Pomerantz Appointed Lead Counsel in Embark Technology Securities Litigation
On July 7, 2022, U.S. District Judge Jacqueline Scott Corley of the Northern District of California (San Francisco Division) appointed Pomerantz LLP as Lead Counsel on behalf of Tyler Hardy, the Lead Plaintiff, and the class, in Hardy v. Embark Technology, Inc., 22-cv-2090 (N.D. Cal.). This securities action alleges that Embark Technology, Inc. ("Embark" or the "Company") (f/k/a Northern Genesis Acquisition Corp. II (“Northern Genesis”) failed to perform adequate due diligence related to its merger with Embark Trucks Inc. (“Legacy Embark”) (the “Business Combination”) and overstated the business and financial prospects of the Company.
Embark develops self-driving software solutions for the trucking industry in the U.S., including autonomous trucking software and a cloud-based autonomous fleet management solution featuring remote vehicle monitoring and assistance. The Company was formed through the Business Combination of Northern Genesis – a special purpose acquisition company (“SPAC”) – and Legacy Embark.
Allegations against Embark include that: (i) the Company had performed inadequate due diligence into Legacy Embark; (ii) Legacy Embark and the Company, following the Business Combination, held no patents and an insignificant amount of test trucks; (iii) accordingly, the Company had overstated its operational and technological capabilities; and (iv) as a result of the foregoing, the Company had overstated the business and financial prospects of the Company post-Business Combination.
On January 6, 2022, The Bear Cave published a short report entitled “Problems at Embark Technology (EMBK)” in which it alleged, among other issues, “that Embark appears to lack true economic substance” and that its “current evaluation appears to be based on puffery rather than actual substance”, noting that “[t]he company holds no patents, has only a dozen or so test trucks, and may be more bark than bite.”
On this news, Embark’s share price fell 16.7%.