The law firm of Kessler Topaz Meltzer & Check, LLP announces that a securities fraud class action lawsuit has been filed against Stable Road Acquisition Corp. (NASDAQ: SRAC; SRACW; SRACU) (“Stable Road”) on behalf of those who purchased or acquired Stable Road securities between October 7, 2020 and July 13, 2021, inclusive (the “Class Period”).
Investor Deadline Reminder: Investors who purchased or acquired Stable Road securitiesduring the Class Period may, no later than September 13, 2021, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453; toll free at (844) 887-9500; via e-mail atinfo@ktmc.com; orclick https://www.ktmc.com/stable-road-class-action-lawsuit?utm_source=PR&utm_medium=link&utm_campaign=stable_road
Stable Road is a special purpose acquisition company. SRC-NI Holdings, LLC (the “Sponsor”) served as the sponsor of Stable Road during the Class Period. In November 2019, the Sponsor, Brian Kabot, Stable Road’s Chief Executive Officer (“CEO”) and Chairman, and James Norris, Stable Road’s Chief Financial Officer, took Stable Road public via an initial public offering (the “IPO”). While Stable Road did not identify any target companies at the time of the IPO, the IPO offering materials stated that Stable Road planned to pursue an acquisition focused in the cannabis sector. Momentus Inc. (“Momentus”) was an acquisition target of Stable Road during the Class Period. Momentus is a private commercial space company headquartered in Santa Clara, California.
The Class Period commences on October 7, 2020, when Stable Road and Momentus issued a joint press release announcing that Stable Road had agreed to acquire Momentus in a proposed merger, subject to shareholder approval (the “Merger”). On October 13, 2020, Stable Road filed on a 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 complaint alleges that the defendants failed to disclose the adverse facts about Momentus’ business, operations, and prospects and Stable Road’s due diligence activities in connection with the Merger.
The truth began to emerge on January 25, 2021, when Momentus announced that Mikhail Kokorich, the founder and CEO of Momentus, had resigned his position “in an effort to expedite the resolution of U.S. government national security and foreign ownership concerns surrounding the Company.” Following this news, the price of Stable Road securities declined. Over three trading days, the price of Stable Road Class A stock fell $4.75, or 19%, to close at $20.10 on January 27, 2021.
Then, on July 13, 2021, the U.S. Securities and Exchange Commission (“SEC”) announced charges against Stable Road, the Sponsor, Momentus, Mr. Kabot and Mr. Kokorich for making “misleading claims about Momentus’ technology and about national security risks associated with Kokorich.” The release stated that all parties other than Mr. Kokorich had settled the charges against them for $8 million in total, while the case against Mr. Kokorich continued. Also on July 13, 2021, the SEC publicized a cease-and-desist order and complaint against Mr. Kokorich which detailed the defendants’ scheme to defraud investors in connection with the Merger. Following this news, the price of Stable Road securities declined. On July 14, 2021, the price of Stable Road Class A stock fell $1.22 per share, or 10%, to close at $10.66.
The complaint alleges that the defendants misrepresented and failed to disclose that: (1) Momentus’ 2019 test of its key technology, a water plasma thruster, had failed to meet Momentus’ 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; (2) the U.S. government had conveyed that it considered Mr. Kokorich a national security threat, which jeopardized Mr. Kokorich’s continued leadership of Momentus and Momentus’ launch schedule and business prospects; (3) as a result of the 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 (4) Stable Road had failed to conduct appropriate due diligence of Momentus and its business operations and the defendants had materially misrepresented the due diligence activities being conducted by the Sponsor and Stable Road executives in connection with the Merger.
Stable Roadinvestors may, no later than September 13, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
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