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Canaan X LP v. MoneyLion Inc.

Information Omitted From Proxy Statement Not Shown To Be Material; Was in 'Total Mix'

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OPINION AND ORDER The Court briefly summarizes the backdrop to plaintiffs’ claim under section 14(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and defendants’ motion to dismiss that claim. MoneyLion Inc. (“MoneyLion”) acquired Even Financial Inc. (Complaint, ECF 1, 27). Plaintiffs owned shares of Even Financial, Inc., and received MoneyLion Series A Preferred Convertible Stock (the “Preferred Stock”) as part of the acquisition. (Id.). The Preferred Stock’s Certificate of Designations provided that each share of Preferred Stock would be converted into MoneyLion’s Class A Common Stock (the “Common Stock”) if MoneyLion’s stock price “equal[ed] or exceed[ed] $10.00 on any twenty (20) Trading Days…within any consecutive thirty (30) Trading Day period.” (Id. 29). Unrelatedly, the New York Stock Exchange (the “NYSE”) notified MoneyLion that its average closing price for its Common Stock had fallen below the $1.00 minimum requirement for continued listing on the NYSE and that it had six months to regain compliance with the minimum share price requirement. (Id.

65-66, ECF 56-1, at 14). In an effort to increase its stock price, MoneyLion’s Board of Directors filed a March 31, 2023 Proxy Statement with the United States Securities and Exchange Commission that invited MoneyLion’s shareholders to grant the Board discretion to effectuate a Reverse Stock Split at ratio between 1-for-2 and 1-for-30. (Id. 33). MoneyLion’s shareholders voted to authorize the Reverse Stock Split, and on April 24, 2023, within the six-month window set by the NYSE, MoneyLion’s Board effectuated the Reverse Stock Split at a 1-for-30 ratio. (Id.

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