Vaya Space Inc. promoted former Chief Financial Officer Kevin Lowdermilk to interim CEO this month, replacing Brent David Willis, who the U.S. Securities and Exchange Commission alleges committed fraud from 2017-2019 during his time as CEO of Midvale, Utah-based NewAge Inc.
Cocoa-based rocket startup Vaya Space on May 4 announced Willis replaced CEO Grant Begley, who remains a member of the Vaya Space board of directors. However, Vaya Space on Jan. 19 filed a fundraising document with the SEC that listed Lowdermilk as the CEO.
New leadership for Vaya Space
Lowdermilk became CEO of Vaya Space in January, he told Orlando Inno. As of Jan. 27, Willis served as managing director of Vaya Space, according to his LinkedIn profile.
This year is pivotal for Vaya Space, which developed the Star 3-D rocket engine, a hybrid engine that uses liquid and solid propellant, and the Dauntless rocket, to launch payloads into space for the growing small satellite sector.
In 2023, the 6-year-old company will hold the first full-scale demonstrations of its engine — which puts out 18,000 pounds of thrust — and the first and second stages of the Dauntless rocket in preparation for Vaya Space's first launch in 2024.
Vaya Space this month raised $12 million from investors to fund these demonstrations.
Lowdermilk became Vaya Space's chief financial officer in August, and he previously was CEO of Melbourne-based aerospace/defense supply chain firm The ISO Group from 2010-2015 and CEO of Herndon, Virginia-based cybersecurity company Exostar from 2006-2010, according to his LinkedIn profile.
Vaya Space needs Lowdermilk's experience in such a crucial year for the company, which is why the leadership change was carried out, he said. "I have held both the CEO and CFO roles previously, and Vaya Space is now at a real inflection point where that operational and financial experience is needed."
Lowdermilk did not respond to a question from Orlando Inno regarding what role the SEC investigation into Willis played in the leadership change at Vaya Space.
SEC case against Willis continues
Five months into Willis's stint as Vaya Space CEO, the SEC on Oct. 18 filed a complaint with the U.S. District Court for the District of Colorado against Willis.
Beginning in July 2017, the complaint states, Willis began putting out public statements that allegedly vastly overstated the scope of distribution deals NewAge signed or that spoke of deals that were not consummated at all.
The SEC alleges all these actions took place while Willis was the CEO of NewAge, which was headquartered in Denver until the company relocated its corporate headquarters to Midvale, Utah, on March 1, according to a NewAge filing with the SEC.
Vaya Space is not mentioned in the SEC’s complaint and is not part of the agency’s investigation.
The complaint from the SEC alleges Willis's actions violated the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC’s full complaint can be read here.
In the complaint, the SEC asks a judge to order Willis to “disgorge ill-gotten gains received during the period of violative conduct and pay prejudgment interest on such ill-gotten gains” and to pay unspecified civil monetary penalties under federal law. It also asks that he be prohibited from serving as an officer or director of any public company and that he be prohibited from offering any penny stocks.
Willis’s attorney, Michael Diver of Chicago-based Katten Muchin Rosenman LLP, previously told Orlando Inno the allegations against Willis are untrue, and Willis and his legal team will dispute them in court.
The case remains active. Willis on Jan. 24 filed a motion to dismiss the SEC's complaint, but a judge has not ruled on that motion, according to U.S. District Court for the District of Colorado records.
The fact Willis and his attorney are battling the accusations in court is fairly uncommon. It's likely between 50-60% of cases brought by the SEC are settled before they come to a resolution through a trial, Jay Kesten, a Florida State University College of Law associate professor focused on corporate governance, previously told Orlando Inno.
"The SEC is very successful," Kesten said. "When they have finally filed a case, they win in a supermajority of cases."
The 62-year-old Willis was appointed CEO and a director of NewAge on March 24, 2016, and Willis and the company’s board of directors reached a resignation agreement on Jan. 10, 2022.
Neither NewAge nor its current or other former employees are defendants in the case, as Willis is the only defendant listed in the complaint.
Denver Business Journal Senior Reporter Ed Sealover contributed to this report.
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