Momentus Announces Closing of $4.0 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

Momentus Inc. announced the closing of a registered direct offering with a single institutional investor, resulting in gross proceeds of approximately $4.0 million. The offering included the purchase and sale of 3,687,000 shares of common stock and warrants to purchase up to an aggregate of 3,687,000 shares of common stock. Additionally, existing warrants to purchase up to 5,808,538 shares were amended to have a reduced exercise price of $0.96 per share, subject to stockholder approval. The offering is made pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC.

Positive

• None.

Negative

• The offering resulted in a reduced exercise price for existing warrants, subject to stockholder approval, which may impact the value of the shares for current shareholders.

Financial Analyst

The direct offering conducted by Momentus Inc. represents a strategic move to raise capital, with the sale of shares and issuance of warrants designed to provide the company with immediate liquidity. This transaction is critical to their financial strategy, allowing the company to bolster its balance sheet and fund ongoing operations or potential expansions. The offering's pricing at $1.085 per share, slightly below the current market price, could indicate the company's urgency in raising funds or a concession to the institutional investor for a bulk purchase. The decision to amend existing warrants, subject to stockholder approval, to a reduced exercise price of $0.96 is noteworthy. This amendment could be an incentive to keep current investors engaged and potentially reduce financing costs if the warrants are exercised.

Investors should consider the dilutive effect of such offerings on existing shareholders. The increase in the number of shares outstanding can lead to earnings per share dilution, which might impact the stock price negatively in the short term. However, if the capital raised is utilized effectively for growth initiatives that enhance the company's value proposition, it could lead to long-term benefits for shareholders. The role of A.G.P./Alliance Global Partners as the sole placement agent suggests a targeted approach to the capital raise, focusing on specific institutional investors rather than a broader public offering.

Market Research Analyst

From a market perspective, Momentus Inc.'s recent capital raise through a direct offering can be interpreted as a signal of the company's current position and future prospects within the commercial space industry. The space sector is capital-intensive, with high barriers to entry and long gestation periods before achieving profitability. The funds obtained may enable Momentus to maintain its competitive edge in the satellite buses and in-space infrastructure services market. It is essential to analyze how this capital will be deployed to drive innovation, secure contracts and ultimately lead to revenue generation.

The fact that the offering is priced at-the-market suggests that Momentus is aligning the offering price with current market valuations, which may be seen as a positive sign of transparency for investors. However, the market's reaction to such offerings can be mixed, as it balances the potential for future growth against the immediate dilution of shares. Monitoring the performance of Momentus' stock post-offering will provide insights into investor sentiment and confidence in the company's strategic direction.

Legal Expert

The legal implications of Momentus Inc.'s registered direct offering are multifaceted. The use of a shelf registration statement on Form S-3 indicates that Momentus had previously filed with the SEC, allowing for a more expedited process of offering securities. This suggests that the company had planned for potential future financing needs. The requirement for stockholder approval for the amendment of existing warrants demonstrates a commitment to corporate governance and shareholder rights. However, the automatic reduction of the exercise price to the Minimum Price, as defined in Nasdaq Listing Rule 5635(d), if stockholder approval is not obtained within the stipulated timeframe, introduces an element of risk for both the company and its investors.

The stipulation that the offering shall not constitute an offer to sell or a solicitation of an offer to buy these securities in any jurisdiction where such activity would be unlawful ensures compliance with state and federal securities laws. It is important for investors to understand the legal framework governing such transactions, as it can affect the timing, structure and potential success of the offering.

SAN JOSE, Calif.--(BUSINESS WIRE)-- Momentus Inc. (NASDAQ: MNTS) (“Momentus” or the “Company”), a U.S. commercial space company that offers satellite buses, transportation, and other in-space infrastructure services, today announced that it has closed its previously announced registered direct offering priced at-the-market under Nasdaq rules with a single institutional investor for the purchase and sale of 3,687,000 shares of common stock (or common stock equivalents in lieu thereof) at a purchase price of $1.085 per share, resulting in total gross proceeds of approximately $4.0 million before deducting placement agent commissions and other estimated offering expenses. The Company further agreed to issue to the investor warrants to purchase up to an aggregate of 3,687,000 shares of common stock. The warrants have an exercise price of $0.96 per share, are exercisable immediately and expire after five years.

A.G.P./Alliance Global Partners acted as the sole placement agent for the offering.

This offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No 333-267230) previously filed with the U.S. Securities and Exchange Commission (the “SEC”). A final prospectus supplement describing the terms of the proposed offering has been filed with the SEC and is available on the SEC's website located at http://www.sec.gov. Electronic copies of the prospectus supplement may be obtained, when available, from A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.

The Company also has agreed that certain existing warrants to purchase up to an aggregate of 5,808,538 shares at an exercise price of $3.862 per share have been amended so that the amended warrants will have a reduced exercise price of $0.96 per share. The warrant amendment is subject to stockholder approval, and the warrants shall expire five years from the date stockholder approval is obtained. If stockholder approval is not obtained by the date that is six months following the initial date of issuance of these warrants, then the exercise price of the warrants will automatically be reduced to the Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) of the common stock on the date that is six months following the initial date of issuance of the warrants and the warrants will expire five years following the date that is six months following the initial date of issuance of the warrants.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Momentus

Momentus is a U.S. commercial space company that offers commercial satellite buses and in-space infrastructure services including in-space transportation, hosted payloads, and other in-orbit services.

Forward-Looking Statements

This press release contains certain statements which may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements regarding the expected closing of the offering and fulfillment of customary closing conditions, Momentus or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, and are not guarantees of future performance. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Momentus’ control. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to risks and uncertainties included under the heading “Risk Factors” in the Annual Report on Form 10-K filed by the Company on March 8, 2023, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC’s website at www.sec.gov and the Investor Relations section of our website at investors.momentus.space. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

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Investors:

investors@momentus.space

Media:

press@momentus.space

Source: Momentus Inc.

FAQ

What was the purchase price of the shares in the direct offering?

The purchase price of the shares in the direct offering was $1.085 per share.

How many shares of common stock were included in the offering?

The offering included 3,687,000 shares of common stock.

What is the exercise price of the warrants issued to the investor?

The warrants have an exercise price of $0.96 per share and are exercisable immediately.

What is the total gross proceeds of the offering?

The offering resulted in total gross proceeds of approximately $4.0 million.

What type of registration statement was the offering made pursuant to?

The offering was made pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC.