The Dual Trigger

An Open Legal Argument on Corporate Avoidance and Bad Faith

My 300,000 incentive stock options in Clinical AI Solutions, Inc. (CAIS) were not just a performance incentive; they were a contractual share in the company's success, specifically protected by a "Change of Control" acceleration clause. I contend that this clause was triggered not once, but twice, by the actions of Nuance Communications, DeliverHealth, and Microsoft. The following is a formal legal argument, based on documented evidence, outlining how a series of corporate maneuvers deliberately circumvented contractual obligations and avoided compensating me for the value I created.

My Incentive Stock Option Agreement, governed by the CAIS 2019 Long-Term Stock Incentive Plan, contained a standard but critical provision in Section 12.

"In the event of the occurrence of a Change of Control... this Option shall, to the extent not then vested, vest and the vesting of the Option shall be accelerated and the Option shall be fully exercisable immediately prior to the Change of Control."

The agreement defined a "Change of Control" (Sec. 12(a)-(c)) to include:

1. The acquisition of beneficial ownership of more than 50% of the company's stock or voting power by an outside person or entity.
2. A merger, consolidation, or sale of substantially all assets where CAIS shareholders would not own more than 50% of the surviving entity.

This clause is the fundamental protection for an employee against a corporate exit that monetizes the company's value while leaving employee equity behind.

In 2021, Nuance (through its strategic partner, DeliverHealth) effectively acquired CAIS's value without acquiring its stock. This constituted a de facto Change of Control under the "sale of substantially all assets" definition.

The Evidence of a De Facto Acquisition:

1. Transfer of Primary Asset: CAIS's sole significant revenue-generating asset was the "Health Check" program, which I developed. In mid-2021, this program was terminated at CAIS and subsequently replicated and offered by Nuance/DeliverHealth as "Dragon Medical One Essentials Training."
2. Transfer of Clientele: The over 35 clients served by the CAIS Health Check program became direct clients of Nuance/DeliverHealth services.
3. Transfer of Human Capital & Operational Control: The CEO of CAIS, Dr. Reid Conant, was already a Nuance CMIO. In 2021, he accepted a full-time role at Nuance and directed the cessation of all CAIS business operations.
4. Lack of Consideration to CAIS: There was no evidence of an arms-length asset purchase agreement. The value was transferred to CAIS without compensation, directly harming its shareholders (including option holders like me).

Legal Conclusion for Trigger One:

The combination of these actions resulted in a constructive sale of substantially all of CAIS's assets to Nuance/DeliverHealth. CAIS shareholders (myself included) did not receive equity in Nuance/DeliverHealth, nor was there a liquidation event for our CAIS stock. This maneuver was designed to strip the asset value out of CAIS while leaving the corporate shell and its employee equity obligations intact. My 300,000 options should have fully vested and become exercisable in the summer of 2021.

The second, more overt trigger was Microsoft's $19.7 billion acquisition of Nuance.

The Legal Nexus to CAIS:

1. CAIS as a De Facto Subsidiary: By the time of the Microsoft-Nuance announcement (December 2021), CAIS was operationally a captive unit of Nuance. Its key asset, client list, and operational control resided within Nuance's sphere. In substance, if not in strict corporate form, CAIS was a Nuance asset.
2. The Intentional Preservation of the Corporate Shell: Here lies the most damning evidence of bad faith. Dr. Conant told employees that CAIS was "dissolving" in June 2021. However, an official "Statement of Information - No Change" was filed with the State of California on August 16, 2021, affirming CAIS's active status.
   
   • Why keep the shell active? To ensure that during the Microsoft-Nuance due diligence period, CAIS still formally existed. If CAIS had been formally dissolved in August 2021, its assets would have been clearly recognized as part of Nuance. By keeping it active, the parties could maintain the fiction that CAIS was a separate, dying entity, thus avoiding the "Change of Control" trigger for its equity holders.

         3. The Suspicious Timing of Formal Dissolution: CAIS was not officially terminated until    

             March 10, 2022. This date is critically proximate to the close of the Microsoft-Nuance  

             acquisition (March 2022). The corporate shell was dissolved immediately after the 

             mega-acquisition was consummated, ensuring no CAIS "Change of Control" could be tied to 

             the Microsoft transaction.

Legal Conclusion for Trigger Two:

The Microsoft acquisition of Nuance represented a clear "Change of Control" event for Nuance. Given that CAIS's value had already been subsumed by Nuance, this acquisition should have been recognized as a cascading Change of Control for CAIS itself. The deliberate timing of CAIS's dissolution, after the Microsoft deal closed, is prima facie evidence of a scheme to avoid this contractual trigger. My 300,000 options should have vested a second time, immediately before the Microsoft-Nuance close in March 2022.

This is not a case of unfortunate timing. It is a demonstrable pattern:

1. Breach of the Implied Covenant of Good Faith and Fair Dealing: Every contract contains an implied duty not to undermine its purpose. The purpose of my equity grant was to share in the company's success upon an exit. The orchestrated wind-down and asset transfer deliberately sabotaged that purpose.
2. Breach of Fiduciary Duty: Dr. Conant, as CEO of CAIS, had a duty to maximize value for CAIS shareholders. His actions as a Nuance executive in transferring CAIS's value without a fair acquisition directly breached that duty, to my financial detriment.
3. Unjust Enrichment: Nuance (and by extension, Microsoft) was unjustly enriched by receiving the full benefit of the Health Check IP and its revenue stream without bearing the cost of the equity compensation promised to its creator.

Avoiding these two triggers cost me the substantial value of 300,000 shares.

• Valuation at Trigger One (Nuance/DeliverHealth De Facto Acquisition): The fair market value of CAIS stock should be appraised based on the value of the Health Check program ($1M+ annual revenue) and its strategic importance to Nuance.
• Valuation at Trigger Two (Microsoft Acquisition): The value should be based on CAIS's contribution to Nuance's overall value at the time of Microsoft's $19.7B acquisition of Nuance.

The narrative that CAIS "failed" is a facade. It did not fail; it was deliberately and surgically dismantled. Its value was successfully transferred to and multiplied within two of the world's largest tech companies.

This is a direct challenge to the legal and ethical frameworks of corporate governance. When a conflicted executive can orchestrate the transfer of a company's assets to his other employer, time the dissolution of the corporate entity to avoid contractual payouts, and thereby nullify the equity of the employees who built the value, the system has failed.

My legal pursuit is not just about restitution, but about establishing a precedent: corporate formalities cannot be weaponized to commit substantive injustices. The 300,000 shares were earned. They were triggered. They must be honored.

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