Legal Proceedings Update
Putative Class Actions
On March 16, 2023, purported stockholders of Momentus Inc. (the “Company”) filed a putative class action complaint against certain current and former
directors and officers of the Company in the Delaware Court of Chancery, in a case captioned Lora v. Kabot, et al., Case No. 2023-0322. The complaint alleges that the defendants made certain material
misrepresentations, and omitted certain material information, in their public statements and disclosures regarding the business combination of the Company, formerly known as Stable Road Acquisition Corp. (“SRAC”), and legacy Momentus Inc. (the
“Business Combination”), in violation of the securities laws, and seeks damages on behalf of a putative class of stockholders who purchased SRAC stock on or before August 9, 2021. The putative class action does not name the Company as a defendant.
Regardless, the current and former directors and officers of the Company named as defendants have demanded indemnification and advancement from the Company under the terms of the merger agreement and the exhibits thereto, the Delaware corporate code,
the Company’s bylaws, and their individual indemnification agreements. The Company may be liable for the fees and costs incurred by the defendants, and may have an obligation to advance such fees during the pendency of the litigation.
On March 17, 2023, purported stockholders of the Company filed a putative class action complaint against certain current and former directors and
officers of the Company in the Delaware Court of Chancery, in a case captioned Burk v. Kabot, et al., Case No. 2023-0334. Like the Lora complaint, the Burk complaint alleges that the defendants made certain material misrepresentations, and omitted certain material information, in their public statements and disclosures regarding the Business Combination in
violation of the securities laws, and seeks damages on behalf of a putative class of stockholders who purchased SRAC stock on or before August 9, 2021. The putative class action does not name the Company as a defendant. Regardless, the current and
former directors and officers of the Company named as defendants have demanded indemnification and advancement from the Company under the terms of the merger agreement and the exhibits thereto, the Delaware corporate code, the Company’s bylaws, and
their individual indemnification agreements. The Company may be liable for the fees and costs incurred by the defendants, and may have an obligation to advance such fees during the pendency of the litigation.
Khasis Litigation
On June 8, 2021, former co-founders and shareholders of the Company, Mikhail Kokorich and Lev Khasis, signed the National Security
Agreement with the U.S. government, represented by the U.S. Departments of Defense and the Treasury, and Mr. Kokorich, on behalf of himself and Nortrone Finance S.A. (an entity controlled by Mr. Kokorich), Lev Khasis and Olga Khasis, each in their
respective individual capacities and on behalf of Brainyspace LLC (an entity controlled by Olga Khasis) (the “NSA”), in addition to associated stock repurchase agreements, whereby they agreed to divest their interests in the Company in exchange
for cash payments and other considerations. As part of the NSA and stock repurchase agreements, Messrs. Kokorich and Khasis agreed to a waiver and release of all claims (broadly defined) against the Company. The Company has maintained that this
release is effective as to various advancement and indemnification claims either individual may have against the Company. A description of a complaint filed by Mr. Kokorich against the Company in the Delaware Court of Chancery seeking
indemnification and advancement of expenses from the Company was described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
On March 17, 2023, Mr. Khasis filed a verified complaint against the Company in the Delaware Court of Chancery (Case. No. 2023-0361)
seeking indemnification and advancement of expenses from the Company. The Company disputes the allegations in the complaint and intends to vigorously defend the litigation.
SAFE Note Litigation
On July 20, 2022, The Larian Living Trust ("TLLT") filed an action against the Company in New Castle County Superior Court, Delaware, in
the Complex Commercial Litigation Division, Case No. N22C-07-133 EMD CCLD. TLLT pleads claims for fraudulent inducement and breach of contract arising from two investment contracts pursuant to which TLLT alleges it invested $4 million in the
Company. TLLT alleges that a "liquidity event" occurred when the Company closed the Business Combination, such that it was entitled to the greater of its $4 million investment or its “Conversion Amount” of the Company’s shares, which was a total of
724,995 shares of the Company’s stock. TLLT further alleges that the Company refused to provide it the conversion amount of shares until April 2022, at which point the value of its shares had dropped significantly from their peak value in August of
2021, in excess of $7.6 million. TLLT seeks damages in excess of $7.6 million, in addition to interests and its attorney's fees and costs. On March 16, 2023, the Company’s motion to dismiss TLLT’s claims was denied and the parties will move forward
with discovery. The Company disputes the allegations in the complaint and intends to vigorously defend the litigation.