ASYI – Merus Capital: take the money and run?????
On February 8, 2008, Merus Capital invested $5,000,000.00 in Stephen Johnston’s Air Intelligence System’s company, which, at that time, was privately owned by Johnston and Roy Miller (the inventor of the Jetengine BPS software).
A special “liquidation clause” in that investment gave Merus Capital the right to fully liquidate its investment in exchange for a $5,000,000.00 promissory note from ASYI that would bear interest at the rate of 5% per year. (I’ve set forth the complete wording of the liquidation clause at the bottom of this posting).
The liquidation clause was to be triggered by any “going public event” involving Air Intelligence Systems, such as an IPO or a reverse merger. Once triggered, Merus Capital would have 3 years to decide whether or not to liquidate its investment.
On March 19, 2010, Air Intelligence Systems triggered the liquidation clause as a result of reverse-merging into Wolf Resources (which immediately changed its ticker symbol into ASYI).
That then meant that Merus Capital had until March 19, 2013 to decide if it wanted to swap its $5,000,000.00 investment for a $5,000,000.00 interest-bearing promissory note.
It obviously elected NOT to do so.
On the day that Air Intelligence Systems reverse-merged into ASYI (March 19, 2010) the opening PPS of the new stock was EIGHTY CENTS PER SHARE.
Three years later (on March 19, 2013) --- when it was time for Merus Capital to decide whether or not it wanted to exercise the liquidation agreement --- ASYI’s PPS had fallen to $0.0001 no-bid.
But MOST importantly, on March 19, 2013:
1. ASYI’s CEO had resigned (18 months earlier); and
2. ASYI had received notice that its software license had been terminated (17 months earlier); and
3. ASYI had sold-off all its non-core assets (16 months earlier); and
4. ASYI terminated all its office leases (16 months earlier); and
5. ASYI terminated all of its employees (16 months earlier); and
6. ASYI fully DIVESTED itself of Airline Intelligence Systems (12 months earlier); and
7. ASYI had become woefully delinquent in its SEC filings (10 months earlier); and
8. ASYI had presumably engaged in an EPIC dilution scam (10 months earlier); and
9. ASYI had forefeited its right to transact business in Deleware (6 months earlier), and in Nevada (1 month earlier).
Despite all of this ROCK-SOLID-BAD-NEWS … Merus Capital STILL elected not to exercise the liquidation clause that would have gotten it a $5,000,000.00 promissory note earning 5% interest per year. Indeed, it has STILL not elected to do so.
WHY?
Because Merus Capital KNOWS something that we don’t know, that’s why! And what it knows is that its $5,000,000.00 investment in ASYI is far, far, far more valuable than that $5 Million promissory note.
And if an “insider” like Merus Capital is smart enough to KNOW that … then why aren’t YOU smart enough to know that as well?
Merus Capital has more raw money, polished talent and industry-wide connections than all of the other two-bit players in this trade put together. Forget about all the tin-horn chumps, shills, and professional deceivers here, like Beatty, Haines, Ari Segal and Andrew Wells. THEY ARE ALL NO THAN “WANNABEES”.
Instead … “follow-the-money”. Because the money is Merus Capital … and Merus Capital is still “in-the-house” … with “skin-in-the-game”. It doesn’t make a dime … unless YOU make a dime. And it doesn’t get free of this stinking trade … unless YOU get free as well.
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“Exchange Right Agreement
The Company and Merus Capital I, L.P. (“Merus”) entered into an exchange right agreement (the “Agreement”), whereby Merus provided funding to the Company in exchange for, amongst other things, a right in liquidation for Merus to exchange common shares held by Merus at the time of the conversion (“Merus Securities”) into an unsecured promissory note with aggregate principle up to $5,000,000 paying interest at a rate of 5.00% per annum. The term of the Agreement is the earlier of: (i) 36 months following a Going Public Transaction (as defined in the Agreement); (ii) Merus receiving the Note after exercising their rights under the Agreement; and (iii) Merus transferring any of the Merus Securities without the prior authorization of the Company. Management has reviewed the terms of the exchange right agreement and has determined that permanent equity classification is appropriate because all conditions under which the exchange right could be enforced are solely within the control of the Company.”
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