Business Context and Reporting Period
Momentus Inc. filed this Form 8-K on March 30, 2023, under Item 8.01 to provide an update on legal proceedings. The filing does not report operating or financial results for a specific quarter or year.
Financial and Liquidity Information
The filing does not provide revenue, profit, cash flow, margin, debt, liquidity, or other operating metrics. It also does not quantify any accrued liability or reserve related to the proceedings described below.
Material Legal Developments
- Putative class action—Lora v. Kabot: Filed March 16, 2023, in the Delaware Court of Chancery against certain current and former directors and officers. The complaint alleges material misrepresentations and omissions concerning the business combination with Stable Road Acquisition Corp. and seeks damages for stockholders who purchased SRAC stock on or before August 9, 2021. Momentus is not named as a defendant, but the individual defendants have demanded indemnification and advancement of expenses from the Company.
- Putative class action—Burk v. Kabot: Filed March 17, 2023, in the Delaware Court of Chancery. The allegations are substantially similar to those in Lora. Momentus is not named as a defendant, but the individual defendants have demanded indemnification and advancement of expenses.
- Khasis litigation: On March 17, 2023, former co-founder Lev Khasis filed a Delaware Court of Chancery complaint seeking indemnification and advancement of expenses. The Company disputes the allegations and intends to vigorously defend the matter.
- SAFE note litigation: The Larian Living Trust alleges that it invested $4 million under two investment contracts and was entitled to either repayment of its investment or 724,995 Company shares following the business combination. It seeks damages in excess of $7.6 million, plus interest, attorneys’ fees, and costs. On March 16, 2023, the Company’s motion to dismiss was denied, and the parties will proceed with discovery. The Company disputes the allegations and intends to vigorously defend the litigation.
Risks, Contingencies, and Management Commentary
- Momentus may be required to indemnify the current and former directors and officers named in the putative class actions and may have to advance their legal fees while the litigation is pending.
- The filing states that the Company disputes the allegations in the Khasis and SAFE note matters and intends to vigorously defend them.
- The filing references a prior indemnification and advancement complaint by former co-founder Mikhail Kokorich, previously described in the Company’s 2022 Form 10-K, but provides no new status or resolution.
- No guidance, outlook, litigation-loss estimate, settlement amount, or assessment of the likelihood of an unfavorable outcome is provided.
Investor Verification Points
- Review the subsequent docket activity, discovery developments, and potential outcomes in the Lora, Burk, Khasis, and SAFE note cases.
- Verify whether indemnification or advancement obligations result in material legal fees, cash payments, or accruals in later financial statements.
- Assess whether the SAFE note claim or the putative class actions lead to settlements, judgments, additional claims, or impacts on liquidity.
- Compare later Form 10-K and Form 10-Q disclosures for updates to the Company’s legal contingency assessments.