As an investor in Newchip Accelerator via parent company ASTRALABS, I wanted to share a few thoughts on the ongoing bankruptcy proceedings, and the founder/CEO.
Andrew Ryan, formerly Ryan Rafols, totally failed ASTRALABS shareholders over through mismanagement.
He drove Astralabs into bankruptcy, conned small time investors, and every shareholder should be angry at him.
The latest financials filed show an astounding inability to manage risk — holding on to a huge warrant portfolio while scrambling to gin up cash in short-sighted,desperate ways. Selling future revenues, banking on being able to fundraise endlessly. He was fundraising from small investors on Wefunder days out from filing a bankruptcy petition. An equity raise which would not necessarily be paid back from sale of assets.
In several of the updates he sent out, he. admitted to poor hiring — he then compounded his mistakes by trying to go on a hiring spree as the company was running out of cash.
Then, after filing a hasty bankruptcy petition, he directly lied to the court, attempting to hide assets. He destroyed hundreds of millions in shareholder value through his totally inept management.
Below is an excerpt from my opinion filed in the bankruptcy case:
“In a series of emails from January 26,2023 to April 27, 2023, the leadership team at Astralabs materially mislead investors regarding the financial health of the company. On January 26, Mr. Ryan emailed existing investors to gauge interest in participating in a Revenue Share Note (up to $1m). In a follow-up email sent Feb. 28th, Mr. Patel indicated that that offering would instead be equity, offered at the same terms as the last funding round. By the closing of the investment on March 13, investors had bought the full allocation of $1 million in additional shares. I, and many others, were blindsided when we received an email on March 17, stating that Astralabs had started bankruptcy proceedings.
As the petition was converted to Chapter 7, Mr. Ryan sent out a series of emails blaming “rouge employees”, and his finance VP. The court documents show the real reason was the wildly inaccurate financial disclosure package filed by Mr. Ryan, excluding the bulk of his firms assets. He again lied to investors to plead for contributions to a legal fund, as he was “broke”. One might wonder Mr. Ryan had intentionally filed a Chapter 5 petition that he knew would be converted into Chapter 7. After lying to investors to solicit money up until four days prior to the bankruptcy petition, he then sought to exclude the Warrant Portfolio (valued at $489 million) held by Astralabs from being part of the liquidation discussion.
This would, of course, leave unsecured claimants — those who had wired money four days prior to the petition — empty handed, and Mr. Ryan, tha majority shareholder, with a warrant portfolio he had valued at $489 million.”
In addition, several employee accounts, detailed in a Daily Beast piece, and an excellent whistleblower piece published on Medium, reveal him to be an angry man, incapable of controlling his emotions. He cultivated an environment of fear, bullying, and sexual harassment.
In summary, I think it is clear Mr. Ryan, and possibly other executives viololated securities law. Additionally, there is a growing body of evidence that suggests Mr. Ryan is at the very least culpable for sexual harassment, if not guilty of sexual assault.
A shareholder lawsuit against Andrew Ryan and other executives at ASTRALABS would be well founded and warranted.