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Stable Road Acquisition Corporation, a special-purpose acquisition company (SPAC), said May 6 it adjourned a special meeting of its shareholders convened that day because it didn’t have enough votes to approve one measure on the ballot.
That measure is not the approval of Stable Road’s merger with Momentus, announced in October, but instead a three-month extension of the deadline for Stable Road to complete the deal. SPACs traditionally have a limited period of time for which to use the funding raised by going public to merge with a company, or else the proceeds are returned to shareholders.
Stable Road sought to extend that deadline for completing the merger with Momentus from May 13 to Aug. 13. At the time of the shareholder meeting May 6, the vast majority of votes it had received were in favor of the extension, but those votes accounted for less than 59% of outstanding shares. The company needs at least 65% of shares to vote in favor of the extension to go into effect.
The company said in a May 6 statement that it adjourned that special meeting of shareholders until May 13 because it “is in the best interest of its stockholders to provide additional time for stockholders to vote to approve the Extension Amendment Proposal.”
If the company doesn’t get enough votes in favor of the extension by May 13, the SPAC will be liquidated and its merger with Momentus will be off. Shareholders will receive $10.03 per share in the SPAC. Shares in Stable Road were trading May 7 at a little less than $11 per share, down from a high of $29.18 per share earlier this year.
Stable Road has gone to great lengths to encourage shareholders to vote for the extension, such as a series of social media postings and press releases. Leadership of both Stable Road and Momentus conducted a one-hour webinar May 4 to make their case for both the extension and the overall merger.
Brian Kabot, chairman and chief executive of Stable Road, said at that webinar that this SPAC had an 18-month deadline from when it was created to close a deal, less than the 24 months more commonly used by SPACs. “We’re asking for a three-month extension, which still only takes us to 21 months, right?” he said. “There’s plenty of 24-month SPACs out there that are gonna need three- and six-month extensions.”
The merger has been slowed by a number of issues with Momentus, including investigations by the federal government into its foreign ownership. Momentus has taken several steps to address those issues, replacing its Russian co-founder, Mikhail Kokorich, as chief executive and having him and Brainyspace LLC, a firm owned by co-founder Lev Khasis and his wife, agree to divest their shares within three years.
Momentus said in April that it was still working on various regulatory issues, such as a voluntary review of its ownership structure by the Committee on Foreign Investment in the United States. The company also said it was still awaiting a payload review by the Federal Aviation Administration to allow it to launch its first space tug, Vigoride-1, on a SpaceX rideshare mission in June. Those reviews forced Momentus to take Vigoride off a similar rideshare mission in January.
During the May 4 webinar, Rob Schwarz, chief technology officer at Momentus, said the Vigoride-1 tug is ready for launch but that the company was awaiting regulatory approvals. “It’s ready to go and it will, assuming we get all our licenses,” he said. “We still are waiting for the government to grant our final licenses so that we can launch. But assuming all that comes in, then, we are planning to launch in June, at the end of June of this year. So, just in a couple months. We’re all super psyched.”