DEF 14A: Momentus Seeks Reverse Split, Warrant Approval to Stay Listed

Momentus Inc. is calling a special meeting to seek stockholder approval for a reverse stock split to maintain Nasdaq listing and to authorize the issuance of shares related to recent warrant exercises.

Summary

• A Special Meeting of Stockholders will be held virtually on September 17, 2025, at 8:00 a.m. Pacific Time.
• Stockholders will vote on authorizing the Board to amend the Certificate of Incorporation to effect a reverse stock split of Class A common stock at a ratio between 1-for-5 and 1-for-17.85.
• Stockholders will also vote on approving the issuance of up to 2,836,880 shares of Class A common stock in connection with the exercise of certain outstanding warrants, as required by Nasdaq listing rules.
• An Adjournment Proposal will also be voted on, allowing for postponement of the meeting if insufficient votes are received for the other proposals.
• The record date for voting is July 22, 2025, with 9,138,160 shares of common stock outstanding on that date.
• The Board recommends voting FOR all three proposals.
• The primary reason for the reverse stock split is to raise the per share trading price of Class A common stock to meet Nasdaq's $1.00 minimum bid price requirement and avoid delisting.
• Momentus previously executed a 1-for-50 reverse stock split on August 23, 2023, and a 1-for-14 reverse stock split on December 12, 2024.
• Due to prior reverse stock splits, Momentus is currently ineligible for Nasdaq's minimum bid price cure period if it fails to meet the requirement within one year of December 12, 2024, or if cumulative splits exceed 250:1 within two years of August 23, 2025.
• The Warrant Exercise Proposal relates to warrants issued in a public offering that closed on July 1, 2025, with an initial exercise price of $1.41 per share, potentially generating up to $4.0 million in gross proceeds.

Sentiment

Score: 3

Explanation: The company is proposing a reverse stock split for the third time in a short period to avoid delisting from Nasdaq, indicating severe and persistent issues with its stock price and market valuation. The reliance on stockholder approval for warrant exercises to secure crucial funding further highlights a precarious financial position and challenges in capital access. While these proposals aim to address immediate threats, they reflect underlying weaknesses rather than strength.

Positives

• The proposed reverse stock split aims to increase the per share trading price, which could help Momentus maintain its Nasdaq listing and avoid delisting.
• An increased stock price may attract a broader range of investors, including institutional investors and brokerage firms that have policies against low-priced stocks.
• Maintaining a Nasdaq listing is expected to provide a more accessible and efficient market for Class A common stock compared to alternative markets like the OTC Bulletin Board.
• Approval of the Warrant Exercise Proposal could generate up to approximately $4.0 million in gross proceeds, which is crucial for funding operations.
• Stockholders who would otherwise receive fractional shares from the reverse stock split will have their share amount rounded up to the nearest whole share.

Negatives

• The company has resorted to reverse stock splits multiple times (1-for-50 in August 2023, 1-for-14 in December 2024, and now proposing 1-for-5 to 1-for-17.85) in a short period, indicating persistent issues with its stock price and market valuation.
• There is no assurance that the reverse stock split will result in a sustained increase in the stock price or prevent future declines due to other factors.
• The reverse stock split may decrease the liquidity of Class A common stock and could lead to higher transaction costs for stockholders owning odd lots (fewer than 100 shares).
• The market may view a reverse stock split negatively, potentially leading to a decrease in overall market capitalization.
• Failure to approve the Warrant Exercise Proposal would mean the loss of up to $4.0 million in potential funds and would require Momentus to incur substantial additional costs for repeated stockholder meetings.
• The issuance of up to 2,836,880 shares upon warrant exercise will dilute the ownership interests of existing stockholders.
• The sale of shares issued from warrant exercises into the public market could materially and adversely affect the market price of Class A common stock.

Risks

• Momentus faces the risk of delisting from Nasdaq if its Class A common stock fails to maintain a minimum bid price of $1.00 per share.
• The company is ineligible for Nasdaq's minimum bid price cure period due to previous reverse stock splits within the prior one-year and two-year periods.
• There is no guarantee that the proposed reverse stock split will increase the stock price proportionally or attract new investors, and the stock price could still decline.
• The reverse stock split may negatively impact the liquidity of Class A common stock and increase transaction costs for stockholders holding odd lots.
• The reverse stock split could be viewed negatively by the market, potentially leading to a decrease in the company's overall market capitalization.
• Failure to obtain stockholder approval for the Warrant Exercise Proposal would result in the loss of up to $4.0 million in potential capital and necessitate additional costly stockholder meetings.
• The company's ability to implement its business plans and continue as a going concern is dependent on maximizing capital raising opportunities, including warrant exercises.
• If the Warrant Exercise Proposal is not approved, Momentus may need to seek alternative financing, which may not be available on advantageous terms or at all.
• Existing stockholders will experience dilution of their ownership interests if the 2,836,880 warrant shares are issued.
• The sale of warrant shares into the public market could adversely affect the market price of Class A common stock.

Future Outlook

The company expects the reverse stock split to increase the per share trading price of its Class A common stock and enhance marketability to a broader range of investors, including institutional firms. It also anticipates that maintaining its Nasdaq listing will provide a more accessible and efficient market for its stock compared to OTC markets. However, there is no assurance these benefits will materialize, and the stock price could still decline due to other factors.

Management Comments

• Our Board has determined that it is in the best interests of Momentus and its stockholders to combine our shares of common stock within a range of 1-for-5 through 1-for-17.85, as determined by the Board at a later date, in order to raise the per share trading price of our Class A common stock.
• The Company believes that an increased stock price may encourage investor interest and improve the marketability of our Class A common stock to a broader range of investors.
• We believe that maintaining our listing on Nasdaq will provide us with a market for the Class A common stock that is more accessible than if our Class A common stock were traded on the OTC Bulletin Board or in the pink sheets maintained by the OTC Markets Group, Inc.
• The Company believes that prospective investors will view an investment in us more favorably if our Class A common stock qualifies for listing on Nasdaq as compared with the OTC markets.
• The Company’s ability to successfully implement its business plans and continue as a going concern is dependent on its ability to maximize capital raising opportunities, including exercises of its outstanding warrants, like the Warrants.

Industry Context

The filing highlights a common challenge for smaller, growth-stage companies, particularly in capital-intensive sectors like space technology, to maintain compliance with exchange listing requirements. Low stock prices can deter institutional investment and reduce liquidity, making capital raises more difficult. The repeated need for a reverse stock split to meet Nasdaq's minimum bid price requirement, especially after previous splits, suggests ongoing financial or market perception challenges that are not uncommon for companies in emerging or volatile industries.

Comparison to Industry Standards

• Maintaining a minimum bid price of $1.00 is a standard Nasdaq listing requirement, common across all industries for publicly traded companies.
• The company's repeated need for reverse stock splits (1-for-50 in August 2023, 1-for-14 in December 2024, and now proposing 1-for-5 to 1-for-17.85) in such a short timeframe is a significant deviation from the norm for stable, growing companies in any industry, indicating persistent challenges in maintaining investor confidence and stock valuation.
• Successful, well-capitalized companies typically do not resort to multiple reverse splits to avoid delisting, unlike Momentus, which suggests a more precarious financial position compared to established industry players.
• The reliance on stockholder approval for warrant exercises to secure crucial funding, with a potential $4.0 million, is a common financing mechanism, but the necessity of repeated meetings due to Nasdaq rules suggests a tight capital situation and potentially less favorable terms than larger, more established industry players might secure.

Corporate Governance

Stakeholder Impact

• Shareholders will experience a reduction in the number of shares held due to the reverse stock split, though their percentage ownership will remain largely the same (subject to fractional share rounding). They will face dilution from the issuance of warrant shares. They may benefit from the potential for continued Nasdaq listing and an increased stock price, but also face risks of decreased liquidity and market capitalization.
• Employees holding equity awards (stock options, RSUs) will see their awards proportionately adjusted to reflect the reverse stock split, maintaining their intrinsic value.
• Potential investors may find the stock more attractive if the per share price increases, as some institutional investors and brokerage firms have policies against investing in low-priced stocks.
• Nasdaq's listing integrity is supported by the company's efforts to comply with its rules, including the minimum bid price requirement.

Next Steps

• Stockholders are encouraged to vote on the proposals by September 16, 2025, via online, phone, or mail, or during the virtual Special Meeting on September 17, 2025.
• The Special Meeting of Stockholders will be held virtually on September 17, 2025, at 8:00 a.m. Pacific Time.
• If the Reverse Stock Split is approved and implemented, the Board will determine the specific ratio (within 1-for-5 to 1-for-17.85) and timing, and communicate these details to the public.
• If the Board does not implement the Reverse Stock Split within 12 months from the Special Meeting, the authority granted in this proposal will automatically terminate.
• If the Warrant Exercise Proposal is not approved, the company is required to call a meeting every 60 days thereafter to seek approval until it is obtained or the warrants are no longer outstanding.
• Preliminary voting results will be announced at the Special Meeting, and final results will be published in a Current Report on Form 8-K within four business days after the meeting.

Key Dates

Recommendation

The company's need for a third reverse stock split in a short period to maintain Nasdaq listing, coupled with its ineligibility for a cure period, signals severe and persistent underlying operational or financial challenges. While the proposed actions aim to address immediate threats, they are reactive measures to a deteriorating situation. The potential dilution from warrant exercises and the company's dependence on these capital raises for its 'going concern' status indicate a high-risk investment profile. Investors should consider the historical performance leading to these repeated measures and the significant risks associated with a company struggling to maintain basic listing requirements and secure crucial funding.

Keywords

Reverse Stock Split, Nasdaq Listing, Warrant Exercise, Capital Raise, Share Dilution, Corporate Governance, MNTS, Momentus Inc., Proxy Statement, Special Meeting