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Volume XI, Number 335

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CFIUS Mitigation: Mikhail Kokorich and Momentus Inc.

Status:  Mitigation

Acquirer:  Mikhail Kokorich (Russia)

Acquired:  Momentus Inc. (US)

Value:  US$1.2 billion

Industry:  Space

On October 7, 2020, Stable Road Acquisition Corp., a special purpose acquisition company formed by SRC-NI Holdings, LLC, an affiliate of Stable Road Capital, entered into an agreement to acquire, by way of merger, Momentus Inc., a US commercial space company offering in-space transportation and infrastructure services.  (See Press Release, Stable Road Acquisition Corp. Form 8-K, Ex-99.1, Oct. 7, 2020, SEC Filing.)   In relation to this proposed transaction, Stable Road Acquisition Corp. disclosed that, on January 21, 2021, Momentus became aware of US government concerns related to the “the foreign ownership and control of Momentus by Mikhail Kokorich, Momentus’ co-founder and former Chief Executive Officer, and Lev Khasis, Momentus’ co-founder and former director, and their associated entities . . .”  (Stable Road Acquisition Corp. Amendment No. 1 to Schedule 14A, Apr. 7, 2021, SEC Filing.)

“In an effort to further accelerate the resolution of these concerns, on February 6, 2021, Momentus, Mr. Kokorich and the Company voluntarily submitted a joint notice to the Committee on Foreign Investment in the United States (“CFIUS”) for review of the historical acquisition of interests in Momentus by Mr. Kokorich, his wife, and entities that they control. CFIUS accepted the notice by letter dated February 24, 2021. In that letter, CFIUS confirmed that February 25, 2021 is the first day of the initial, 45-day statutory “review” period and that this review will conclude no later than April 12, 2021. Upon the end of the review period, CFIUS may initiate an “investigation” of up to 45 days regarding the transactions under review, which investigation would conclude no later than May 27, 2021.  . . . .  CFIUS has indicated to the parties that it is drafting a mitigation agreement, called a National Security Agreement . . .”  (Id.)

On June 9, 2021, Momentus “announced that it has finalized and signed a National Security Agreement (“NSA”) with the Department of Defense and Department of the Treasury as lead agencies on behalf of the Committee on Foreign Investment in the United States.” (Press Release, Stable Road Acquisition Corp. Form 8-K, Ex-99.1, Jun. 9, 2020, SEC Filing.)   “As part of the NSA, Momentus will be required to implement increased security measures, hire key positions to provide additional oversight and appoint a CFIUS-approved director to its board of directors to oversee compliance with the NSA’s stipulations.” (Id.)

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 168
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