Momentus Inc. (NASDAQ:MNTS) Q3 2023 Earnings Call Transcript

Momentus Inc. (NASDAQ:MNTS) Q3 2023 Earnings Call Transcript November 14, 2023

Momentus Inc. beats earnings expectations. Reported EPS is $-7.2, expectations were $-7.5.

Operator: 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 Momentus Inc. Third Quarter 2023 Earnings Conference Call. 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. [Operator Instructions] Thank you. As a reminder, today’s call is being recorded. I would like now to turn the call over to Mary Horn of Investor Relations. You may begin your conference.

Maria Horne: Thank you and hello, everyone. Welcome to Momentous’ third quarter 2023 earnings conference call. With me here today are John Rue, Chief Executive Officer of the company and Chairman of its Board of Directors, as well as Eric Williams, Chief Financial Officer. Each will provide prepared remarks. Following these prepared remarks, we will take questions from analysts. 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.momentous.space. 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.

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

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 also note that we will refer to certain non-GAAP financial information on today’s call. You can find reconciliation of the non-GAAP financial measures to the most comparable GAAP measures in our earnings press release. None of these non-GAAP financial measures is a substitute for or superior to measures of financial performance prepared in accordance with GAAP. With that, I’d like to turn the call over to our Chairman and Chief Executive Officer, John Rood.

John Rood: Thank you, Mary. It’s a pleasure to be here today to provide an update on the progress we have made at Momentus 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, Momentus made 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’ve seen 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 2 Tracking Layer program that involves producing 18 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. Momentus 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, Momentus is also pursuing and evaluating strategic alternatives. As part of the evaluation of strategic alternatives, Momentus 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’s important to note that any capital raised by the company, that it’s 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 ceased.

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 Vigoride 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 Momentus 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 Vigoride 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, including testing of our microwave electro-thermal thruster engine, continuing demonstration and testing of our Tape Spring Solar Array, and preparing to conduct a demonstration of Rendezvous and Proximity Operations early next year. We’ve already demonstrated our existing technology in space, including our pioneering and environmentally friendly thruster that uses water as its propellant. And we have executed well to meet our customer commitments. Since our first launch in May of 2022, Momentus has deployed 18 customer satellites using our Vigoride Orbital Service Vehicle and deployers. 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 in space and beaming it to Earth.

Our Vigoride 5 mission launched in January of 2023 is ongoing and the spacecraft continues to be operational, support customer activities and demonstrate new capabilities. As a reminder, during the Vigoride 5 mission, Momentus deployed a customer satellite from Cosmosis and has provided hosted payload services to Caltech’s Space Solar Power Demonstrator 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 Momentus team conducted testing of the Microwave Electrothermal Thruster or MET in 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 deliver satellites to precise custom orbits and to provide in-space infrastructure services like hosted payloads.

The MET uses water as its propellant. Momentus is a pioneer in commercializing this technology with safe, easy to handle propellant that is environmentally friendly. Recently, we started using this same vehicle to advance MET testing and have achieved dual thruster firings. Dual thruster firings enable greater efficiency and quicker orbit transfer times. As of today, we have approximately 230 minutes of firing time on the MET between both thrusters. In total, we’ve executed approximately 6.5 kilometers in orbital raises of the Vigoride OSV or Orbital Service Vehicle by firing the MET in single or dual thruster firings. The MET technology has achieved firing times that are the operational times required for Momentus missions. Its non-toxic water propellant is intended to enable simpler, safer, and more cost-efficient operations preparing the spacecraft for launch on Earth and in operation in space.

We’re proud that the MET 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 with Vigoride 6 launched in April of 2023 is also ongoing. We have deployed all satellites for customers, including the REVELA payload for ARCA Dynamics, the VIREO CubeSat for C3S LLC, the DISCO-1 CubeSat for Aarhus University, the IRIS-C payload for an Asian customer booked through ISILAUNCH and two satellites for NASA. As a reminder, these successful commercial deployments culminated in Momentus recognizing revenue of $1.7 million in the second quarter of this year. We are proud of the performance of our Vigoride 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 Vigoride vehicle in order to place them in orbit. In those cases, we will use another mechanism, like a deployer, 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 Transporter-9 mission on November 11, we have deployed three satellites for customers using a deployer, including the Picacho satellite for Lunasonde, which is a U.S. sub-surface imaging company with the goal of making underground resources, like water and minerals, easier to find.

The Picacho CubeSat is a technology demonstrator of Lunasonde’s 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 Hello Test 1 & 2 satellites for Hello Space of Turkey are part of the Hello for IoT mission that that company is conducting. The two pocket cube satellites are part of Hello Space’s broader mission to enable worldwide IoT ecosystems and end-to-end data services for various industries. Hello Test 1 and 2 are Hello Space’s second and third satellites launched into orbit. There are two other satellites that Momentus carried on this flight that we cannot confirm deployment of 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 deployer system on that day.

Moving into next year, we expect to fly our next Vigoride vehicle, Vigoride 7, on the SpaceX Transporter 10 mission targeted for launch no earlier than March of 2024. On this mission, Momentus has 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 Momentus hosted payload that we will use to conduct a Rendezvous and Proximity Operations demonstration. With Vigoride 7, we are planning for a fuller payload, which would improve mission economics, and we anticipate that Vigoride 7 will generate more revenue than Vigoride 6. As I mentioned, we’ve expanded our product offerings to include low-cost, flexible, powerful satellite buses, spearheaded by our M-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 $20.8 billion by 2030, according to Allied Market Research. The M-1000 satellite bus utilizes the same core technologies as our Vigoride, 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. It features high power, a flexible configuration to support individual customer needs, greater payload capacity than competing buses, and a quick production timeline to meet 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 a contract with C3S for transportation and orbital delivery services in 2025. C3S is a repeat customer from Momentus. The C3S VIREO payload was transported to orbit on the Vigoride 6 mission launched in April of 2023. Secondly, we signed a contract with Arhaus University for transportation and orbital delivery services in late 2024. Arhaus is also a repeat customer. Momentus placed a satellite in low earth orbit for Arhaus, also on our Vigoride 6 mission that launched in April of this year. Third, we signed a contract with FOSSA 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. FOSSA is another repeat customer. Fourth, we signed a contract with RIDE! Space to transport two payloads to orbit, including the first satellite for the nation of Senegal and the second satellite for Djibouti. We signed a contract with SatRev to fly their SOWA-1 payload in the first quarter of next year and sixth, and most recently, we signed a contract with AVS to fly their LUR-1 payload in the second quarter of next year. We also continue to see interest and receive 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’s Space Force Space Development Agency, or SDA.

The first contract phase is worth roughly $746,000 and includes an option for a contract modification that we expect the SDA to exercise. This option would add an additional $1.2 million, bringing the total contract value to over $1.9 million. This project’s scope involves making tailored modifications to the system underlying the M-1000 satellite bus 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, a high-volume data recorder, and improving the modularity of the propulsion system. We recently completed the first milestone under the first phase of this SDA contract. As mentioned earlier, we recently submitted a bid to the SDA for the Tranche 2 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 aim to be. We believe that 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 schedule is optimized to meet this anticipated demand.

We marked our third mission of the year just a few days ago with the SpaceX Transporter-9 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 ports on all of the SpaceX transporter missions through the end of 2024, including the Transporter 10 mission targeted for February of 2024, the Transporter 11 mission targeted for June of 2024, and the Transporter 12 mission targeted for October of 2024. The market opportunity for Momentus 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 spent $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, a 21% year-over-year increase. The flexibility, payload capacity, and power available on the Vigoride OSV and M-1000 satellite bus, make them 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 responsible for national security missions are demonstrating interest in these capabilities.

Not only can our Vigoride OSV deliver 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-end national security payloads, like sensors, communications equipment, and other electronics, and change orbital altitude and inclination, also distinguish Momentus from our competitors. Our capabilities make us well-suited to support the kind of manoeuvre in space that senior U.S. officials, like Space Force Chief of Space Operations, General Saltzman, have discussed as 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 international competitors who cannot meet the needs of these large Defense Department customers and the international competitors who cannot meet the needs of these large Defense Department customers. Momentus 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 in space. We are also continuing to develop new differentiated technology and are expanding our product offerings to the large mature satellite bus market and to the expanding space servicing and de-orbit markets.

In terms of improving our vehicles we’re working to develop additional features and capabilities for Vigoride and the M-1000 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 Spring Solar Array or T-A-S-S-A which has been in space since April on our Vigoride 6 mission. The TASSA utilizes flexible solar cell technology allowing the solar array to be extended and retracted like a tape measure using its concave shape to produce rigidity. TASSA is designed to be deployed and retracted on orbit numerous times, is configurable to varying lengths based on power requirements, and utilizes thin film solar cells that are radiation resistant and self-annealing.

To date, in space testing was able to demonstrate the majority of the major performance requirements. Testing performed included boom yoke deployment, initial rollout deployment, thin film flexible solar cell basic power generation, low cost slip ring performance, and the retraction mechanism. This provides confidence as well as identifying areas for improvement as Momentus continues development of this technology. Once TASSA is fully flight qualified, Momentus estimates that replacing Vigoride’s current solar array with TASSA will substantially reduce the overall recurring production cost of this spacecraft. Momentus was recently notified that our application was approved to issue the company a patent for technology behind TASSA. In addition, we’re building out the capabilities we’ll need to conduct more complex missions in the future.

Our Rendezvous and Proximity Operations, or RPO technology demonstration, is planned for the Vigoride 7 mission, which is scheduled to be launched on the SpaceX Transporter 10 mission in February of 2024. RPO capability would expand the menu of services that Vigoride can provide to include in-orbit inspection, maintenance, and refueling of customer satellites, as well as life extension and orbiting of satellites at the end of their useful life. The RPO demo will allow us to perform space domain awareness and inspection services right away. The RPO mission also supports another innovation focus of ours, which is to evolve towards a reusable version of Vigoride, or refuelable version, that would stay in space and be refueled and therefore reused on later missions.

Currently, after completing its mission, Vigoride will move to a lower degrading orbit and safely and responsibly burn up during re-entry. A reusable Vigoride, after completing its mission, would instead Rendezvous with and provide services to additional customer satellites, thereby providing greater return on investment for each Vigoride launch. In summary, let me just say that Momentus continues to make progress. One, advancing our differentiated technology with demonstrated competitive advantages and gaining flight heritage. 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 de-orbit.

And fifth, raising capital, reducing expenses, and pursuing strategic options. We are actively seeking new investors while considering the full range of strategic options. And we are continuing to drive our technology forward in concert with the demand signal that we are getting from key customers. Now I’ll turn things over to our CFO, Eric Williams, to provide an update.

Eric Williams: Thank you, John, for the introduction. I’m pleased to present highlights of the financial results achieved by the Momentus team 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 and outstanding gross debt consisting of a term loan that we began to repay in March of 2022. Similar to our Q2 earnings released 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 through 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. Momentus has taken and continues to take several proactive steps with respect to managing our burn rate and extending our crash runway while we continue exploring new business opportunities and working to raise additional capital. Towards the end of Q2 2023, we reduced our headcount 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 and evaluating strategic alternatives. During the quarter on September 11th, we successfully executed a registered direct offering raising $5 million in gross proceeds. 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, $1.35 million on October 17th from the exercise of existing warrants previously issued by the company, and $6.5 million gross proceeds via a warrant inducement agreement which closed on November 9th 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, Momentus is also pursuing and evaluating strategic alternatives. As a result of this effort, Momentus 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 pursuant 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 is insufficient to provide a bridge to full commercial production at a profit, the company’s operations could be curtailed or ceased. As I’m sure you can appreciate, we are unable to comment further on any of these discussions at this time. We recognized $0.34 million in revenue in Q3 2023, consisting primarily of revenue generated from meeting a variety of customer service milestones associated with our Vigoride 5 launch. This was a 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 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 while 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 found 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 commercial opportunities as they arise. Please refer to the press release issued today for the reconciliation of Non-GAAP numbers to GAAP. I will now hand the call back to Mary.

Maria Horne: Thank you, Eric. In a moment, we will move on to the question-and-answer portion of our call. I would like to remind participants that all disclaimers outlined at the outset of this call extend to the question-and-answer session. This includes our disclaimers relating to non-GAAP financial information, forward-looking statements, and the technology underlying our planned service. Operator, would you please remind participants how to enter the queue?

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Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Michael Mathison with Singular Research. Your line is open.

Michael Mathison: Congratulations on all the progress, you guys.

John Rood: Thank you, Michael.

Michael Mathison: Looking forward, we talked last quarter about how when the SDA invited you to bid on Tranche 2 that that’s potentially transformational for the company. Do you have a sense of when the SDA will choose the winners from that bid?

John Rood: Thank you for the question, Michael. In July, Momentus submitted a bid, as you recall, with a group of other partner companies in response to SDA’s request for proposals for a program called Tranche 2 Transport Layer Alpha. Unfortunately, the SDA recently announced the selections for contract award, and the contract was awarded to York Space and Northrop Grumman. So, Momentus was not selected for that contract. In that proposal, Momentus and our teammates submitted for the Tranche 2 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 evaluators use at an individual agency. While we were not selected, and Northrop Grumman and 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 Terran Orbital. I guess, Michael, the best way I would explain is to use a baseball analogy. It is 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 are already implementing lessons learned.

Also, I would say we are figuratively back in the batter’s box. We are taking another swing at another large SDA program. We think we have an even stronger set of teammates who have previously won SDA contracts. As I mentioned in my earlier remarks, Momentus and the industry partners that we have pulled together for this competition submitted a proposal for the Tranche 2 tracking layer program, which involves 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 2 tracking layer competition than we were under the Alpha competition.

And the reasons, again, are we’ve developed a greater familiarity with the SDA government evaluators and how they work in a more nuanced way. We’ve also attracted this very strong set of teammates to partner with us on the bid. So we’ll stay engaged in that process and the projected award from SDA for the tracking layer bid is mid-January.

Michael Mathison: 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 Vigoride. I know you can’t be precise, but do you have any sort of ballparks about how much of a reduction in your cost of service a reusable technology would provide?

John Rood: Well, thank you for the question again, Michael. Thus far, of course, Momentus has used an expendable version of the Vigoride orbital service vehicle. This reusable or refuelable version, of course, would stay in space after completing its initial mission where it delivered satellites or hosted payloads. And then on the subsequent mission, Momentus would launch replenishment fuel and other customer payloads that the orbital service vehicle would Rendezvous with and use its robotic arm to integrate. A reusable Vigoride, we estimate, could be reused six or seven times. Therefore, the unit economics would be a major improvement over the expendable version. There is some work that we need to do still to fully develop that reusable version.

On our next mission of Vigoride, scheduled for March of 2024, we plan to take a big step towards this capability when we do the Rendezvous and Proximity Operations demonstration. In that demo, what Vigoride will do is it will attempt to release a target satellite, and then we will manoeuvre within two meters of that satellite. This will enable us to test the software, the sensors, the algorithms, and other technology necessary for this kind of mission and for servicing and refueling of other satellites or deorbiting satellites at the end of their useful life. We also then later will add a robotic arm in the future to enable the reusable version of Vigoride 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 would enclose some of our current electronics inside some shielding. So thanks again for the question, Michael.

Michael Mathison: Okay, great, well, and thank you for the information.

Operator: Our next question comes from [Indiscernible] with Deutsche Bank.

Unidentified Analyst: Hi, well thank you for taking my question. My first question will be about your M-1000 progress. Could you give more color on that? And also, will you need to flex [Ph] further flight heritage with it to gain more credibility?

John Rood: Well, thank you for the question. The M-1000 bus, again, is based on our Vigoride 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 Vigoride as we market the M-1000 bus. I would say we’re very encouraged by the positive reaction we’re 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 RFI, 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.