NEW YORK, Oct. 17, 2020 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against YayYo, Inc. ("YayYo" or the "Company") (NASDAQ: YAYO) and certain of its officers. The class action, filed in United States District Court for the Central District of California, and docketed under 20-cv-08591, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise, acquired YayYo common stock pursuant and/or traceable to the registration statement and related prospectus (collectively, the "Registration Statement") issued in connection with YayYo's November 13, 2019, initial public offering (the "IPO" or "Offering"), seeking to recover compensable damages caused by Defendants' violations of the Securities Act of 1933 (the "Securities Act").
If you are a shareholder who purchased YayYo common stock pursuant and/or traceable to the registration statement and related prospectus (collectively, the "Registration Statement") issued in connection with YayYo's November 13, 2019, IPO, you have until November 9, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
YayYo, Inc., through its subsidiaries, engages in developing vehicle rental platform in the United States. It operates Rideshare Platform, an online peer-to-peer booking platform that rents standard passenger vehicles to self-employed ridesharing drivers; and manages a fleet of standard passenger vehicles to be rented directly to drivers in the ridesharing economy through the Rideshare Platform.
The Complaint alleges that the Registration Statement featured false and/or misleading statements and/or failed to disclose that: (1) defendant Ram El-Batrawi ("El-Batrawi") continued to exercise supervision, authority, and control over YayYo and was intimately involved, on a day-to-day basis, with the business, operations, and finances of the company, including assisting the Underwriter Defendants in marketing YayYo's IPO; (2) defendant El-Batrawi never sold the 12,525,000 "Private Shares" and continued to own a controlling interest in YayYo despite the NASDAQ's insistence that he retain less than a 10% equity ownership interest in connection with the listing agreement; (3) defendants promised certain creditors of YayYo that in exchange to their agreeing to purchase shares in the IPO – in order to permit the Underwriter defendants to close the IPO – YayYo would repurchase those shares after the IPO; (4) defendants intended to repurchase shares purchased by creditors of YayYo in the IPO using IPO proceeds: (5) YayYo owned its former President, CEO, and Director a half of million dollars at the time of the IPO; (6) YayYo owed SRAX, Inc. (formerly Social Reality, Inc.) $426,286 in unpaid social media costs, most of which was more than a year overdue as payment had been delayed while YayYo attempted to complete its IPO; and (7) as a result of the foregoing, defendants' statements about the Company's business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
On January 13, 2020, YayYo filed with the Securities and Exchange Commission ("SEC") a Form 8-K announcing that "[o]n January 10, 2020, YayYo Inc.  entered into an Executive Employment Agreement  with the Company's Chief Executive Officer, Jonathan Rosen ("Rosen"), pursuant to which Mr. Rosen will continue to serve as the Company's Chief Executive Officer for one year or until terminated in accordance with the Agreement."
On January 24, 2020, YayYo filed an action for declaratory judgment and permanent injunction against Defendant El-Batrawi in the Superior Court of the State of California, County of Los Angeles, Case No. 20STCP00309, alleging in pertinent part: Despite leaving the Company following concerns from NASDAQ regarding his involvement in the day-to-day operations of YayYo in September 2019, Defendant [El-Batrawi] has engaged in a continuous course of actions misrepresenting himself as affiliated with, speaking on behalf of, and authorized or empowered by YayYo. In so doing, Defendant [El-Batrawi] has purported to bind the Company to contracts, direct its employees, change its website, and event to attempted to sell the Company to its competitors.
In a declaration filed with YayYo's complaint in support of a temporary restraining order, Defendant Rosen testified that despite having promised in September 2019 in connection with his resignation to have "no formal or informal affiliation between the Company and [El-Batrawi], expect [sic] for [his] minority ownership (less than 10%) in the Company" (emphasis in original), "[Defendant El-Batrawi] [had] continue[d] to operate and hold himself out as if a director or officer of YayYo, or as an otherwise authorized representative of the same." Defendant Rosen further testified that despite the Registration Statement having expressly stated that Defendant El-Batrawi had already sold the 12,525,000 shares of YayYo prior to the IPO, in reality "Defendant El-Batrawi ha[d] failed and/or refused to sell his shares of stock in the Company . . . ." Defendant Rosen further admitted this had all been going on since September 2019, well before the IPO, including testifying in pertinent part that "[s]ince [September 2019], Defendant El-Batrawi has engaged in a continuous and escalating pattern of behavior destructive to YayYo . . . ." Defendant Rosen testified that Defendant El-Batrawi's misconduct between September 2019 and January 2020 had included, among other things, contacting competitors, suppliers, and vendors of YayYo and negotiating with them as a representative of YayYo; meeting with financiers and investment firms about investing in YayYo and claiming to represent YayYo; hiring a public relations firm for YayYo and producing and airing commercials for YayYo on the Fox Business Channel; attempting to hire two marketing firms for YayYo; and directing that changes be made to YayYo's website.
On January 27, 2020, YayYo filed a Form 8-K with the SEC announcing that Defendants Jeffrey J. Guzy, Christopher Miglino, and Paul Richter had been replaced as Board members and that Defendant Rosen was no longer the CEO of YayYo.
On February 10, 2020, YayYo issued a press release entitled "YayYo, Inc. Announces Intention to Voluntarily Delist Its Common Stock From the NASDAQ Capital Market Effective February 20, 2020" disclosing that the new Board would delist YayYo common stock from the NASDAQ.
On February 11, 2020, SRAX filed a collection action against YayYo in the Superior Court of the State of California for the County of Los Angeles, Case No. 20STCV05559, alleging that SRAX had provided media services to the Company dating back to 2018, and claiming breach of contract and related causes of action. SRAX alleged that YayYo then owed it $645,286—including $426,286 for services rendered prior to time of the IPO. In its complaint, SRAX alleged that YayYo claimed to be "unable to pay" for the services prior to the IPO "apparently due to a delay in its [IPO]." Though the invoices for the services attached to the complaint filed by SRAX were signed by Defendant El-Batrawi, an email attached to the complaint dated January 24, 2020 from Defendant Rosen stated that other than $50,000 that had apparently been paid to SRAX from the IPO proceeds on January 23, 2020, YayYo would be unable to pay the rest of the outstanding bill until it obtained additional outside financing.
On March 3, 2020, former YayYo President, CEO, and Director Anthony Davis filed a complaint for damages, declaratory relief, failure to pay wages in violation of labor code 201, et. seq., violation of California's Unfair Competition Laws (Business & Professions Code § 17200, et seq.), breach of contract, intentional misrepresentation and fraud, and promissory fraud against YayYo.
On April 28, 2020, FirstFire Global Opportunities Fund, LLC ("FirstFire") filed a complaint against underwriters for the IPO in the U.S. District Court for the Southern District of New York, Case No. l:20-cv-03327. Among other things, FirstFire alleges that the Registration Statement used to conduct the IPO was materially false and misleading because it concealed Defendant El-Batrawi's ongoing control over the company and its IPO process. FirstFire further alleges that when the underwriters for the IPO were unable to raise the full $10 million required by NASDAQ to close the IPO, Defendant El-Batrawi fabricated a $1.2 million commitment purportedly from a trust, which turned out to be a lie. FirstFire also alleges that the underwriters for the IPO and Defendant El-Batrawi solicited creditors and shareholders to invest more money to close the IPO, and "sought to sweeten the attraction of such further investment" by agreeing that YayYo would "immediately" pay them back from the IPO proceeds, an "unlawful act" that would "materially misrepresent the Offering and fraudulently mislead investors[.]" FirstFire further alleges that the underwriters for the IPO told investors that YayYo planned to use the IPO proceeds to purchase vehicles, as well as for general corporate purposes, including working capital and sales and marketing activities, but that in reality, YayYo had no intention to do so.
Since the IPO, and as a result of the disclosure of material adverse facts omitted from the Company's Registration Statement, YayYo's stock price has fallen significantly below its IPO price, damaging Plaintiff and Class members.
As of the filing of this Complaint, YayYo's stock last closed at $0.29 per share on September 17, 2020, representing a 92.75% decline from the price the stock was offered at in the IPO.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
SOURCE Pomerantz LLP