Momentus Announces $5 Million Offering Priced At-The-Market Under Nasdaq Rules

Rhea-AI Summary

Momentus (NASDAQ: MNTS) has announced a $5 million offering priced at-the-market, involving the sale of 1,273,886 shares of common stock and warrants to a single institutional investor. The combined purchase price is set at $3.925, with warrants exercisable at $3.80 per share for a 5-year period.

The offering is expected to close around February 11, 2025. A.G.P./Alliance Global Partners is serving as the sole placement agent. The company plans to use the proceeds for general corporate purposes.

Additionally, Momentus will amend existing warrants for 2,228,572 shares, reducing their exercise price to $3.80 per share. This includes Class A and B September 2024 Warrants, October 2024 Warrant, and December 2024 Warrant. The amendment requires stockholder approval, with specific provisions if approval isn't obtained within six months.

Positive

• Secured $5 million in immediate financing through stock offering
• Warrant exercise price reduction could incentivize warrant exercise, potentially bringing additional capital

Negative

• Offering price of $3.925 represents significant dilution for existing shareholders
• Reduction of warrant exercise prices from $6.08-$8.05 to $3.80 indicates declining stock value
• Additional dilution potential from 2,228,572 shares of amended warrants

Insights

Financial Analyst

The $5 million offering by Momentus reveals concerning signals about the company's financial position and capital needs. The structure of this deal is particularly noteworthy for several reasons:

1. The pricing at $3.925 per unit represents minimal premium to market, suggesting negotiating leverage with institutional investors. The immediate dilution from the 1,273,886 new shares represents approximately 12% of the current market cap.

2. More significantly, the warrant modifications are highly dilutive. The company is adjusting 2,228,572 existing warrants down to a $3.80 exercise price from much higher levels ($6.08-$8.05), representing a substantial concession to warrant holders and additional potential dilution of about 21% if fully exercised.

3. The structure suggests urgency in raising capital, as companies typically avoid repricing existing warrants unless necessary. The 5-year extension of warrant terms further indicates a need to offer significant incentives to secure this financing.

The combination of new shares, warrants and modifications to existing warrants could result in total potential dilution exceeding 33% of current shares. While the immediate cash injection provides some runway, the terms of this financing suggest challenging market conditions for space infrastructure companies and raises questions about Momentus's ability to secure more favorable terms in future capital raises.

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 the pricing of its “reasonable best efforts” offering with a single institutional investor for the purchase and sale of 1,273,886 shares of its common stock (or common stock equivalents in lieu thereof) and warrants to purchase up to 1,273,886 shares of common stock at a combined purchase price of $3.925 (the “Offering”). The warrants will have an exercise price of $3.80 per share, will be immediately exercisable and will expire 5 years from the initial exercise date.

The closing of the Offering is expected to occur on or about February 11, 2025, subject to the satisfaction of customary closing conditions. The gross proceeds from the Offering are expected to be approximately $5 million, before deducting placement agent fees and other estimated offering expenses. The Company intends to use the net proceeds from the Offering for advancement for general corporate purposes.

A.G.P./Alliance Global Partners is acting as sole placement agent for the Offering.

The securities described above are being offered pursuant to a registration statement on Form S-1, as amended (File No. 333-284393), previously filed with the Securities and Exchange Commission ("SEC"), which was declared effective on February 10, 2025. The Offering is being made only by means of a prospectus forming part of the effective registration statement. Copies of the preliminary prospectus and, when available, copies of the final prospectus, relating to the Offering may be obtained on the SEC’s website located at http://www.sec.gov. Electronic copies of the final prospectus relating to the Offering 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 2,228,572 shares of common stock will be amended such that the warrants will have a reduced exercise price of $3.80 per share. The Class A September 2024 Warrant of 714,286 shares of common stock at an exercise price of $8.05 per share, the Class B September 2024 Warrant of 357,143 shares of common stock at an exercise price of $8.05 per share, the October 2024 Warrant of 357,143 shares of common stock at an exercise price of $8.05 per share, and the December 2024 Warrant of 800,000 shares of common stock at an exercise price of $6.08 per share, will be amended such that the warrants will have a reduced exercise price of $3.80 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 (6) months following the initial date of issuance of the warrants and the warrants will expire five years following the date that is six (6) 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 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 that 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, the intended use of proceeds 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 June 6, 2024, 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 https://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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250210162733/en/

Investors: investors@momentus.space

Media: press@momentus.space

Source: Momentus Inc.

FAQ

How much did Momentus (MNTS) raise in their February 2025 offering?

Momentus raised $5 million through an at-the-market offering of common stock and warrants to a single institutional investor.

What is the exercise price for the new MNTS warrants issued in February 2025?

The new warrants have an exercise price of $3.80 per share and will expire 5 years from the initial exercise date.

How many existing MNTS warrants are being amended to lower exercise prices?

Existing warrants for 2,228,572 shares are being amended to reduce their exercise price from $6.08-$8.05 to $3.80 per share.

When will the Momentus (MNTS) February 2025 offering close?

The offering is expected to close on or about February 11, 2025, subject to customary closing conditions.

What happens if MNTS shareholders don't approve the warrant amendments?

If shareholder approval isn't obtained within six months, the warrant exercise price will automatically reduce to the Minimum Price as defined in Nasdaq Listing Rule 5635(d).