SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on Investment in Stable Road Acquisition Corp. of Class Action Lawsuit and Upcoming Deadline – SRAC; SRACW; SRACU
Pomerantz LLP
6 min read
NEW YORK, Aug. 31, 2021 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Stable Road Acquisition Corp. (“Stable Road” or the “Company”) (NASDAQ: SRAC; SRACW; SRACU) and certain of its officers. The class action, filed in the United States District Court for the Central District of California, and docketed under 21-cv-06287, is on behalf of all purchasers of Stable Road securities (the “Class”) between October 7, 2020 and July 13, 2021, inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired Stable Road securities during the Class Period, you have until September 13, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Stable Road was launched as a special purpose acquisition company, or “SPAC.”
October 7, 2020, Stable Road and Momentus Inc. (“Momentus”), an acquisition target of Stable Road, issued a joint press release announcing that the Company had agreed to acquire Momentus in a proposed merger, subject to shareholder approval (the “Merger”). Although outside of Stable Road’s claimed target industry, the press release stated that the Merger would “create the first publicly traded space infrastructure company at the forefront of the new space economy.” The release also stated that “[i]n 2019, the Company successfully tested its water plasma propulsion technology in space.”
On October 13, 2020, Stable Road filed with the Securities and Exchange Commission (“SEC”) on Form 8-K an investor presentation regarding the Merger. The investor presentation stated that Momentus had an enterprise value of $1.2 billion and stated that its “Groundbreaking Water Propulsion Technology” had been “[s]uccessfully tested . . . on a demo flight launched mid-2019.” The investor presentation also highlighted the “Exceptional Team” at Momentus led by the company’s “Visionary Founder,” Defendant Mikhail Kokorich.
On November 2, 2020, Stable Road filed with the SEC a registration statement on Form S-4 for shares to be issued in the Merger (“Registration Statement”). The Registration Statement highlighted Momentus’s “Valuable Intellectual Property,” and stated in pertinent part: “Since its founding in 2017, Momentus has developed a portfolio of technologies, including its cornerstone water plasma propulsion technology, which it successfully tested in space in 2019.” The Registration Statement also represented that Momentus was on track to achieve $19 million in revenues during 2021, which was expected to rise to $152 million in revenues by 2022 and over $4 billion in revenues by 2027. Furthermore, although the Registration Statement stated that Momentus was considered a “foreign person” by The Committee on Foreign Investment in the United States and thus subject to a national security review, it omitted any disclosure that Defendant Kokorich himself was considered by U.S. government officials to pose a serious national security threat, thereby jeopardizing Momentus’s launch schedule and undermining its revenue projections.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, prospects, and Stable Road’s due diligence activities in connection with the Merger, which were known to Defendants or recklessly disregarded by them, as follows: (i) that Momentus’s 2019 test of its key technology, a water plasma thruster, had failed to meet Momentus’s own public and internal pre-launch criteria for success, and was conducted on a prototype that was not designed to generate commercially significant amounts of thrust; (ii) that the U.S. government had conveyed that it considered the CEO of Momentus, Defendant Kokorich, a national security threat, which jeopardized Defendant Kokorich’s continued leadership of Momentus and Momentus’s launch schedule and business prospects; (iii) that, as a result of (i) and (ii) above, the revenue projections and business and operational plans provided to investors regarding Momentus and the commercial viability and timeline of its products were materially false and misleading and lacked a reasonable basis in fact; and (iv) that Stable Road had failed to conduct appropriate due diligence of Momentus and its business operations and Defendants had materially misrepresented the due diligence activities being conducted by Stable Road executives in connection with the Merger.
On January 25, 2021, Momentus announced that Defendant Kokorich had resigned his position as CEO of Momentus “in an effort to expedite the resolution of U.S. government national security and foreign ownership concerns surrounding the Company.”
On this news, the price of Stable Road Class A stock fell $4.75 over three trading days, or 19%, to close at $20.10 per share on January 27, 2021.
On July 13, 2021, the SEC announced charges against Stable Road, SRC-NI Holdings, Momentus, Defendant Brian Kabot and Defendant Kokorich for making “misleading claims about Momentus’s technology and about national security risks associated with Kokorich.” The release stated that all parties other than Defendant Kokorich had settled the charges against them for $8 million in total, while the case against Defendant Kokorich continued.
Also on July 13, 2021, the SEC publicized a cease-and-desist order and complaint against Defendant Kokorich which detailed Defendants’ scheme to defraud investors in connection with the Merger.
On this news, the price of Stable Road Class A stock fell $1.22 per share, or 10%, to close at $10.66 per share on July 14, 2021.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
