Momentus Space Faces Imminent Nasdaq Delisting Amid Financial Struggles

Momentus is on the verge of being delisted from the Nasdaq stock exchange due to persistent financial challenges, including a low share price and regulatory compliance issues.

In a filing with the U.S. Securities and Exchange Commission (SEC) on September 26, Momentus revealed that Nasdaq had notified the company it would suspend trading of its shares at the start of business on October 3, unless the company appeals by October 1.

Momentus first received a warning from Nasdaq in March, stating it had 180 days to increase its share price to a minimum of $1 per share to remain listed on the Nasdaq Capital Market. While the company briefly achieved this threshold in late August, its share price quickly dropped back below $1, failing to meet Nasdaq’s sustained price requirement.

As of September 30, Momentus shares closed at just $0.44.

Ordinarily, companies in such a situation can request a 180-day extension to regain compliance. However, Nasdaq ruled that Momentus was not eligible for an extension because it failed to meet the exchange’s minimum stockholders’ equity initial listing requirements. Additionally, the company’s failure to file both annual and quarterly reports with the SEC has created separate grounds for delisting.

In its SEC filing, Momentus stated its intention to appeal Nasdaq's decision and seek a hearing with a Nasdaq panel. This move would delay any delisting until the panel issues a decision. The company also said it plans to present a compliance plan, likely including a reverse stock split to consolidate shares and boost the stock price above $1. However, specific details of the plan were not disclosed.

Financial Troubles and Operational Delays

Momentus has been grappling with financial instability for some time.

In January, the company announced it was indefinitely postponing its next Vigoride mission and laying off 20% of its workforce to reduce its cash outflow. This followed a larger round of layoffs in mid-2023. Since January, the company has not launched any missions.

Despite these setbacks, Momentus has secured some new contracts. One such agreement, with the Defense Advanced Research Projects Agency (DARPA), involves studying large-scale space structures under the Novel Orbital and Moon Manufacturing, Materials, and Mass-efficient Design (NOM4D) program. The contract could lead to flying experiments on future Vigoride missions, though the financial terms remain undisclosed.

In another development, Momentus was among three companies added to NASA's Venture-Class Acquisition of Dedicated and Rideshare (VADR) contract in late August, enabling it to compete for future task orders for launching small satellite missions.

However, the company has yet to announce significant new deals for its satellite buses, which are based on the Vigoride platform.

Fundraising and Future Outlook

On September 16, Momentus raised $2.75 million in a private placement with an unnamed institutional investor. According to the company, this funding will be used for "general corporate purposes."

"We continue to raise money incrementally,...continue to grow the business." - John Rood, Momentus CEO

Rood also conceded that the company's original vision—providing orbital transfer vehicles to move satellites to precise orbits—has not materialized as planned.

"The in-space mobility, logistics, and transportation market has not developed quite to the extent that I think it will by 2030," - John Rood, Momentus CEO

Momentus has since shifted its focus to offering satellite buses based on the Vigoride platform. However, the company has not secured any major contracts for these buses and lost a bid in a Space Development Agency competition late last year.

The company also disclosed in a recent SEC filing that it may convert its indefinitely delayed Vigoride-7 tug into a satellite bus.

Despite the struggles, Rood remains optimistic about the long-term potential of the in-space transportation market; citing future opportunities like debris removal and mass satellite deployment from large launch vehicles, such as SpaceX’s Starship.

Reflecting on the challenges Momentus has faced, he added,

"I feel like we’ve gone through a lot of the growing pains that tech companies traditionally do. It is a great experience, but it is not for the meek or the faint of heart." - John Rood, Momentus CEO

Uncertain Path Ahead

As Momentus moves toward its Nasdaq hearing, the company’s future remains uncertain.

While it continues to seek new contracts and raise funds, the broader in-space transportation market has yet to develop in line with earlier expectations. Whether the company can navigate its financial challenges and avoid delisting will depend largely on its ability to stabilize its stock price and regain compliance with regulatory requirements.

For now, Momentus faces a critical test as it prepares for its hearing and attempts to secure a future in an emerging, yet unpredictable, market.