WASHINGTON — Momentus recently cut its workforce by 30% as the cash-strapped company seeks to reduce its costs while looking for “strategic options” to raise funding.
In an Aug. 14 earnings call about its second quarter financial results, Eric Williams, chief financial officer of Momentus, said that the company reduced its headcount, including both full-time employees and contractors, by 30% late in the second quarter. The move, he said, was designed to “substantially reduce our burn rate while retaining the talent we need to execute our key near-term initiatives.”
He did not go into further details about the layoffs, including the staff affected. The company said in its 10-Q filing with the U.S. Securities and Exchange Commission Aug. 14 that it laid off 18 employees on July 3 “to enable us to help achieve a more cost-efficient organization necessary to increase the cash runway of the Company.” Williams said on the call that the company expected to start realizing those cost reductions in the third quarter, but did not quantify them.
“We’re pushing on it fairly hard to be able to get as much runaway as we can out of that,” John Rood, chief executive of Momentus, said of those cost reductions later in the call.
Momentus reported a record quarterly revenue of $1.7 million in the second quarter, the first time it reported revenues of more than $1 million in a quarter. However, the company reported a net loss of $18.8 million and ended the quarter with $21.6 million of cash and equivalents on hand.
As in the previous quarter, Momentus included a “going concern” warning in its financial results because of substantial doubt that it has sufficient funding to continue operations for the next 12 months. Williams acknowledged the warning in the call but noted the company was taking several steps, like the workforce reductions, to extend its cash.
Momentus has also engaged Deutsche Bank as a financial advisor, which he said will help the company as it works “to raise additional capital while pursuing and evaluating strategic alternatives.”
“It is clear that we’ve faced some headwinds in the recent risk-off environment in the market, and seen our stock price reflect that,” Rood said. The company’s shares have traded below $1 for six months, and the company is seeking shareholder approval later this month for a reverse split of between 1-for-30 and 1-for-50 to boost the stock price and avoid delisting from Nasdaq. The company’s shares closed at $0.31 Aug. 15.
Despite the company’s financial difficulties, Rood was upbeat on the call, noting the company’s work flying its Vigoride tugs and a new satellite bus, the M-1000, based on Vigoride that it is offering to the Space Development Agency (SDA) and other potential customers. Momentus separately announced Aug. 14 a Small Business Innovation Research award from SDA valued at nearly $750,000 to tailor the Vigoride tug for Defense Department applications. The contract has an option worth nearly $1.2 million for future work.
“Momentus is pushing ahead on our growth path,” Rood insisted. “We have several promising near-term opportunities in our sweet spot. We are actively seeking new investors while considering the full range of strategic options.”