Q3 2021 Momentus Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to my matches third quarter 2021 earnings call. At this time all participants are in a listen only mode Mirror will that comes back a question and answer session and instructions will follow at that time, if I don't Wanna check should require assistance during the conference. Please press zero when you touch don't telephone.
I would like to turn the conference over to your house Mr. Darryl <unk>. Please go ahead Sir.
Thank you very good afternoon, everyone welcome to the third quarter of 2021.
And our first ever call.
With me here today at 39 O one north Berkeley, and San Jose are corporate headquarters in one of the two things that you might decide.
<unk> Chief Executive Officer of a company and chairman of its board of directors as well as you can Kim Chief financial officer equal provide prepared remarks.
Oh, you need prepared remark will take must be pronounced in the interest of time, we would ask that you limit yourself to one question and one brief Paula earlier.
Earlier today, we issued a press release and made a slide presentation available on our Investor Relations website, which provides an overview of our business and financial highlights for the third quarter you can download a copy of the release and presentation blood at investors that moment this update.
During today's call will make certain forward looking statements within the meaning of affection 27, a of the Securities Act of 1933 and section 21 of the ski jacket 1934 forward looking statements our prediction projections in other statements about future events that are based on current expectations that assumption and as a result are subject to risks and uncertainties.
Many factors could cause actual future events to differ materially from forward looking statements miscommunication.
For more information about factors that may cause actual results to materially different differ from forward looking statements. Please refer to the earnings press release, the issue today as well as the company's filings with the Securities and Exchange Commission.
Readers are cautious not to put undue reliance on forward looking statement and accompanying specifically disclaims any obligation to update the forward looking statements that may be discussed during this call. Please also note that we will refer to certain non-GAAP financial information on today's call you can find reconciliations of the non-GAAP financial measures for the most comparable gap measured in our earnings Brooklyn.
The technology underlying or anticipated service offering is still in Nebraska being developed and has not yet fully tested or validated his face our ability to execute on a business plan is depending on the double development and commercialization of our technology.
<unk> basic dog uses extremely complex time consuming and expensive and there can be no assurance that are predicted theoretical I'm grandbaby resolved will translate is operational space vehicles that operate within the framework respect or at all.
With that I'd like to turn the call over to our chairman and Chief Executive Officer.
Thank you Carol good afternoon, I'm delighted to talk to you on our first Orange call now that we've completed our business combination with stable Rub acquisition Corporation and are listed on the NASDAQ.
This event was an important step toward growing our business and achieving our objective of providing the backbone infrastructure services to support the emerging space economy that continues to experienced impressive growth.
I want to thank you for getting together here on Tuesday, we originally thought about doing this call on Thursday, which is veterans day.
Course on the 11th hour of the 11th day of the 11th month will pass on in our veterans and momentous is pleased to have veterans serving on our team.
I'd like to start this call I think entertainment moment. This as many of you know we face and meet challenges during our <unk> process.
The drive and determination of this team kept us moving forward.
And ultimately allowed us to complete the business combination with stable road, leaving as well capitalized to execute the next phase of our business plan.
Trying to slide three.
Since this is our first stirrings call and some of you are unfamiliar with our story I'll provide an overview of the business or achievements to date, an overview of our adjusted and refocused strategy and how will drive growth going forward.
I'll also talk about our current areas of focus for the remainder of the year and preliminary plans for 2022.
Once I get all my overview, our CFO G Khan Kim will take you through the Q3 financial highlights.
However, before I talk about momentous in our business model since some of you have all the company for Awhile I want to highlight a few new things that have happened over the past few months.
First moment, a side of National Security agreement with the U S government in June of this year and repurchase the two Russian co founders equity in the company.
The co panders, including the company's former CEO have had no involvement with the company since that time.
The defense Department and Treasury Department oversee disagreement and we continue to work closely with them to implement.
Second we populated or executive leadership team and board of directors with high caliber individuals to bring the type of experience and skill sets that we need to grow our business and implement the national Security agreement R. N S. A.
Third under the direction of our new leaders momentous has already made significant progress on NSA implementation.
Of the 62 discrete compliance tasks required under the NSA, we are fully implemented the majority and a partially implemented the remaining items.
<unk> is working hard to put in place many processes to promote consistent compliance with unsc such as it becomes routine.
While this involves the heavy upfront list and many legacy I T systems and internal processes are being replaced by new ones. We believe diligent implementation will create a stable regulatory environment around the company and our activities.
Fourth we settled all outstanding claims with the FCC's enforcement division, which cleared the way for us to complete our business combination was stable road and publicly list our stock.
As part of our settlement, we agreed to hire an independent compliance consultant to provide oversight of our disclosures and ethics programs and engage this consult in about four weeks ago.
Fifth we completed the merger was stable room with a low level of redemptions compared to other recent D specs, providing us unnecessary capital to fuel the continued development of our technology.
<unk> said, we've made significant progress advancing our technology. We've completed the initial assembly and initial system level functional testing of vigor three and drafted a plan to address anomalies uncovered bodies tests remediation plan rework of some components is ongoing the vehicle will soon and.
Or system level thermal vacuum testing, which is late stage testing to simulate the environment in space.
Our initial vehicles that we plan to launch we'll have our current generation thruster design.
However, our propulsion engineers have been hard at work testing in qualifying our next generation thruster design was significant progress made during Q3.
This next generation thruster is being developed to improve efficiency as measured by specific impulse over our current thruster.
This next generation thrust her improves on earlier versions by incorporate several design innovations to the nozzle to extend the thrusters total lifetime.
Seven although outside the Q3 window I'm pleased to report on October 20th 2021, we signed the launch services agreement with Spacex that reserve space for Zig ride on space X is transported five mission, which is targeted for June 2022.
While securing space on the manifest as an important step our.
Our plan to launch in June and the subject to the received licenses and other government approvals, which we believe we are on pace to achieve and successful completion of our current efforts to give the system ready for flight.
Turning to smile for.
Our objective is to become an industry leader, providing the transportation and in space infrastructure services for the burgeoning new Spacey car.
This is our bold vision and achieving it requires a methodical and you're trying to progress points on our journey.
I have adjusted and refocused our strategy.
Into actionable steps that will help build a foundation for the future.
Our strategy, which will drive the decisions and actions we take every day as five elements.
First we'll focus our resources on bringing our initial orbital transfer vehicle ziggurat to market as early as possible with the features and reliability, we know our customers need.
We currently plan to fly our big right vehicle as early as June 2022 subject to receive a licenses and government approvals successful completion of our current efforts to get the system ready for flight and space X mission staying on its current scheduled.
If we're unable to fly Big Rabbit U Penn will do so as early as we were able.
Second we plan to pursue a focused expansion of our service offerings and bring online a reusable version of vigor that we expect will be able to effectively and economically support customer demand for payload hosting and in orbit servicing.
Third will scale up from big right and broaden our service offerings and capabilities.
We plan to complete development of new vehicles, such as art arrive to support missions beyond <unk> orbit like lunar missions with much larger pillows.
For for a technology company and the technology, we've we drink will will be critical to making the best use of space possible.
Our technology developments and continued innovation are at the heart of what we intend to do.
Finally, the last element of our strategy is.
Is to attract develop and retain a highly skilled and motivated workforce to give us a competitive advantage in the industry.
This last element could easily been the first element of our strategy as it's foundational to our success and we need great people to accomplish great things.
Throughout the execution of this strategy will never lose sight of the relationship between customer demand and the technology, we're bringing to market.
Through everything we do will ensure capabilities are aligned with critical customer needs will strive to maintain a strong understanding of our customers needs and I would add that we continue to hear from customers about how our future capabilities will enable them to be part of the vibrant and growing spacey costs.
Turning to slide five.
We have an exceptional team leading the business.
In particular.
I'd like to introduce three new additions to bring extensive experience at the defense department as well as experienced implementing mitigation agreements with <unk> like the one we're currently implementing.
All night is our new Chief legal officer corporate Secretary.
He is nearly four decades of public private sector experience. Most recently he served as the general counsel of the Defense Department, where he led a team of over 12000 lawyers.
He has also served as principal deputy and acting General counsel of the United States Navy and Chief Deputy Attorney General for the state of Tennessee.
Nick Mercado is our security director.
He sits on our board of directors and play the daily role in overseeing implementation of our National Security agreement.
Vick most recently served as assistant Secretary of defense for strategy plants and capabilities, which is a four star civilian equivalent position that is confirmed by the United States Senate.
Before that he served for 35 years in the U S Navy and retired as a two star Admiral.
Current policy is our new Chief Security Officer, and reports to Vic Mercado, She has implemented domestic and international security and compliance programs for companies operating under mitigation agreements recipients similar to ours is 35 years of experience in the tech industry.
In addition to these three people I joined momentous in early August I bring over 20 years of U S government service, including at the Department of Defense, where I was most recently under secretary for policy as well as at the Department of State, where I served as one of six undersecretaries.
I also serve at the White House National Security Council at the Central Intelligence Agency and as a U S Senate staff member.
I've also spent about 10 years in the private sector, including since Lockheed Martin or I served as senior Vice President for Lockheed Martin International bleeding the growth of the company's international business, and Raytheon, where I was vice president of U S business development.
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With this team the company now has the right skill sets and experiences to overcome security related hurdles that it currently faces.
Also on the slider for other names that you'll no doubt recognised if you've followed our story, including the president of the company Doctor Fred Kennedy.
Chief revenue Officer, Don <unk>, Chief Technology Officer, Rock, Schwartz, and Chief Financial Officer <unk> Kim.
Turning to slide six let's look at our business model and plan.
Momentous is a publicly traded pure play space infrastructure company.
Based on our examination of other players in the market, we might be the only publicly traded pure play space infrastructure company the.
The commercialization of space is one of the most exciting opportunities of our time with growth likely to far outpaced that of the broader economy for the foreseeable future.
Our models vertically integrated so we're both the manufacturer and an operator of our spacecraft, which are orbital transfer vehicles or O T V's.
We expect to use these O T V to provide in space services for our customers. We ultimately envision having a family is increasingly larger and more capable O T DS.
S F R. Adjusted strategy Refocuses, our efforts on our initial O T V offering big right.
Our service offerings with Ziggurat initially include in space transportation and last mile up to look my last mile delivery of satellites to test them orbits, which we are planning to begin providing in 2022.
To accomplish this will have to secure all the necessary government approval to submit our launches in 2022, which we believe we are on pace to achieve.
We also plan to provide payload hosting services with more capabilities to come over time, such a satellite refuelling inspection on orbit maintenance and removal of debris and satellite at the end of their useful life.
The combination of larger launch vehicles and smaller satellites.
Cost of delivering that given capability to orbit is significantly decreased.
As access to space becomes more affordable, we expect demand will increase for each space transportation payload hosting and other things based services that we plan to offer.
While other companies hope hope to offer similar services, we believe our proprietary watery plasma propulsion technology will make our approach the lowest cost option for many customers as well as the safest and most environmentally friendly.
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We have some notable commercial arrangements, including our rideshare partnership with Spacex along with the customers and a healthy backlog.
As of September 30th 2021, we've sign contracts for approximately $65 million in backlog or potential revenue.
These include firm as well as optional contracts in general customers have the right to cancel their contracts with the understanding that they will forgo their deposits and other payments.
Turning slide seven.
Our first service to market will be focused on space transportation.
But combining rideshare launch with last mile delivery.
This approach allows us to provide an affordable flexible hub-and-spoke logistics model to transport satellites and cargo too precise <unk> destinations to low Earth orbit.
We believe our approach has the potential to greatly reduce the payment operators launch costs, while also expanding its deployment options.
Turning to slide eight.
This slide shows how big ride can provide tremendous advantages over small dedicated rockets are on more propulsion systems, which are bespoke oversized and constrain the amount of payload that can be deliberate to orbit.
In fact for payloads below 100 kilograms, we anticipate that our transportation service model can reduce our customers launch costs as much as 80% relative to traditional approaches.
A bigger I vehicle is designed to deploy nano cube, and microsatellites anywhere and lower.
We're starting with a single use expendable version of big right, but we expect to eventually transition to a reusable big red vehicle around the middle of the decade.
This will allow a single vehicle to deliver cargo multiple times to multiple orbits reducing manufacturing costs.
Turning to slide nine.
I want to speak for just a minute about the underlying market dynamics screen space transportation.
This line focus on small satellites, which is where much of the growth is taking place before 2018, only a few dozen small satellites for launch per year now several hundred are being large per year.
Most of the small satellites are going to low Earth orbit for example, northern Sky affirm that provides market forecast estimates the market for taking small satellites to low Earth orbit will double over the next three years.
We're developing our big Red vehicles and service offerings to take advantage of these market conditions, including the expected debut larger rockets cost less on a per kilogram basis.
Looking further out on the ride you seem more distant orbitz growing to a larger part of the pie.
We plan to scale the same technologies that we're using for vigorous right to our next generation O T B's, which will be developed to travel further for her.
This suggests that are total addressable market or T. A M could expand by another five to 10 X through the end of the decade as our capabilities grow from services lower orbit.
However in the near term as I said, we're focused on getting her to initial operational capability with vigor.
Our mantra is that we earn the right to expand from big right by successfully demonstrating its capabilities.
Next we're gonna play a quick video that demonstrates how a big red vehicle will deliver transportation services to our customers Darryl is going to narrate the video.
There's a big right.
I need to decide you can see it's pulled it up solar arrays.
These cubes that declares month on top of the vehicle custom.
Customer satellites get loaded inside.
[noise] small staff, which are bigger than Q Sasser, then mounted on the upper deck.
Those are propellant tanks, the coke with water, which makes our vehicle safer and more environmentally friendly compared to most others.
Customer satellite integration takes place at one of our two facilities here in Silicon Valley, and then the bigger I get shipped to the launch site with customers already on board.
This won't happen to be going November.
That's a fucking nine rocket on the launch pad, although we've designed big ride for compatibility with many other launch vehicles since it Mount on a standard as spring interface like the one you see here.
[noise] rocket takes off.
The first day drops away.
<unk> days and takes the payload to lower orbit, where the Ferring open and.
And the satellites begin to separate from a lot of people.
[noise] now the bigger I've vehicle comes off powers up and deploy the solo race.
It really orient itself using its reaction control system and then it fires. It's M. T thrusters to begin his first number which is an altitude change.
[noise] figure I've, then drops off his first customer.
Maneuvers to the next drop off of it.
[noise] the second maneuver is an old <unk>.
[noise] once it gets to the new orbit.
Starts to deploy multiple satellite for constellation.
The bigger I've, then performs a third maneuvers.
This one is an inclination changed.
[noise] more satellites.
More of it.
Sure by the way.
[noise]. So that's the transportation issue, which is our first service that we will provide.
Beyond that will bring online are hosted payload service offering which is described here on slide 11th.
Turning to slide 12, we.
We plan for our future vehicles to provide a range of in orbit services, which are shown on this chart.
Turning to slide 13.
This slide provides an overview of where we stand in production of our first vehicles are so far we've produced two complete bigger I've with two more in production.
Vigor I'd won our first vehicle, which is a 30 watt thruster is fully built in ground tested.
Big rides to and beyond are much larger than big right. One big Red too is designed to be capable of carrying larger payloads with much more powerful with a much more powerful 551 thruster.
Big Red too is now fully built ins completed most of its grand testing program.
We've learned a significant amount from production of these initial vehicles that we plan to retain the storage and potentially used for testing as we apply the lessons learned future big right vehicles that we plan to fly.
As I mentioned initial assembly invigorate three was completed and the vehicle is undergoing some rework falling initial system level testing and it will soon undergo thermal vacuum testing. This will be followed by final vibration testing. Another ground tests, we expect big rug three to be fully qualified in the first half of the.
A year before our planned inaugural watch.
This inaugural launches intended to be a demonstration mission.
We also plan to take some customer pillows to orbit into generate a small amount of revenue.
However, the primary goals of the mission or a test rig right on orbit learn from any issues that we encounter and take important steps towards establishing the viability of our initial market offerings.
I can't overstate the importance of testing at all stages in the process from ground testing to testing in space you test not only to validate your design, but also to find areas for improvement.
While we would obviously love for our first test in space to go flawlessly and the history of space. It's common to experience issues that you learn from an improvement.
So we're looking at the first opportunity with realistic expectations for him from experience in eager anticipation to find an address any problems that arise.
Beyond our <unk> plan June launch, we're planning to fly Big right again in the second half of 2022. Although this is subject to the same caveat mentioned earlier and our ability to secure space on a launch providers manifest.
Consistent with our refocused strategy that emphasizes first steps first we will to some degree deemphasize are longer term product plan and specifically are larger following vehicles art arrive in February.
To be clear, we still plan to develop these larger vehicles, although development will take place over a longer period than previously anticipated.
So that's our plan as it currently stands although I would note I'm still working through refinements to the 2022 plan with a team and I expect to be able to offer you more details during our fourth quarter earnings call.
With that I'll now turn to our C. F O G com Kim for comments on the Q3 financials and then we'll take questions.
Thank you John before I discuss the third quarter financial results I would like to thank the teams that momentous and stable roads for getting us to a successful close.
Six five please.
On August 12th 2021, momentous completed the reverse merger with stable, though the acquisition Corporation.
Which culminated in lemon as being listed on the NASDAQ.
This transaction provided us with $247 million in gross proceeds.
137 million was provided by stable Rose Trust phone and we raised an additional 110 million from various pipe investors.
We were pleased with the limited amount of redemptions on the trust fun and took this as a positive indicator of investor confidence and know Memphis.
<unk>, one time transaction related costs of 33 million and used another 40 million to repurchase to cofounder shares.
The share repurchase was necessary to comply with the National Security agreement that we signed with the U S government.
It was also highly accretive to existing shareholders.
Net proceeds from the business combination total of 175 million, which capitalize this momentous to execute the initial bases of a long term plan.
At the close of her transaction park ownership structure consisted of the following.
67% is owned by pre clothes momentous equity holders 60.
16% is owned by stable that's public stockholder <unk>.
11% by pipe investors this exclusive back sponsors and 6% ownership by this back sponsors.
Next slide please.
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Our third quarter financial results reflect ongoing progress and investments toward her inaugural large and successful transition to becoming a public company.
We ended the quarter with non-restricted cash and cash equivalents of 178 million and.
And approximately 26.5 million and upstanding gross debt.
Revenue for the quarter totaled 200000 revenue was recognize when a customer terminated the contract for convenience.
The the deposits.
Our cost of goods sold during the third quarter was a credit of 184000. This credit is a reversal couple afford lost reserve that we had previously book for a lost your annuity launch service again.
Customer received a full refund.
Gross profits in the third quarter was 384000 <unk>.
Net loss for the quarter was 5.6 million.
Which included a net $24 2 million and liability Mark to Mark gaze at four 8 million in transaction related expenses.
On the non-GAAP basis, adjusted EBITDA with a negative 15.1 million in the third quarter.
Which was consistent with the second quarter performance, but 7.2 million worse than the third quarter last year.
Please refer to the earnings press release issued today and the reconciliation of adjusted EBITDA to GAAP net income.
R. S. G N a N R&D investments have steadily increased over the prior year.
Or non-GAAP SG&A expenses for the third quarter totaled 6.8 million.
4.1 million higher than the prior Ya.
Non-GAAP R&D expenses for the third quarter totaled 9 million 3.7 million higher than the prior year.
We ended the quarter with approximately 86 million shares outstanding.
With that operator, you're ready for the Q&A portion of this call.
Thank you, Sir ladies and gentlemen, if you have a question at this time. Please press side then the number one key I have touched on Palestine again that let me start then the number one alright housebound.
Your first question comes from the Linus, Mike Mcgarry from wealth research online is okay.
Hi, everyone. Thanks for the time.
<unk> you have a strong pedigree and probably had a lot of different options. Why did you end up choosing to go with him at this.
Well. Thank you for the question, Mike I came here because it's a really exciting time in the space industry I'm excited about the dawn of a new space economy, and the new in space transportation and infrastructure services that I saw momentous developing or something I wanted to be a part of bringing to the market.
Uhm I will say since coming to momentous I continued to see market forecast that show the space economy is expected to expand significantly faster than the overall economy.
When I was evaluating what to do next in my career I looked at some key mega trends they were shaping the industry.
In the space industry, you see larger rockets being brought to market that are leading to lower launchcast per kilogram and.
And satellites are getting smaller increasingly capable, but the smaller satellites that need to be placed in customer orbitz for if they're part of a constellation taken to the right locations.
And so infrastructure services are really needed to fuel this new space economy.
And for this new space economy to flourish. These new infrastructure services need to be closely aligned with customer needs and that's what I saw occurring a momentous and that's where we're placing our efforts that momentous. So I will say I really wanted to be a part of the new space economy I wanted to be a part of this young Tech company.
With the potential to play a very key role in enabling that new space economy, and so I was just attracted to division a momentous and the chance to bring that vision to be a reality.
Got it. Thank you and then John again, you laid out some of the risks, but still seem pretty confident that you're gonna be able to fly in June M. I reading that right and if so what gives you so much confidence in that.
Well thanks for the question, Mike we feel good about our chances to fly in June we're happy to have a strong partner in Spacex. We recently signed to launch services agreement with them that reserve space on the transporter five mission as I mentioned and that mission is targeted to go in June.
We do need to do some additional work between now and then but overall we believe we're on pace, we're really focused our efforts so far firstly, improving our relationship with the with the government and in particular the defense Department.
As I mentioned in my statement, we've made significant progress implementing the NSA, including completion of the majority of the 62 discrete tasks that we needed to accomplish and and in so doing we communicated with the defense Department on a near daily basis.
Work on a bigger I've vehicles was also moving along.
I mentioned some of the progress in my statement on the particular vehicles and the additional production and testing.
The only thing I'd say is anybody that's been in the space industry for awhile knows that nothing is ever 100 per cent Sir.
But based on what we said today, we feel good about where where we're at and that were on a pace to be able to achieve our our first mission next June that is the June of 2022, but between now and then we'll be burning a lot of calories to make sure. We we get to our plan first launch.
Thanks again.
Thank you and next up we have James Radcliffe from Evercore ice I don't want any of open Sir.
Thank you too if I could first of all time could you give us some more color in the sales pipeline like what sort of applications customers are looking for and also some sense of how much of the pipeline is for a.
We went to services like transport customer of its first is more resale of launch capacity.
And secondly on the D O D process.
Could you be making progress there can you talk about what the long pull from the 10th or when it comes to completing all of the 62 items on the NSA. Thanks.
Sure why don't I adjust the second question first.
With respect to the embassy as you mentioned, we're taking that our obligations under the national security agree with very seriously as I mentioned in the statement of the 62 discrete tasks that are required under the NSA. We've we've fully implemented the majority and partially implemented the remaining items.
The remaining work that is that is a heavy lift and is is among the more significant things that we're doing is the insertion of a new I T systems and new processes to improve our security in that regard. While this does involve a pretty heavy upfront lift and made many legacy I T systems and Eric.
Turtle processes are being replaced by new ones, we think by diligent implementation will create a stable regulatory environment around the company and our activities and I will say one near term. This is required to implement the NSA.
Mm cruise cyber security improved information security is something that's gonna make our company more competitive over the long run you're probably seeing like I am all of the instances of cyber instance, in ranch somewhere and other things affecting companies and so while.
While we need to to carry this heavy load initially and there is a significant upfront series of tasks required to get that that new I T security system in place we're committed to doing so and there's a series of other provisions in the NSA that we're gonna need to continue diligently implemented.
Now I need your first question, which was about sort of customer interest in what the trends are in that area.
As you've seen on our backlog is held fairly steady since we filed our S for.
We feel good about the continued customer interest in our company and the type of services. We plan to offer we really do see solid demand from our customers and I think that's why our backlog continues to hold fairly steady they're our customer opportunities. We continue to see in a regular basis that we're continuing to bid.
On once we have the opportunity to fly big right on orbit and demonstrate our capabilities. We would expect to convert more of this customer interest a firm orders and backlog as I mentioned, there's a number of third party market forecast that indicate the total addressable market for space transportation is growing that's likely to continue to be the case.
So overall I think we feel pretty good about where we stand with our customers and the match between their needs and the products were providing in the match between what our company plans are new strategy and these mega trance I mentioned in the industry with lower large costs and smaller more capable satellites, but therefore driving.
A need for space infrastructure services.
A need for space infrastructure services.
Great. Thank you.
Thank you can actually have Addison you from by Spanker line is open.
Thank you and congrats on the the first quarter out the gate Uhm first question is a bit more near term driving kind of a little bit deeper into the regulatory and development program.
I guess sequence of events could you maybe provide.
Some sort of.
Lift or or sequence of how you think the the security arrangement.
And kind of the operational progress will will progress going forward.
I'm kind of into the launch into the Lodge in June So that's the first question.
And then second question more longer term.
Could you maybe compare your M. A T technology for somebody to competitors out there in particular, an electric and chemical space tugs <unk> from my provider standing. It's it's quite a superior solution and it kind of gives you confidence that you've commercialize this which has been kind of a an obstacle in the path. Thanks.
Well, thank you Edison to those questions Uhm I'll take the second one first and you asked about the the technology that we're developing and you know we really think we have a differentiated technology approach at the heart of our vehicle designs is the microwave electrothermal prepare.
Olshan technology your M E T technology. It uses water as a propellant. This is not a new technology in the sense that M. A T technology has been the subject of Ah studies in University labs since the eighties, but were pioneers in commercializing it the technology is particularly well suited for our.
Use case, which is in space last mile transportation, because there's a balance that the M. B T can provide between thrust and propellant deficiency. If you will the power and thrust that's generated by the dresser and its efficiency at using the propellant something you know with a car or something you talk about fuel.
<unk> [noise].
Essentially all of our competitors are using either chemical propulsion system or a pure electric system like a hall thruster and those technologies were developed for other purposes.
And can be used for in space transportation, but not as optimally as can be done with our M E T.
Appear electrical faster like say a hall thruster will require more power to generate the same amount of thrust chemical thruster will have a lower specific impulse than R. M. B T and its efficiency rating, which means the amount of propellant that'll be needed to generate the same amount of thrust.
We believe our Emmy teeth restaurant can be tuned to balance the cost of launch mashed with the opportunity cost of the transit time for our customers also.
And then the choice of water as a propellant also leads to simple reliable low cost designs for our propulsion tank feed system and eventually the whole vehicle itself and and the other advantage. We see is there something inherent safety and using water with low pressure the tags that reduces the risks and hazards very.
Substantially versus chemical proposal propellants and also helps therefore reduce operating costs.
Now your your first question related to what should investors know there's look for.
To things like key milestones or regulatory implementation, what I would say there as soon as we have more work to do on NSA implementation as I mentioned, mainly related to replacement of legacy I T systems and some other internal processes.
We're going to be applying for necessary government approvals from the F. A a and F. C. C. In advance of our June March I mentioned, a big right through three the third vehicle will soon had the thermal vacuum testing, which is meant to simulate the environment and space and how the vehicle.
Counter that environment in the space.
Space environment that we plan to launch two next year after that we're gonna put a big ride three through ground vibration testing, which is meant to simulate the environment. The vehicle account on the launch.
We're going to assemble some of our later modem model vehicles. We're gonna start next after big Red three with Big right five which is the first big ride of our next generation or next block configuration called block two <unk> two that's our latest configuration of the vehicle. We currently plan to <unk>.
The inaugural mission as I mentioned as early as June of 2022, So of course that subject to receipt of the the necessary licenses and other government approvals and successful completion of our our efforts to get the system ready for flight.
We're planning and I I would say to look ahead for a follow on mission in the fall of 2022, and that's subject of course at the same caveat that I, just mentioned as well as our ability to secure space on a launch providers manifest so uhm fair to say in the regulatory area as well as in the technology development.
Production area and our new launch services agreement with Spacex, there's an awful lot going on but those are just some things to look for in the coming months when you fall a momentous.
Awesome I appreciate the insight.
Thank you and next May have Davis <unk> from Barclays No onions, okay.
Good evening, it's gone Canfield on for David Strauss first first question. If you could discuss the cash trajectory of the business and to the extent that you're funded for it to dry production and and also kind of the extent to which you need more cash or can generate more cash for your on right solutions.
Sure David So year to date, we've spent about $8 million per month to the operating cash and you can see that on their cash flow statement.
We do have a series of one off items that we are looking at into the future. We do have a loan repayment to we do have the balance of the S. C C settlement.
As we increase our launch activities, you'll see some milestones going out to to our our our favorite lunch without a vehicle provider.
As well as we do anticipate increased investments at the John talked about on the M. S. A front as well as a legal bills.
On the <unk>, the independent compliance consulting tied to her FCC order.
And the class action lawsuit.
The should be attitude to a run right now some of those investments on the NSA side, yeah, they're kind of nonrecurring in nature. So you'll see a higher spike and then shook vamped out alright overtime.
We have about $178 million in cash at the end of the third quarter and we do see this cash sufficient to carry us give it to the early part of 2023.
Got it thanks for the color just as a follow up can you refresh us on the price per kilogram to Whoa Whoa Earth orbit, that's implied by the bigger I'd vehicle and maybe discuss a little bit about your comments on mid mid decade, Reusability uhm and to the extent that that compares to pricing on kind of.
The larger end of the market as well as some of the aspirational pricing of your small side competitors are you a small set launch competitors.
Okay, Let me try to unpack that question a little bit here. So we we we are seeing roughly $15000 per kilogram to low Earth orbit and we've seen that historically in the past and that's been you know <unk>, what I would classify as our standard pricing.
Model.
Now the market dynamics is getting a little more competitive.
And we do see challenges, but we are you know so entertaining many of our customers and our backlog remains relatively stable.
So that's I think that was part of your question can you reiterate the second part of your question.
Sure. So so just thinking about how that $15000 per kilogram pillow Earth orbit, how does that compare to maybe the current market as well as some of the aspirational pricing of of the small set launch providers.
Yeah, John are you familiar with the small set launch providers milk pricing.
I don't know the specific numbers, but heart, yeah, well, we'll have to get back to you on the small that you were talking about the small launch vehicle providers right.
Sure sure So Astra rocket lab relativity.
Yeah, I I think from I mean, again from a mission standpoint, and a dedicated launch to Leo you're gonna find the larger launch vehicle providers much more economical, but and I don't have the specifics on on the small but that'll do you have any <unk>. Yeah. This girl, so I think I mean in Iraq.
Electron rocket I think cost about $7 million.
You know if you fill it.
You can you can get the price down to sort of 25, $30000 a program, but but by and large you don't feel it right. So if you're if you're taking the example that we often cited the hundred kilogram payload.
Would you like the bigger than most of what we see but if you have 100 kilogram payload go into orbit, you're only going to fill about 40 or so percent of that rocket love rocket and you know you're gonna end up paying $78000 per program for that so I think that's one one data point that I'd for throw out there and as you can set the.
Cost to do this but I put a mid size or a large rocket is much lower on a per kilogram basis.
Got it. Thank you I appreciate the color.
Can I have guessed that would just add onto that there's the the cost of it is going to require us to provide an extendable bigger I've based service, but of course are a key aspect of our strategy. As I mentioned is the continued improvement of that technology and once we get to the point that we have a reusable version, which you know we.
To introduce around the middle of the decade will be able to transition of reusability, which should lower our costs substantially.
And provide you know now it has cost reduction opportunity, but a market expansion opportunity.
Thank you can except they have Austin Lala from Canaccord your lining is open.
Good evening. So my first question here recently I did a sample satellite manufacturing panel, where several key manufacturers indicated that they are requiring that all of their new small set customers have a dedicated propulsion system on their their satellite because of the risk of space debris. So.
How do you factor that sort of recent development into into what's demonstrated in your presentation about the possibility of excluding propulsion to reduce the the cost per kilogram.
Well, there are bigger I vehicle and and the other vehicles were going to provide a course as I mentioned, it's a it's a very personal vehicle that will handle not only in space transportation that is to say taking small satellites two satellites nano satellite so the right locations.
Think of it like a bus or the U P S trucking space dropping cargo off at the right locations.
And there are other services that we described for hosted payloads satellite servicing of like debris removal, which which is what you're talking about is a substantial opportunity because of the large numbers of small satellites and <unk> going up now some of the larger satellites.
Yeah, it's more practical to introduce.
Building and propelled propulsion systems too for those satellites to be commanded to therefore D or better things of that nature to remove the debris.
But we think we're more cost effective because if you stop and think about it you could outfit hundreds or thousands or tens of thousands of satellites to each have their own propulsion system, where you can have the equivalent of a truck coming by in picking up N D. Orbiting large numbers of satellites and when you get down to smaller and smaller satin.
Like like cute SaaS nano set.
The per pound per kilogram cost of outfitting those things with their own dedicated propulsion systems is is substantial and so I'm not saying, there's going to be a single solution for this burgeoning need for debris removal I think you're gonna see a verse.
Alrighty of things brought to marketing commercialized, but we do think the the concept that we're pursuing has a has a lot of potential and that there's going to be a significant addressable market for it.
Okay that makes sense and and just to follow up what Keith <unk> test objectives are you looking to demonstrate on that big right along.
<unk> and as I understand it from a previous previous conversations we've had there's not gonna be any customer payloads wedding along for the appointment on that June launch right.
For the planned launch next June there will be customer payloads that we will take with to orbit.
We're planning to have the paying customers that come along with us and what we'll do is.
[noise] will be integrated assuming all goes well and we meet the caveat I mentioned in my statement, we will take the space X transport five mission in June go to orbit lower orbit.
And they are a primary goal for the mission will be to to test the big right on orbit to put it through its paces.
The things that it would ordinarily do to drop customers often to operate normally and space and we're just gonna put it through its flight envelope.
And if there are any issues that are experienced work to address those both on orbit and and then later I just can't overstate, though the importance of this kind of step by step testing and while we will have paying customers that we will take to orbit in this initial mission.
Once we've dropped them off we will then go through our our testing regiment and obviously, we would love for our first test a big riding space to go flawlessly, I mean, not a single thing wrong, but in the history of space. It is common to experience issues that you learn from and improve upon so we really are approaching.