Pomerantz Appointed Lead Counsel in YayYo Securities Litigation

On December 1, 2020, U.S. District Judge Stephen V. Wilson of the Central District of California appointed Pomerantz LLP as Lead Counsel on behalf of Lead Plaintiff Bernard Bednarz in Jason Hamlin v. YayYo, Inc. et al, 2:20-cv-08235-SVW-AFM, a securities litigation being pursued on behalf of a class of defrauded investors concerning allegations that YayYo, Inc. (“YayYo” or the “Company”) issued a materially deficient Registration Statement for its initial public offering (“IPO”), violating their independent, affirmative duty to provide adequate disclosures about adverse conditions, risk, and uncertainties.

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.

In November 2019, the defendants held the IPO pursuant to the Registration Statement, issuing approximately 2,625,000 shares to the investing public at $4.00 per share, for approximate proceeds to the Company of $9,660,000 after applicable underwriting discounts and commissions.

The complaint alleges that the Registration Statement featured false and/or misleading statements and/or failed to disclose that:  (i) 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; (ii) 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; (iii) 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; (iv) defendants intended to repurchase shares purchased by creditors of YayYo in the IPO using IPO proceeds:  (v) YayYo owned its former President, CEO, and Director a half of million dollars at the time of the IPO; (vi) 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 (vii) 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.

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. By the commencement of this securities litigation in September 2020, the Company’s common stock was trading at $0.28 per share, a 93% decline from the $4.00 IPO price.