earlier upon redemption or liquidation.
The Private Warrants do not meet the derivative scope exception and are accounted for as derivative liabilities. Specifically, the Private Warrants contain provisions that cause the settlement amounts to be dependent upon the characteristics of the holder of the warrant which is not an input into the pricing of a fixed-for-fixed option on equity shares. Therefore, the Private Warrants are not considered indexed to the Company’s stock and should be classified as a liability. Since the Private Warrants meet the definition of a derivative, the Company recorded the Private Warrants as liabilities on the consolidated balance sheets at fair value upon the Closing, with subsequent changes in the fair value recognized in the consolidated statements of operations at each reporting date. The fair value of the Private Warrants was measured using the BSM option pricing model at each measurement date.
In addition, the Public Warrants are accounted for as equity classified by the Company. On consummation of the Business Combination, the Company recorded equity related to the Public Warrants of $20.2 million, with an offsetting entry to additional paid-in capital. Similarly, on the consummation of the Business Combination, the Company recorded a liability related to the Private Warrants of $31.2 million, with an offsetting entry to additional paid-in capital.
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 815, at the initial recognition.
Other than the Public and Private Warrants noted above, the Company also had other warrants issued and outstanding which were recognized as derivative liabilities in accordance with ASC Topic 815 until they were fully exercised. Accordingly, the Company recognized the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period until exercised. The fair value of the warrant liabilities issued were initially measured using the BSM option pricing model, or other appropriate valuation techniques, and were subsequently remeasured at each reporting period with changes recorded as a component of other income in the Company’s consolidated statements of operations. Derivative warrant liabilities are classified as non-current as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. See Note 9 for additional information.
Equity Classified Warrants
Subsequent to the Business Combination, the Company has issued warrants in conjunction with various securities purchase agreements and borrowings (see Note 8 and Note 9 for additional information). The warrants are freestanding equity-linked instruments that meet the indexation and equity classification criteria of ASC Sub‐Topic 815-40.
The grant-date fair value of these warrants is recorded in additional paid-in capital on the consolidated balance sheets. The fair value of the warrants are measured using the BSM option pricing model on the grant date.
Modification of Equity Classified Warrants
A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC Topic 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt offering, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications, the incremental change in fair value is recognized as a deemed dividend.
Convertible Instruments
The Company evaluates its convertible debt issuances to determine if those contracts or embedded components of those contracts qualify as derivatives requiring separate recognition in the Company’s financial statements. Entities
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must consider whether to classify contracts that may be settled in the Company’s own stock, such as warrants, as equity of the entity or as an asset or liability. If an event that is not within the entity’s control could require net cash settlement, then the contract should be classified as an asset or a liability rather than as equity. Convertible instruments issued for non-employee services, such as the May 2025 Convertible Note, are classified as liabilities under ASC Topic 718 if cash settlement is possible, measured at fair value each reporting period with changes in fair value recognized in operating expenses (see Note 8).
If the embedded conversion options do not require bifurcation, the Company then evaluates for the existence of a beneficial conversion feature by comparing the fair value of the Company’s underlying stock as of the commitment date to the effective conversion price of the instrument (the intrinsic value).
Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption and are classified in interest expense in the consolidated statements of operations. For liability-classified convertible instruments under ASC Topic 718, no debt discount is recorded, as fair value remeasurement captures all value changes.
Amendments to convertible instruments are evaluated as to whether they should be accounted for as a modification of the original instrument with no change to the accounting or, if the terms are substantially changed, as an extinguishment of the original instrument and the issuance of a new instrument.
Fair Value Option for Convertible Debt
The Company elected the FVO for recognition of its convertible debt issued to J.J. Astor & Co., as permitted under ASC Topic 825, Financial Instruments (see discussion of the May 2025 Loan in Note 8). Under the FVO, the Company recognizes the convertible debt at fair value with changes in fair value recognized in earnings. The FVO may be applied instrument by instrument, but it is irrevocable. As a result of applying the FVO, any direct costs and fees related to the convertible debt is recognized in operating expense in the consolidated statements of operations as incurred and not deferred. Changes in fair value of the convertible debt are recognized as a separate line in the consolidated statements of operations and comprehensive loss.
Equity Issuance Costs
The Company incurs costs related to the issuance of equity securities. These costs are initially recorded as a prepaid asset under ASC Topic 340 and reclassified to additional paid-in capital as the related equity is earned through service delivery, or amortized to expense, typically research and development, based on the service period or delivery pattern.
Basic and Diluted Loss Per Share
Net loss per share is provided in accordance with ASC Sub-Topic 260-10, Earnings per Share. Basic net loss per share is computed by dividing losses by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive. See Note 11 for additional information.
Impairment of Long-lived Assets
The Company evaluates the carrying value of long-lived assets, which includes intangible assets, on an annual basis, or more frequently whenever circumstances indicate a long-lived asset may be impaired. When indicators of impairment exist, the Company estimates future undiscounted cash flows attributable to such assets. In the event cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair value. During the years ended December 31, 2025 and 2024, there were no impairments of long‐lived assets. See Note 4 and Note 5 for additional information.
Stock-based Compensation
The Company has a stock incentive plan under which equity awards are granted to employees, directors, and consultants. The Company also issues equity or liability instruments, such as convertible notes, to non-employees for services under ASC Topic 718, which are measured at fair value at issuance and, for liability-classified instruments, remeasured each reporting period with changes in fair value recognized in operating expenses. All
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stock-based payments are recognized in the consolidated financial statements based on their respective grant date fair values.
RSU fair value is based on our closing stock price on the day of the grant. Stock option fair value is determined using the BSM option pricing model. The model requires management to make a number of assumptions, including expected volatility of the Company’s stock, expected life of the option, risk-free interest rate, and expected dividends. For non-employee awards, such as the May 2025 Convertible Note and shares issued in relation to the VLD MSA (defined in Note 9), fair value is determined using valuation models (e.g., Black-Scholes or similar) with unobservable inputs like volatility and discount rates, and liability-classified awards are remeasured until settlement (see Note 8). Employee Stock Purchase Plan (“ESPP”) compensation fair value is also determined using the BSM option pricing model, using a six-month expected term to conform with the six month ESPP offering period.
The grant-date fair value of equity awards is expensed over the related service period which is typically the vesting period, and expense is only recognized for awards that are expected to vest. The Company accounts for forfeitures as they occur.
401(k) Plan
The Company has a 401(k) plan that it offers to its full-time employees. The Company did not contribute to the plan during the years ended December 31, 2025 and 2024.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs include activities to develop existing and future technologies for the Company’s vehicles. Research and development activities include basic research, applied research, design, development, and related test program activities. Costs incurred for developing our vehicles primarily include equipment and labor hours (both internal and subcontractors).
Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities related to an executory contractual arrangement are deferred and capitalized. These advance payments are recognized as an expense as the related goods are delivered or services performed. When the related goods are no longer expected to be delivered or services rendered, the capitalized advance payment is charged to expense.
Leases
The Company determines if an arrangement contains a lease at inception based on whether there is an identified property, plant or equipment and whether the Company controls the use of the identified asset throughout the period of use.
Operating leases are included in the accompanying consolidated balance sheets. Operating lease right‐of‐use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease and are included in current and non-current liabilities. Operating lease ROU assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for borrowings with a similar term.
The Company’s operating lease ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred, and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable lease payments are recognized in the period in which the obligation for those payments is incurred. In addition, the Company elected the practical expedient such that it does not recognize ROU assets or lease liabilities for leases with a term of
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12 months or less of all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term. SeeNote 6 for additional details on the Company’s leases.
Income Taxes
The Company accounts 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, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the “more likely than not” threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. 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.
Concentrations of Risk
Financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents in banks that management believes are creditworthy, however deposits may exceed federally insured limits.
Segment Reporting
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. In consideration of ASC Topic 280, Segment Reporting (“ASC Topic 280”), we are not organized around specific services or geographic regions.
Our chief operating decision maker (“CODM”) uses financial information to evaluate our performance, which is the same basis on which our results and performance are communicated to our Board of Directors. All of the Company’s long-lived assets are held domestically in the United States and of the $1.1 million of revenue recognized by the Company during the year ended December 31, 2025, 10% was derived from customers domiciled in foreign countries. Based on the information described above and in accordance with the applicable literature, management has concluded that we are organized and operated as one operating and reportable segment.
Recently Issued Accounting Standards
Although there are several new accounting pronouncements issued or proposed by the FASB, which have been adopted or will be adopted as applicable, management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial position or results of operations.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). The amendments in this ASU are expected to clarify or improve disclosure and presentation requirements of a variety of ASC topics by aligning them with the SEC’s regulations. ASU 2023-06 will become effective for each amendment on the effective date of the SEC’s corresponding disclosure rule changes, which must occur by June 30, 2027, or the amendments will not take effect. The Company does not anticipate that the adoption of ASU 2023-06 will have a material impact on its consolidated financial statements and related disclosures.
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Note 2. Summary of Significant Accounting Policies (cont.)
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) (“ASU 2024-03”), that requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The amendments in ASU 2024-06 will be applied prospectively with the option for retrospective application and early adoption is permitted. The Company is in the process of evaluating the potential impact that ASU 2024-03 will have on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270)—Narrow-Scope Improvements (“ASU 2025-11”), which provides a clearer framework and more consistent application of interim disclosure requirements for public business entities. The guidance is effective for interim periods within annual periods beginning after December 15, 2027. The amendments in ASU 2025-11 will be applied prospectively with the option for retrospective application and early adoption is permitted. The Company does not anticipate that the adoption of ASU 2025-11 will have a material impact on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements (“ASU 2025-12”), which refines existing guidance to further enhance the interpretation and application of the Codification. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2026. The amendments in ASU 2025-12 will be applied prospectively with the option for retrospective application and early adoption is permitted. The Company does not anticipate that the adoption of ASU 2025-12 will have a material impact on its consolidated financial statements and related disclosures.
Recently Adopted Accounting Standards
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC Topic 280 on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024. See Note 15, Segment and Geographic Information, in the accompanying notes to the consolidated financial statements for further detail.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), that addresses requests for improved income tax disclosures from investors that use the financial statements to make capital allocation decisions. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2024. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application and early adoption is permitted. The Company adopted ASU 2023-09 on January 1, 2025, on a retrospective basis, which did not have a material impact on its consolidated financial statements and related disclosures.
In March 2024, the FASB issued ASU 2024-02 which removes references to the Board’s concepts statements from the FASB ASC. The ASU is part of the Board’s standing project to make “Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements.” The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. The Company adopted ASU 2024-02 on January 1, 2025, which did not have a material impact on its consolidated financial statements and related disclosures.
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Note 3. Prepaids and Other Current Assets
Prepaids and other current assets consisted of the following:
Prepaid launch costs, current $ 5,087 — $ —
Prepaid design and production services, current 1,538 —
Prepaid insurance and other current assets 2,696 1,667
As of December 31, 2025 and 2024, the non-current portion of prepaid launch costs recorded in other non-current assets was approximately $1.2 million and $2.6 million, respectively, and the non-current portion of prepaid design and production services recorded in other non-current assets was approximately $7.0 million and zero, respectively. During the year ended December 31, 2025, the Company recognized a $1.7 million impairment charge related to prepaid design and production services in other expense in the accompanying consolidated statements of operations.
Note 4. Property, Machinery and Equipment
Property, machinery and equipment, net consisted of the following:
Computer equipment $ 21 $ 10
Property, machinery and equipment, gross 5,251 5,240
Less: accumulated depreciation (4,298) (3,058)
Property, machinery and equipment, net $ 953 $ 2,182
Depreciation expense related to property, machinery and equipment was $1.2 million and $0.8 million for the years ended December 31, 2025 and 2024, respectively. Depreciation expense is recorded within operating expenses.
Note 5. Intangible Assets
Intangible assets, net consisted of the following as of December 31, 2025:
Intangible assets, net consisted of the following as of December 31, 2024:
Amortization expense related to intangible assets was $0.1 million and $0.1 million for the years ended December 31, 2025 and 2024, respectively.
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