Momentus Inc. Q3 FY2021 Earnings Call

Ladies and gentlemen, thank you for being here. Welcome to Momentus Third Quarter 2021 Earnings Call. All participants are currently in a listen-only mode. We will have a question-and-answer session later, and I will provide instructions for that. I would now like to hand the conference over to your host, Mr. Darryl Genovesi. Please go ahead, sir.

Thank you, Mary. Good afternoon, everyone. Welcome to Momentus’ third quarter 2021 earnings conference call, and our first ever earnings conference call. With me here today at 3901 North First Street in San Jose, our corporate headquarters and one of the two sites that Momentus occupies, are John Rood, Chief Executive Officer of the Company and Chairman of the Board of Directors, as well as Jikun Kim, Chief Financial Officer. Each will provide prepared remarks. Following these prepared remarks, we’ll take questions from analysts. In the interest of time, we would ask that you limit yourself to one question and one brief follow-up. 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 slides at investors.momentus.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 forward-looking statements in this communication. 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 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 reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in our earnings press release. The technology underlying our anticipated service offering is still in the process of being developed and has not yet been fully tested or validated in space. Our ability to execute on our business plan is dependent on the successful development and commercialization of our technologies. Development of space technologies is extremely complex, time-consuming, and expensive, and there can be no assurance that our predicted theoretical and ground-based results will translate into operational space vehicles that operate within the parameters we expect, or at all. With that, I’d like to turn the call over to our Chairman and Chief Executive Officer, John Rood.

Thank you, Darryl. Good afternoon. I’m excited to speak with you on our first earnings call after completing our business combination with Stable Road Acquisition Corporation and getting listed on the NASDAQ. This is a crucial milestone for growing our business and achieving our goal of providing essential infrastructure services to support the rapidly expanding space economy. I appreciate everyone gathering here on Tuesday, as we initially considered holding this call on Thursday, which is Veterans Day. We will take a moment at 11:00 a.m. on the 11th day of the 11th month to honor our veterans, and Momentus is proud to have veterans on our team. I’d like to begin by thanking the team at Momentus. As many of you may know, we faced some unique challenges during our de-SPAC process. The commitment and resilience of our team allowed us to move forward and successfully complete the business combination with Stable Road, positioning us well to implement the next phase of our business plan. Since this is our first earnings call and many of you may not be familiar with our story, I will provide an overview of our business, our accomplishments thus far, along with a revised strategy and our growth plans moving forward. I’ll also outline our key focus areas for the rest of the year and preliminary plans for 2022. After my overview, our CFO, Jikun Kim, will review the financial highlights for Q3. Before discussing Momentus and our business model, I want to share a few recent developments for those of you who have followed the Company for some time. Firstly, Momentus signed a National Security Agreement with the U.S. government in June and repurchased the equity of the two Russian co-founders. They, including the former CEO, have not been involved with the Company since that time. We continue to work closely with the Defense and Treasury Departments to implement this agreement. Secondly, we have strengthened our executive leadership team and Board of Directors by bringing on high-caliber individuals with the experience necessary to grow our business and implement the National Security Agreement. Third, we have made considerable progress on the implementation of the NSA under our new leadership. Of the 62 compliance tests required under the NSA, we have fully implemented most and partially implemented the rest. The team is diligently working to establish processes to ensure consistent compliance with the NSA. While there is a significant initial effort to update many legacy IT systems and internal processes, we believe that thorough implementation will foster a stable regulatory environment for the Company. Fourth, we successfully resolved all outstanding claims with the SEC’s Enforcement division, allowing us to proceed with our business combination with Stable Road and publicly list our stock. As part of the settlement, we agreed to hire an independent compliance consultant to oversee our disclosures and FX programs, and we engaged this consultant about four weeks ago. Fifth, we completed the merger with Stable Road with a low level of redemptions compared to other recent de-SPACs, which provided us with the capital needed to continue developing our technology. Sixth, we have advanced our technology significantly. We have completed the initial assembly and functional testing of Vigoride 3 and drafted a plan to address issues identified during these tests. Remediation and modifications to certain components are in progress, and the vehicle will soon undergo thermal vacuum testing, which mimics the conditions in space. Our initial launch vehicles will feature our current generation thruster design, while our propulsion engineers are actively testing our next-generation thruster design and have made significant strides in Q3. This new thruster will enhance efficiency over our current design through several innovations, extending its overall lifespan. Seventh, although this is outside the Q3 timeframe, I'm pleased to announce that on October 20, 2021, we signed a Launch Services Agreement with SpaceX for Vigoride on the Transporter 5 mission, scheduled for June 2022. While securing this launch slot is crucial, our plan for a June launch depends on receiving licenses and other government approvals, which we anticipate will be achieved, as well as the successful completion of our preparations for flight. Our goal is to become a leader in providing transportation and in-space infrastructure services for the growing space economy. This vision requires careful progress. I have refined our strategy into actionable steps that will lay the groundwork for the future. Our strategy will guide our everyday decisions and actions and consists of five elements. First, we will prioritize bringing our initial orbital transfer vehicle, Vigoride, to market as soon as possible with the features and reliability our customers expect. We plan to launch Vigoride as early as June 2022, contingent upon receiving necessary licenses and government approvals, successful preparation for flight, and the SpaceX mission maintaining its schedule. If we cannot launch in June, we will do so as soon as feasible. Second, we aim to selectively broaden our services and introduce a reusable version of Vigoride that will effectively and efficiently support customer needs for payload hosting and in-orbit servicing. Third, we will scale up from Vigoride and expand our offerings and capabilities by completing development of new vehicles such as Ardoride, enabling missions beyond Low Earth Orbit, like lunar missions, with significantly larger payloads. Fourth, as a technology-driven company, our innovations will be pivotal to maximizing the utilization of space. Technology development and ongoing innovation are central to our mission. Finally, the last aspect of our strategy is to attract, cultivate, and retain a highly skilled and motivated workforce, giving us a competitive edge in the industry. This element is foundational to our success, and we recognize that having exceptional people is essential for achieving significant goals. As we pursue our strategy, we will remain attuned to the relationship between customer demand and the technology we are delivering. It’s crucial that our capabilities align with customer needs, and we consistently receive feedback indicating that our future offerings will empower our customers to engage with the thriving space economy. We have an exceptional team leading the business. I would like to introduce three new members who bring extensive experience from the Defense Department and implementing mitigation agreements similar to ours. Paul Ney is our new Chief Legal Officer and Corporate Secretary with nearly 40 years in public and private sectors, including as General Counsel of the Defense Department. Vic Mercado, our Security Director, oversees our National Security Agreement and has extensive experience in the Navy and Defense sector. Karen Plonty, our new Chief Security Officer, has vast experience managing security and compliance programs for companies under similar agreements. Additionally, I joined Momentus in early August, bringing over 20 years of government service, including at the Department of Defense and Department of State. My experience also includes leadership roles in the private sector, which will support our efforts to overcome current security challenges. Now, looking at our business model, Momentus is a publicly traded pure-play space infrastructure company. We believe we might be unique in that regard. The commercialization of space offers one of the most exciting opportunities of our time, with growth expected to exceed that of the broader economy in the foreseeable future. Our vertically integrated model allows us to manufacture and operate our spacecraft, specifically orbital transfer vehicles. We anticipate using these OTVs to provide in-space services for our customers, and we envision developing a family of increasingly capable OTVs. Our adjusted strategy focuses on our initial offering, Vigoride, which will provide in-space transportation and last mile delivery for satellites, expected to start in 2022, pending necessary government approvals. We also aim to offer payload hosting services with additional features over time, including satellite refueling, inspection, maintenance, and end-of-life removal of satellites and debris. As larger launch vehicles and smaller satellites emerge, we foresee a significant decrease in costs for delivering capabilities to orbit, which should drive demand for our anticipated services. While other companies may offer similar capabilities, we believe our proprietary water plasma propulsion technology will provide a lower-cost option with enhanced safety and environmental considerations. We have notable commercial partnerships, including our agreement with SpaceX and a strong backlog, with approximately $65 million in contracts signed as of September 30, 2021. This includes both firm and optional contracts where customers may cancel with the forfeiture of their deposits. Our initial market focus will be space transportation, combining rideshare launches with last mile delivery, allowing us to offer a flexible logistics model for transporting satellites and cargo to specific locations in Low Earth Orbit. We believe this model can significantly lower launch costs for payload operators while expanding deployment options. Vigoride provides substantial advantages over small dedicated rockets, particularly for payloads below 100 kilograms, reducing launch costs by up to 80% compared to traditional methods. We are starting with a single-use version of Vigoride but plan to transition to a reusable vehicle by the middle of the decade, allowing for multiple deliveries to various orbits. Looking at market trends, the demand for small satellites is rapidly growing. Before 2018, only a few dozen small satellites were launched annually, but now that number has risen to several hundred. Northern Sky predicts the market for small satellite missions will double in the next three years. We are developing Vigoride and our service offerings to capitalize on this growth, especially with the rollout of larger, more economical rockets. Looking ahead, we anticipate our total addressable market could multiply by 5 to 10 times as we extend our capabilities from Low Earth Orbit to further out. However, in the short term, our priority remains achieving initial operational capability with Vigoride, and we plan to earn our opportunity to expand by demonstrating its effectiveness. Next, we will show a video demonstrating Vigoride's transportation services. Darryl will provide the video narration. Following that, we plan to offer our hosted payload service, as outlined on slide 11. Regarding our production status, we have completed two Vigoride vehicles, with two more in production. Vigoride 1, equipped with a 30-watt thruster, is fully built and tested. Vigoride 2 can carry larger payloads with a powerful 550-watt thruster and has completed most of its testing. We learned valuable lessons from building these initial vehicles, which we will apply to future designs. Vigoride 3 is also nearing completion and will soon undergo critical testing as we prepare for its inaugural launch. This launch will serve as a demonstration, and while we plan to carry some customer payloads, our primary goal is to test Vigoride in space and learn from any challenges encountered. Testing is crucial for validation and improvement, and while we aim for a flawless first test, we approach it with realistic expectations and a readiness to tackle issues. Beyond our planned June launch, we also intend to fly Vigoride again in the latter half of 2022, subject to the same conditions mentioned earlier. As part of our refocused strategy, we are prioritizing immediate steps and will de-emphasize the timeline for developing our larger follow-on vehicles, Ardoride and Fervoride, which will take longer to develop. This is our current plan, and I am still finalizing our 2022 strategy, with more details to be shared in our fourth quarter earnings call. Now, I will hand the floor to our CFO, Jikun Kim, to discuss the Q3 financials, after which we will open the floor for questions.

Thank you, John. Before I discuss the third quarter financial results, I would like to thank the teams at Momentus and Stable Road for getting us to a successful close. Next slide, please? On August 12, 2021, Momentus completed the reverse merger with Stable Road Acquisition Corporation, which culminated in Momentus being listed on the NASDAQ. This transaction provided us with $247 million in gross proceeds. $137 million was provided by Stable Road’s trust fund, and we raised an additional $110 million from various PIPE investors. We were pleased with the limited amount of redemptions on the trust fund and took this as a positive indicator of investor confidence in Momentus. We incurred one-time transaction-related costs of $33 million and used another $40 million to repurchase the co-founders’ shares. This share repurchase was necessary to comply with the National Security Agreement that we signed with the U.S. government and was also highly beneficial to existing shareholders. Net proceeds from the business combination totaled $175 million, which capitalizes Momentus to execute the initial phases of the long-term plan. At the close of our transaction, our ownership structure consisted of the following: 67% is owned by pre-close Momentus equity holders; 16% is owned by Stable Road’s public stockholders; 11% by PIPE investors, this excludes the SPAC sponsors; and 6% ownership by the SPAC sponsors. Next slide, please? Our third-quarter financial results reflect ongoing progress and investments toward our inaugural launch and successful transition to becoming a public company. We ended the quarter with non-restricted cash and cash equivalents of $178 million and approximately $26.5 million in outstanding gross debt. Revenue for the quarter totaled $200,000. Revenue was recognized when a customer terminated their contract for convenience and forfeited their deposits. Our cost of goods sold during the third quarter was a credit of $184,000. This credit is a reversal of a forward loss reserve that we had previously booked for a loss-generating Launch Service Agreement. The customer received a full refund. Gross profits in the third quarter were $384,000. The net loss for the quarter was $5.6 million, which included a net $24.2 million in liability mark-to-market gains and $4.8 million in transaction-related expenses. On a non-GAAP basis, adjusted EBITDA was 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 reconciliations of adjusted EBITDA to GAAP net income. Our SG&A and R&D investments have steadily increased over the prior year. Our non-GAAP SG&A expenses for the third quarter totaled $6.8 million, $4.1 million higher than the prior year. Non-GAAP R&D expenses for the third quarter totaled $9 million, $3.7 million higher than the prior years. We ended the quarter with approximately 80.6 million shares outstanding. With that, operator, we’re ready for the Q&A portion of this call.

Thank you, sir. Your first question comes from the line of Mike Maugeri from Wolfe Research.

John, you have a strong pedigree and probably had a lot of different options. Why did you end up choosing to go with Momentus?

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. But I saw Momentus developing something I wanted to be a part of bringing to the market. I will say since coming to Momentus, I continue to see market forecasts 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 that were shaping the industry. In the space industry, you see larger rockets being brought to market that are leading to lower launch costs per kilogram. And satellites are getting smaller and increasingly capable. But these smaller satellites then need to be placed in custom orbits or 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 in Momentus, and that’s where we’re placing our efforts at Momentus. So, I will say I really want 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 the vision of Momentus and the chance to bring that vision to reality.

Thank you. And then, John, again, you laid out some of the risks, but still seem pretty confident that you’re going to be able to fly in June. Am I reading that right? And if so, what gives you so much confidence in that?

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 a Launch Services Agreement with them that reserves space on the Transporter 5 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 really focused our efforts so far on firstly improving our relationship 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 in so doing, we communicated with the Defense Department on a near daily basis. Work on our Vigoride vehicles is 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 a while knows that nothing’s ever 100% certain. But based on where we sit today, we feel good about where we’re at and that we’re on pace to be able to achieve our first mission next June that is in June of 2022. But between now and then, we’ll be burning a lot of calories to make sure we get to our planned first launch.

Thank you. Next up, we have James Ratcliffe from Evercore ISI. Your line is open, sir.

Thank you. Two if I could. First of all, John, could you give us 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 Momentus services, like transport custom orbits versus more resale of launch capacity? And secondly, on the DoD process, clearly making progress there. Can you talk about what the long poles in the tent are when it comes to completing all those 62 items on the NSA? Thanks.

Sure. Let me address the second question first. Regarding the National Security Agreement, we take our obligations very seriously. We have fully implemented most of the 62 specific tasks required under the NSA and have partially completed the remaining items. The most significant remaining work involves introducing new IT systems and processes to enhance our security. This requires a considerable upfront effort, as many legacy IT systems and internal processes are being replaced. However, we believe that thorough implementation will establish a stable regulatory environment around our company and our operations. While this is necessary in the short term to meet NSA requirements, improved cybersecurity and information security will make our company more competitive in the long term. We are all aware of the recent rise in cyber incidents and ransomware affecting various companies. Although we need to manage this heavy initial workload and complete several important tasks to set up the new IT security system, we are committed to doing so. Additionally, there are other aspects of the NSA that we will continue to implement diligently. Now, regarding your first question about customer interest and trends, our backlog has remained fairly consistent since we filed our S4. We feel positive about the ongoing customer interest in our company and the services we intend to offer. There is solid demand from our customers, which is reflected in our steady backlog. We continue to see customer opportunities regularly that we are pursuing. Once we have the chance to demonstrate our capabilities with Vigoride in orbit, we expect to convert more of this customer interest into firm orders and backlog. Various third-party market forecasts suggest that the total addressable market for space transportation is expanding, and this trend is likely to continue. Overall, we feel confident about our position with customers, the alignment between their needs and our products, and our company's strategy in addressing industry mega trends, such as lower launch costs and the demand for smaller, more capable satellites, which drives the need for space infrastructure services.

Next, we have Edison Yu from Deutsche Bank. Your line is open.

Thank you, and congrats on the first quarter out of the gate. 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 list or sequence of how you think the security arrangements and kind of the operational progress will progress going forward kind of into the launch in June? So, that’s first question. And then second question more longer term. Could you maybe compare your MET technology versus some of the competitors out there, in particular in electrical and chemical space tugs? From our understanding, it’s quite a superior solution. And kind of what gives you confidence that you’ve commercialized this, which has been kind of an obstacle in the past? Thanks.

I’ll address your second question first, regarding the technology we are developing. We believe we have a unique approach with our microwave electrothermal propulsion technology, or MET technology, which uses water as a propellant. This technology has been studied in universities since the 1980s, making us pioneers in its commercialization. MET technology is particularly well suited for in-space last-mile transportation because it balances thrust and propellant efficiency. This balance is similar to fuel efficiency in cars. Unlike our competitors, who primarily use chemical propulsion systems or pure electric systems like hall thrusters, which were designed for different applications, our MET is optimized for in-space transportation. Pure electric thrusters require more power for the same thrust, and chemical thrusters have lower specific impulse, meaning they need more propellant for equivalent thrust. We believe our MET thruster can be adjusted to find the right balance between launch mass costs and transit time for our customers. Using water as a propellant also simplifies our propulsion tank feed system design, leading to reliability and lower costs. Additionally, the safety advantages of using low-pressure water tanks significantly reduce risks compared to chemical propulsion, which subsequently lowers operating costs. As for your first question about what investors and others should watch for regarding milestones and regulatory implementation, we still have tasks to complete concerning NSA implementation, particularly the replacement of legacy IT systems and other internal processes. We plan to apply for the necessary government approvals from the FAA and FCC before our launch in June. Vigoride 3, our third vehicle, will soon undergo thermal vacuum testing to simulate the space environment we aim to launch into next year. Following that, we will conduct ground vibration testing to replicate the launch experience. After Vigoride 3, we'll begin assembling our next vehicle, Vigoride 5, which represents the next generation, known as Block 2.2. Our inaugural mission is tentatively scheduled for as early as June 2022, depending on the necessary licenses, government approvals, and the successful completion of our system preparations for flight. We also anticipate a follow-on mission in the fall of 2022, subject to similar conditions and our ability to secure space on a launch provider's manifest. In summary, there is a lot happening in regulatory matters, technology development, production, and our new launch services agreement with SpaceX. These are some key developments to watch in the coming months as you follow Momentus.

Next, we have David Strauss from Barclays. Your line is open.

First question, if you could discuss the cash trajectory of the business, and to the extent that you’re funded for the drive production, and also kind of the extent to which you’ll need more cash or can generate more cash for your on-ride solutions?

So, year-to-date, we’ve spent about $8 million per month at operating cash. And you can see that on our 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 too. We do have the balance of the SEC settlement. As we increase our launch activities, you’ll see some milestones going out to our favorite launch vehicle provider, as well as we do anticipate an increased investment that John talked about on the NSA front, as well as legal bills on the CFIUS, the independent compliance consultant tied to our SEC order, and the class action lawsuit. These should be additive to our run rates. Now, some of those investments on the NSA side, they’re kind of non-recurring in nature. So, you’ll see a higher spike and then should ramp down over time. We have about $178 million in cash at the end of the third quarter. And we do see this cash sufficient to carry us through to the early part of 2023.

Just as a follow-up, could you refresh us on the price per kilogram, so Low Earth Orbit that’s implied by the bigger vehicle and maybe discuss a little bit about your comments on mid-decade reusability. And to the extent that that compares the pricing on kind of the larger end of the market, as well as some of the aspirational pricing of your small size competitors or your small launch competitors?

Let me clarify that question. We are currently seeing a price of approximately $15,000 per kilogram to Low Earth Orbit, which has been our standard pricing model historically. However, as market dynamics become more competitive, we are facing some challenges. Despite this, we continue to engage with many of our customers and our backlog remains fairly stable. Now, could you please repeat the second part of your question?

Sure. So just thinking about how that $15,000 per kilogram for Low Earth Orbit, how does that compare to maybe the current market as well as some of the aspirational pricing of these small sat launch providers?

Yes. John, are you familiar with the small sat launch providers and their pricing?

I don’t know the specific numbers.

Yes. We’ll need to follow up with you regarding the small launch vehicle providers, correct?

Sure, sure. So, Astra, Rocket Lab, Relativity.

Yes. From a mission perspective and in terms of launching to Low Earth Orbit, you will find that the larger launch vehicle providers are more cost-effective, but I don’t have specific details on the small providers. Darryl, do you have anything to add?

A Rocket Lab electron rocket costs about $7 million. If you fill it completely, the price can drop to around $25,000 to $30,000 per kilogram, but typically it is not filled to capacity. For instance, if you have a 100-kilogram payload going to orbit, you will only utilize about 40 percent of that Rocket Lab rocket, resulting in a cost of approximately $70,000 to $80,000 per kilogram. That's one data point to consider. Additionally, the cost for using a midsized or large rocket is significantly lower on a per kilogram basis.

And I would just add on to that the cost of it’s going to require us to provide an expandable Vigoride-based service. But, of course, our 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 we expect to introduce around the middle of the decade, we’ll be able to transition the reusability which should lower our costs substantially and provide not only just cost reduction opportunities but a margin expansion opportunity.

Next up, we have Austin Moeller from Canaccord. Your line is open.

So, my first question here, recently I did a 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 satellite because of the risk of space debris. So, how do you factor that sort of recent development into what’s demonstrated in your presentation about the possibility of excluding propulsion to reduce the cost per kilogram?

Well, our Vigoride vehicle and other vehicles we’re going to provide, of course, as I mentioned, it’s a very versatile vehicle that will handle not only in-space transportation, that is to say, taking small satellites, cube satellites, nano satellites to the right locations. Think of it like a bus or the UPS truck in space dropping cargo off at the right locations. And there are other services that we describe for hosted payloads, satellite servicing and the like. Debris removal, which is what you’re talking about, is a substantial opportunity because of the large numbers of small satellites, and cube sats and nano sats going up. Now, some of the larger satellites, it’s more practical to introduce built-in propulsion systems for those satellites to be commanded to therefore de-orbit or things of that nature to remove the debris. But, we think are 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, or you can have the equivalent of a truck coming by and picking up and deorbiting large numbers of satellites. And when you get down to smaller and smaller satellites, like cube sats, nano sats, the per pound, per kilogram cost of outfitting those things with their own dedicated propulsion systems 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 going to see a variety of things brought to market and commercialized. But we do think, the concept that we’re pursuing has a lot of potential and that there’s going to be a significant addressable market for it.

Okay. That makes sense. And just a follow-up, what key test objectives are you looking to demonstrate on that Vigoride launch in June? And as I understand it from the previous conversations we’ve had, there’s not going to be any customer payloads riding along for deployment on that June launch, right?

For the planned launch next June, there will be customer payloads that we will take with us to orbit. We’re planning to have paying customers that come along with us. And what we’ll do is we’ll be integrated, assuming all goes well, and we meet the caveat, as I mentioned in my statement. We will take a SpaceX Transporter-5 mission in June, go to orbit, Low Earth Orbit, and there, our primary goal to the mission will be to test Vigoride on orbit, to put it through its flight envelope, and if there are any issues that are experienced or to address us, both on-orbit and then later. I just can’t overstate though the importance of this kind of step-by-step testing. 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 testing regimen. And obviously, we would love for our first test of Vigoride in space to go flawlessly, I mean, not a single thing wrong. But, in the history of space, it’s common to experience issues that you learn from and improve upon. So, we really are approaching this first opportunity with realistic expectations born from the experience we all have and the desire to be poised to address any issues that we see occur. And I just can’t overstate the importance of this kind of philosophy from testing on the ground, testing in space, build a little, test a little, build a little, test a little. And that’s how you innovate and develop new technology that does new things that haven’t been done before in space. And that’s how we’re going to validate our design and also look for areas for improvement.

Thank you. Presenters, I’m showing no further question at this time. Ladies and gentlemen, this concludes today’s conference call. Thank you all for joining. You may all disconnect.