Q3 2023 Momentus Inc Earnings Call

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Speaker 1: Good afternoon. Thank you for standing by. My name is Jean and I will be your conference operator today at this time. I would like to welcome everyone to the momentous Inc. 3rd quarter 2023 earnings conference call.

Good afternoon. Thank you for standing by my name is Jane and I will be your conference operator today.

At this time I would like to welcome everyone to the Momentous, Inc. Third quarter 'twenty twenty-three earnings conference call.

Speaker 1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Speaker 1: If you would like to withdraw your question, again, press star 1. Thank you. As a reminder, today's call

If you would like to withdraw your question again press Star one thank you.

As a reminder, today's call is being recorded.

Speaker 1: I would like now to turn the call over to Mary Horne of Investor Relations. You may begin your conference.

I would like now to turn the call over to Mary Horn of Investor Relations you May begin your conference.

Thank you and Hello, everyone.

Speaker 2: Welcome to Momentous' third quarter 2023 Earnings Conference Call.

Welcome to momentum for third quarter 2023 earnings conference call.

Speaker 2: With me here today are John Ruh, Chief Executive Officer of the company and Chairman of its Board of Directors, as well as Eric Williams, Chief Financial Officer.

With me here today are John <unk>, Chief Executive Officer of the company and chairman of its board of directors as well as Eric Williams.

Cancel officer.

Speaker 2: Each will provide prepared remarks. Following these prepared remarks, we will take questions from analysts.

Each will provide prepared remarks. Following these prepared remarks, we will take questions from analysts.

Speaker 2: 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 quarter. You can download a copy of the release and presentation slides at investors.momentus.space.

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 quarter you.

You can download a copy of the release and presentation slides.

Here's Scott momentum stocks.

Okay.

Speaker 2: During today's call, we will make certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934.

During today's call, we will make certain forward looking statements within the meaning of section 27 of the Securities Act of.

1933.

Section 21 E of the Exchange Act of 1934.

Speaker 2: Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risk and uncertainty.

Forward looking statements are predictions projections and other statements about future events that are based on current expectations and assumptions and.

As a result are subject to risks and uncertainties.

Speaker 2: Many factors could cause actual future events to differ materially from the forth-looking statements in this communication.

Many factors could cause actual future events to differ materially from the fourth looking statements in this communication.

Speaker 2: You should listen to today's call with the understanding that our actual results may be materially different from the plans, intentions, and expectations disclosed in the forward-looking statements we make.

You should listen to today's call with the understanding that our actual results may be materially different from the plans intentions and expectations disclosed in our forward looking statements we make.

Speaker 2: For more information about factors that may cause actual results to materially differ from forward-looking statements, please refer to the earnings press release we issued today, as well as the company's filings with the Securities and Exchange Commission.

For more information about factors that may cause actual results materially differ from forward looking statements. Please refer to the earnings press release, we issued today as well as the company's filings with the Securities and Exchange Commission.

Speaker 2: Readers are cautioned not to put undue reliance on forward-looking statements and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call.

Readers are cautioned not to put undue reliance on forward looking statements and the company specifically disclaims any obligation to update the forward looking statements that may be discussed during this call. Please.

Speaker 2: 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 to the most comparable GAAP measures in our earnings press release.

Please also note that we will refer to certain non-GAAP financial information on today's call you.

You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in our earnings press release.

Speaker 2: None of these non-GAAP financial measures is a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

None of these non-GAAP financial measures as a substitute for or superior to measures of financial performance prepared in accordance with GAAP with that I'd like to turn the call Ocean Shore, Chairman and Chief Executive Officer Jonathan.

Thank you Mary it's a pleasure to be here today to provide an update on the progress we've made a momentous over the past quarter and share our Q3 financial results.

After I make my comments, our CFO, Eric Williams will take you through the financial highlights and outlook.

In the third quarter momentous make further advances towards our goal of being a market leader for satellite buses and in space transportation and support services for U S government and commercial customers.

Our launch Heritage places us at the forefront of this expanding market and we believe we possess key competitive advantages with our differentiated orbital service vehicle and satellite bus.

First.

We are seeing growing demand from both new and repeat commercial customers as shown by the six new contracts, we signed since mid August.

In addition, we continue to see opportunities in the U S government sector at defense and intelligence agencies and in October we submitted a bid to the U S space Force space Development agency or SDA in response to its request for proposals for the tranche two tracking layer program that involves producing <unk>.

<unk> satellites to perform missile tracking and fire control.

Second since our last earnings call. The company has raised additional capital and reduced operating expenses with the aim of extending our runway momentous has raised approximately $16 $9 million in gross proceeds since our last earnings call.

We have also taken steps to reduce our cash burn rate with a significant reduction from Q2 Q3, and a reduction in operating expenses of over 50% year over year from Q3 2022 to Q3 2023.

That said, we continue to face the headwinds of navigating a shortening cash runway.

In addition to working to raise additional capital momentous as also pursuing and evaluating strategic alternatives as part of the evaluation of strategic alternatives momentous has received multiple indications of interest from potential strategic partners.

Over the past several weeks the company has been engaged in discussions with more than half a dozen potential strategic partners pursuant to confidentiality agreements.

Management discussions with interested parties are ongoing the company continues to position itself in order to quickly capitalize on any potential opportunities with interested parties and evaluate all viable strategic options.

It is important to note that any capital raised by the company.

It is important to note that if any capital raised by the company is insufficient to provide a bridge to full commercial production at a profit the company's operations could be curtailed or cease our CFO, Eric Williams will provide additional information on the company's finances in a few minutes.

Third we continue to operate two of our bigger I'd orbital service vehicles in orbit successfully demonstrating our core technology and gaining valuable flight heritage that we believe is a competitive advantage.

Fourth we continue to lean into significant markets, where we believe momentous has clear advantages for example, we recently announced our M 1000 satellite bus offering.

The M 1000 satellite bus is based on our successful and flight proven ziggurat orbital service vehicle and offers a low cost flexible and capable bus for government and commercial customers.

We're seeing solid interest in our satellite bus and are working toward expanding our footprint within this large and mature market.

And finally, we are driving new innovation to maximize our competitive advantage include.

Including testing of our microwave electrothermal thruster engine, continuing demonstration and testing of our tape Springs solar array.

And preparing to conduct a demonstration of rendezvous and proximity operations early next year.

We've already demonstrated our existing technology and space, including our pioneering and environmentally friendly thruster that uses water as its propellant and.

And we have executed well to meet our customer commitments.

Since our first launch in May of 2022, momentous has deployed 18 customer satellites, using our vigorous orbital service vehicle and deploy them.

In addition, our hosted payload services enabled Caltech to conduct an innovative demonstration using cutting edge space technology to meet our needs on earth by successfully collecting solar power and space and beaming it to Earth.

Our vigorous five mission launched in January of 2023 is ongoing and the space craft continues to be operational support customer activities and demonstrate new capabilities.

As a reminder, during the vigorous five mission momentous deployed a customer satellite from Cosmos. This and has provided hosted payload services to Celtic's space solar power demonstrate our mission in accordance with our contract over the past six months.

These types of hosted payload missions are more profitable than transportation missions, particularly for larger hosted payloads and longer duration missions.

Also during this mission the momentous team conducted testing of the microwave electrothermal thruster or M. E. T can space, where we successfully operated the propulsion system at full power across the range of firing durations of planned operation for its use cases demonstrating capability to do.

Liver satellites to precise custom orbitz and to provide in space infrastructure services like hosted payloads.

The MDT uses water as its propellant momentous as a pioneer in commercializing this technology with safe easy to handle propellant that is environmentally friendly.

Recently, we started using the same vehicle to advance <unk> T testing and they've achieved dual thruster firings.

Dual thruster firings enabled greater efficiency and quicker orbit transfer types.

As of today, we have approximately 230 minutes of firing time on the amici between both thrusters.

In total we have executed approximately six five kilometers in orbital raise its ugly vigor IDE OSV year orbital service vehicle by firing the M E T in single or dual thruster firings.

The <unk> technology has achieved firing times that.

Or the operational times required for momentous missions.

It is nontoxic water propeller is intended to enable simpler safer and more cost efficient operations preparing the space prep for launch on Earth and in operation space.

We're proud that <unk> has shown its ability to operate as intended to perform these missions in space and we look forward to using it to support commercial and U S government customers.

Our mission was <unk> six launched in April of 2023 is also ongoing we have deployed all satellites for customers, including the rebel payload for Arca dynamics.

The REO cube sat for C. Three S. L. L C. The disco <unk> set for our House University.

The Irish sea payload for an Asian customer booked through ISIL launch in.

And two satellites for NASA.

As a reminder, the successful commercial deployments culminated in momentous recognizing revenue of $1 $7 million in the second quarter of this year.

We are proud of the performance of our bigger I've vehicle and see multiple use cases for it particularly in support of more complex missions.

We also have many customers, whose mission requirements don't require the capabilities of a vigorous vehicle in order to place them in orbit.

In those cases, we will use another mechanism like a deploy or to deliver our customers to their intended orbits.

This approach serves the needs of our customers, who don't require delta V or changes in velocity and position after release from the launch vehicle.

For example on our most recent mission launched on the Spacex Transport nine mission on November 11, we have deployed three satellites for customers using a deploy or including the concho satellite for Luna <unk>, which is a U S. Subsurface imaging company with the goal of making underground resources.

Like water and minerals easier to find.

<unk> is a technology demonstrator of Luna <unk> sensors. It will measure the power spectral density of low frequency radio signals in the ionosphere, which will help inform designs for the company's future satellites.

The Halo test, one and two satellites for Hello space of Turkey.

Our part of the Hello for Iot mission that that company is conducting.

The two pocket cube satellites are part of Hello spaces broader mission to enable worldwide Iot ecosystems and end to end data services for various industries.

Hello Test one and two are Hello spaces second and third satellites launched into orbit.

There are two other satellites the momentous carried on this flight that we cannot confirm deployment up at this time after their launch we are coordinating with our customers as they work to establish communications with their satellites and with Spacex to understand as well as possible the operation of the launch vehicle and our deploy our system on that day.

Moving into next year, we expect to fly our next vigor I've vehicle vigorous seven on the Spacex transporter 10 mission targeted for launch no earlier than March of 2024.

On this mission momentous as contracted to support seven customers that require orbital delivery services and two customers requiring hosted payload services for a total of nine customers that we will support on this mission.

We also plan to carry a momentous hosted payload that we will use to conduct a rendezvous and proximity operations demonstration.

With vigor I'd seven we are planning for a fuller payload, which would improve mission economics, and we anticipate that figure out seven will generate more revenue than the big rides six.

As I mentioned, we've expanded our product offerings to include low cost flexible powerful satellite buses spearheaded by our 1000 satellite bus.

We believe this new offering is well positioned to serve a market valued at $11 $9 billion in 2020 and is projected to reach $28 billion by 2030, According to Allied market research.

The M 1000 satellite bus utilizes the same core technologies as our vigor ride, but will be tailored and enhanced as needed to meet the mission requirements of different customers across both the U S government such as the defense Department and commercial customers.

We believe our M 1000 bus can be manufactured at a rapid and scalable pace.

Features high power, a flexible configuration to support individual customer needs.

<unk> payload capacity than competing buses and a quick production timeline to meet customer customer mission requirements rapidly at a low cost, making it highly competitive in the market.

Since our last earnings call, we have signed six commercial contracts.

One we signed the contract with C. III S for transportation and orbital delivery services in 2025.

<unk> is a repeat customer for momentous.

The C. Three S. The Rio <unk> payload was transported to orbit on the Big rides six mission launched in April of 2023.

Secondly, we signed a contract with our house University for transportation and orbital delivery services in late 2024.

Our house is also a repeat customer momentum.

Momentous play satellite and lowest orbit for our house also on our bigger right six mission that launched in April of this year.

Third we signed a contract with fastest systems, a Spanish company that offers global low power internet of things or Iot connectivity and in space services to provide hosted payload services starting in 2024.

The contract also includes two options for additional hosted payloads SASSA is another repeat customer.

Fourth we signed a contract with ride space to transport <unk> payloads to orbit, including the first satellite for the nation of Senegal, and the second satellite for Djibouti.

We signed a contract with sat Rev to fly there. So one payload in the first quarter of next year.

And six and most recently, we signed a contract with avs to fly their L. U R. One payload in the second quarter of next year.

We also continue to see interest and received encouraging feedback from U S government customers.

Earlier this year, we were awarded a small business innovation research contract from the U S Defense Department Space Force Space Development agency or SDA.

The first contract phase is worth roughly $746000 and includes an option for a contract modification that we expect the SDA to exercise this.

This option would add an additional $1 $2 million, bringing the total contract value to over $1 $9 million.

This project scope involves making tailored modifications to the system underlying the M. One satellite us.

And vigorous orbital service vehicle to support a range of department of Defense payloads.

Some of these areas include adding a secure payload interface optical communications terminals are high volume data recorder and improving the modularity of the propulsion system.

We recently completed the first milestone under the first phase of this SBA contract.

As mentioned earlier, we recently submitted a bid to the SBA for the tranche two tracking layer program, which involves building 18 satellites for tracking of ballistic and hypersonic missiles as well as fire control that we expect will exceed $700 million.

We continue to receive favorable feedback and encouragement from the U S government about our capabilities and have been pleased to host senior government officials for visits to our headquarters this past quarter.

We intend to continue to compete we're confident in our capabilities and solutions and we understand it may take some time to grow into the defense industry leader, we aimed to be.

We believe the demand for our services will increase as we see heightened government and department of Defense interest. In addition, as we pivot towards expanding to the large and mature satellite bus market and continue to pursue launch aggregation as a revenue stream, we are ensuring our launch schedules optimized to meet this.

<unk> demand.

We marked our third mission of the year, just a few days ago with the Spacex transport nine launch as I mentioned, we deployed three customer satellites and are working to confirm the deployment of two additional satellites.

We are excited to continue the momentum in 2024 and unlike many of our competitors are already well positioned with Spacex to continue customer deliveries.

We have reserved courts on all of the Spacex transport emissions through the end of 2024, including the transport of 10 mission targeted for February of 2020 for the transport of 11 mission targeted for June of 2024, and the transporter 12 mission targeted for October of 2024.

The market opportunity for momentous is substantial and experiencing strong growth.

The space Foundation's annual Space report, which was released on July 25th shows that in 2022, the global space economy grew 8%, reaching $546 billion.

The commercial space market climbed nearly 8% reaching over $427 billion.

The U S government Smith 69, $9 billion on space programs with the majority coming from the department of Defense.

Total space spending by the U S Department classified and unclassified for all military branches and intelligence agencies is estimated to have grown to $42 $9 billion in 2022% to 21% year over year increase.

The flexibility payload capacity and power available on the vigorous OSV and M. 1000 satellite bus makes him well positioned to support a range of national security missions like space situational awareness surveillance reconnaissance and other tasks. So it comes as no surprise that the U S government customers.

Possible for National Security missions are demonstrating interest in these capabilities.

Not only can our vigor I'd OSV delivered national security payloads to custom orbits to support unique mission requirements, but we're also able to move from initial customer requirements to operation in space with rapid speed setting momentous apart from traditional companies that support department of defense missions.

Other factors such as our ability to support power intensive high in National Security payloads like sensors communications equipment and other electronics in change orbital altitude and inclination also distinguished momentous from our competitors.

Our capabilities make us well suited to support the kind of maneuvering space that senior U S officials likes.

Like space Force Chief of Space operations General Salzman have discussed is a critical need in the highly contested space environment.

In addition, our highly experienced team of professionals and engineers with decades of National Security experience gives us an edge over other U S companies and the international competitors, who cannot meet the needs of these large defense department customers.

Momentous seeks to grow in the space market.

And we believe our value proposition and differentiated capabilities support that goal.

We've now delivered 18 satellites to orbit in our history.

While demonstrating the operational capabilities of our technology, along with its functionality and space.

We are also continuing to develop new differentiated technology and are expanding our product offerings to the large mature satellite bus market and two the expanding space servicing and de orbit markets.

In terms of improving our vehicles.

Working to develop additional features and capabilities for vigorous and the satellite bus.

To enhance their performance such as high speed mission data links adding expansion tanks, incorporating security features and adding a precision pointing option to host sensitive and classified U S government payloads.

We expect to begin introducing some of these features in 2024.

A great example of our innovation is our tape springs solar array or Ta SSA, which has been in space since April on our big right six mission.

The tacit utilize this flexible solar cell technology, allowing the solar array to be extended and retracted like a tape measure using its concave shape to produce rigidity.

<unk> is designed to be deployed and retracted enorme. It numerous times is configurable to varying lengths based on power requirements and utilizes thin film solar cells that are radiation resistance and self annealing to date in space testing was able to demonstrate the majority of the major performance requirements.

<unk> performed included boom yoke deployment initial rollout deployment thin film flexible solar cell basic power generation.

Low cost slipped bring performance and the retraction mechanism.

This provides confidence as well as identifying areas for improvement as momentous continuous development of this technology.

Once tacis fully flight qualified momentous estimates that replacing <unk> current solar array with Tessa will substantially reduce the overall recurring production costs of the spacecraft.

Momentous was recently notified that our application was approved to issue the company a patent for technology by Tessa.

Okay.

In addition, we're building out the capabilities will need to conduct more complex missions in the future our rendezvous and proximity operations or RP O technology demonstration is planned for the vigorous seven mission, which is scheduled to be launched on the Spacex transporter 10 mission in February of <unk>.

2024.

R. P O capability would expand the menu of services that <unk> can provide to include in orbit inspection maintenance and refueling of customer satellites as well as life extension and the orbiting satellites at the end of their useful life.

The RP O demo will allow us to perform space domain awareness and inspection services right away.

The <unk> mission also supports another innovation focus of ours, which is to evolve towards a reusable version of vigorous or refusal version that would stay in space and be refueled and therefore re used on later missions.

Currently after completing its mission vigorous will move to a lower degrading orbit and safely and responsibly burn up during reentry.

Reusable vigor right after completing its emission.

Its mission would instead rendezvous and with and provide services to additional customer satellites, therefore, thereby providing greater return on investment for each vig ride launch.

In summary, let me just say that momentous continues to make progress.

One advancing our differentiated technology with demonstrated competitive advantages and claiming gaining flight heritage set.

Secondly by signing additional commercial contracts.

Third by gaining greater interest from U S government and defense Department organizations fourth positioning the business for greater growth in the large and growing satellite bus market and emerging market for in space logistics and satellite servicing refueling and the orbit.

Fifth raising capital, reducing expenses and pursuing strategic options.

We are actively seeking new investors, while considering the full range of strategic options and.

And we are continuing to drive our technology forward in concert with the demand signal that we're getting from key customers.

Now I'll turn things over to our CFO, Eric Williams to provide an update.

Thank you John for the introduction.

I'm pleased to present highlights of the financial results achieved by the momentous teens.

During our third quarter of 2023.

We ended Q3, 2023 with unrestricted cash and cash equivalents of $9 $8 million with approximately $5 $7 million.

An outstanding gross debt consisting of a term loan that we began to repay in March of 2022.

<unk>.

Similar to our Q2 earnings release earlier this year. Our 10-Q will include language evaluating whether there are conditions and events that raise substantial doubt about our ability to continue as a going concern.

This going concern determination was concluded as we prepared our financial statements for the third quarter. After management conducted a comprehensive evaluation of the status of our current liquidity and projected cash flows for the next 12 months.

When taking into account certain external factors. This analysis concluded that given our current cash balance the company is unable to meet its obligations for the next 12 months.

Although the company has a history of successfully raising cash primarily to the issuance of equity consistent with relevant technical guidance any projected or anticipated equity financing transactions are not generally viewed as probable for the purposes of going concern assessments.

Momentum has taken and continues to take several proactive steps with respect to managing our burn rate and extending our cash runway, while we continue exploring new business opportunities and working to raise additional capital.

Towards the end of Q2 2023, we reduced our head count consisting of both full time employees and contractors by approximately 30% to substantially reduce our burn rate, while retaining the talent, we need to execute on our key near term initiatives.

We invested approximately $12 $8 million in operating activities. During Q3 as detailed in our 10-Q statement of cash flows sequentially down $1 8 million as compared to $14 $6 million in Q2, 2023, and down $12 8 million or 50% lower.

As compared to $25 $6 million in Q3 of 2022.

In addition, the company has been working to raise additional capital while pursuing any value, adding strategic alternatives.

During the quarter on September 11th we successfully executed a registered direct offering raising $5 million in gross proceeds in.

In addition, since the end of this last fiscal quarter, we raised an additional $4 million in gross proceeds via a registered direct offering on October 4th.

$135 million on October 17th from the exercise of existing warrants previously issued by the company.

And $6 5 million gross proceeds by a warrant inducement agreement, which closed on November nine.

For a total of $11 9 million in gross proceeds since the end of the quarter.

In total the company raised approximately $16 $9 million in gross proceeds since our last earnings call.

As John mentioned in his prepared remarks momentous is also pursuing any value any strategic alternatives. As a result of this effort momentous has received multiple indications of interest from potential strategic partners.

Over the past several months the company has been engaged in discussions with more than half a dozen potential strategic partners.

Soon to confidentiality agreements management discussions with interested parties are ongoing.

While there can be no certainty that any transaction will ensue from the evaluation. The company continues to position itself in order to quickly capitalize on any potential opportunities with interested parties and evaluate all viable strategic options.

In addition, if the capital raised by the company isn't sufficient to provide a bridge to full commercial production net of profit the company's operations could be curtailed our seas.

As I'm sure you can appreciate we are unable to comment further on any of these discussions at this time.

We recognized <unk> three $4 million in revenue in Q3, 2023, consisting primarily of revenue generated from meeting a variety of customer service milestones associated with our big write five launch.

This was 162% increase year over year from Q3 of 2022.

We had $15 3 million in operating expenses during Q3, which was a 30% year over year improvement from the third quarter in the year prior.

In the quarter, we generated approximately $15 $1 million in losses from operations, an improvement of 31% compared to $21 6 million in losses from operations in Q3 of 2022.

On a non-GAAP basis, our adjusted EBITDA was negative $10 6 million for Q3 of 2023, a sequential improvement of approximately $4 1 million from Q2 of 2023, and $5 $5 million or better as compared to Q3 of 2022.

non-GAAP SG&A expenses for the third quarter of 2023 totaled $5 $6 million, an improvement of $1 $1 million as compared to Q3 of 2022.

non-GAAP R&D expenses for the third quarter of 2023 total approximately $5 $5 million down $4 million from Q2 of 2023.

We currently have approximately $6 6 million shares outstanding.

In addition, during the quarter, we completed a reverse split of our stock which has allowed us to continue to meet the NASDAQ listing requirements also aiding in future capital raising.

With respect to backlog, we have decided to work towards providing more near term metrics as our business grows we sound backlog to be more useful during the early stages of the company and given the long term nature of the contracts find the metric to be less helpful. Going forward. We will continue assessing the benefits of providing forward looking financial metrics, while continuing to announce the commercial opportunity.

<unk> as they arise.

Please refer to the press release issued today for the reconciliation of the non-GAAP numbers to GAAP Alan.

I will now hand, the call back to Mary.

Thank you Eric in a moment.

We'll move on to the question and answer portion of our call.

I'd like to remind participants that all disclaimers outlined at the outset of this Paul extents of our question and answer session.

Okay. Thank Bruce our disclaimer relating to non-GAAP financial information.

Good looking statements and the technology underlying our planned service offerings.

Operator would you please remind participants how to enter the queue.

At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Pause for a moment to compile the Q&A roster.

Your first question comes from the line of Michael Matheson with singular research. Your line is open.

Congratulations on all the progress you guys.

Thank you Michael.

Looking forward, we talked last quarter about how when the SDA invited you to bid on tranche two that that's potentially transformational.

Company.

Do you have a sense of when the FDA will choose the winners from method.

Thank you for the question Michael.

In July momentous submitted a bid as you recall with a group of other partner companies in response to Sta's request for proposals for a program called tranche to transport layer Alpha.

Unfortunately, the SBA recently announced the <unk>.

Selections for contract award and the contract was awarded to York Space and Northrop Grumman. So momentous was not selected for that contract.

In that proposal momentous and our team teammates submitted for the tranche two transport layer Alpha competition I would say that was a significant step forward for our company proposals for major U S. Defense Department programs like this are a major undertaking they are hundreds of pages long.

With detailed technical analyses and designs required.

It takes time in my experience for bidders to become established with government agencies and to learn the nuances of their processes and the requirements that they use as well as importantly, the nuances that the bid evaluate our shoes at an individual agency.

While we were not selected in Northrop Grumman in York space were awarded contracts.

Certainly that was disappointing that we were not selected but I would note. There were a number of other companies who were not selected as well such as Lockheed Martin and Taryn orbital.

I guess, Michael the best way I would explain as to use a baseball analogy, it's very common that companies need some at bats, if you will before getting a hit.

We learned a lot during the alpha competition and we're already implementing lessons learned.

Also I would say we are figuratively back in the Batter's box, we're taking another swing at another large SDA program.

We think we havent, even stronger set of teammates who have previously one S T a contracts.

As I mentioned in my earlier remarks momentous in the industry partners that we have.

Pulled together for this competition submitted a proposal for the tranche two tracking layer program, which involves <unk>.

Producing 18 satellites for missile tracking and fire control, we are optimistic about our prospects here.

Certainly this is a process and it's a journey if you will and we're improving with every proposal we submit.

And again, we do feel like we're better positioned for a contract award under the tranche two tracking layer competition than we were under the Alpha competition and the reasons again, we've developed a greater familiarity with the S. T a government evaluated.

And how they work in a more nuanced way. We've also attracted us very strong set of teammates to partner with us on the bid. So we will stay engaged in that process and the projected award from FDA for the tracking layer bit is mid January.

Okay, great. Thank you for all that information.

Looking ahead, a little bit to some of your ongoing technology R&D something that's pretty attractive is the idea of a reusable figure right.

I know you can't be precise, but do you have any sort of ballpark about how much of a reduction in your cost of sort of reusable technology would provide.

Okay.

Well. Thank you for the question again, Michael thus far of course momentous as Houston Expendable version of the vigorous orbital service vehicle. This reusable or refuel version of course would would stay in space. After completing its initial mission.

It delivered satellites or hosted payloads.

And then on the subsequent mission momentous would launch replenishment fuel and other customer payloads that the orbital service vehicle with rendezvous with and use its robotic arm to integrate.

A reusable vigor I'd, we estimate could be used reused six or seven times. Therefore, the unit economics would be a major improvement over the expandable the expandable rather version.

There is some work that we need to do still to.

Fully develop that reusable version on our next mission that.

A vigorous scheduled for March of 2024, we plan to take a big step towards this capability when we do the rendezvous in proximity operations demonstration.

In that demo with vigor I will do is it will attempt to release a target satellite and then we will maneuver within two meters of that satellite.

This will enable us to test the software.

Serves the algorithms and other technology necessary for this kind of mission and for servicing and refueling of other satellites or de orbiting satellites sustained their useful life. We also then later, we'll add a robotic arm in the future to enable the reusable version a big right to do some.

To do the mission.

And there's a little bit of shielding of electronics that we would need to do to allow for longer radiation exposure essentially we can close some of our current <unk> electronics inside some shielding.

So thanks again for the question Michael.

Okay, great well, thank you for the information.

Next question.

Uh huh.

Yes.

Thanks.

Thank you.

Yeah.

Hi.

Thank you for taking my questions. My first question will be about scale and one thousands progress.

So could you give more color on that and also whether it needs like Florida slide heritage with its game or quite a bit.

Well thank you for the question.

The M 1000, and bus again is based on our bigger I'd orbital service vehicle and there is a very high degree of commonality between the two vehicles, which allows us to leverage the flight heritage of the vigor IDE as.

As we market the M 1000 bus.

I would say, we're very encouraged by the positive reaction, we are getting to the M 1000 rollout.

We have both commercial and government customers, who are showing interest in the M 1000.

For instance over the past 30 days, we've met with numerous customers about it we received an RFP or request for information from a constellation provider that we're in the process of responding to.

We.

Feel the M 1000 is a differentiated product because it has higher relative power a flexible configuration the ability to carry a larger payload and we're able to produce them at a low cost.

Potential customers are telling us the M 1000 has a very good value proposition and that's why they are reacting positively to it.

Of note the <unk> thousand was used in our bid to the space development agency for the tranche two tracking layer of 18 satellites that will be used for missile tracking.

So.

We're very optimistic about the progress of the M 1000, eager to leverage the flight heritage of our bigger orbital service vehicles, we marketed thanks again for the question.

Well. Thank you so I'm not sure the inflammation.

And my second question will be.

Well I see signs that will come transcon recently.

It seems quite faster than before.

And the question will be.

I think that is helping with that.

Also I think I talked a little bit.

I apologize.

This market condition competition, what do you think about your future growth.

As I. Thank you for the question as I mentioned on the call.

Momentous is now deployed 18 satellites to date.

The progress that we've made on those earlier missions in the flight Heritage. We've gained has positioned us.

Better than the market than at the start of the company because customers are sensitive to whether you have flight heritage. They want to evaluate the risks of flying with you in the future.

For example at our next mission, we plan to launch the vigorous seven orbital service vehicle.

With seven customer payloads or satellites that require orbital delivery and to other customers for a total of nine. These other two customers are for hosted payloads support and of course, we plan to do our own hosted payload demonstration hosted payload operation with a demonstration of Rhonda who have <unk>.

Some of the operations on that flight.

But we've also signed other contracts with customers to deliver their satellites to orbit that will fly on later missions like the Spacex transporter 11, and 12 missions, which are targeted for June and October of 2024.

And we're actively booking customers in marketing for flights.

In 2024 and beyond so we do see a growth in interest in our capability you mentioned the six customer contracts that we've signed since August.

So we're going to try to keep that momentum going in.

That's the exhortation, we've been giving to our sales team. So we're optimistic about the possibilities for future growth.

Okay. Thank you.

Yes, that's really helpful.

Okay.

There are no further questions at this time. This concludes today's conference call you may now disconnect.

[music].

Okay.