Friday, 15 December 2017

Cgon turn £14m profit into £200k loss, 3 years after funding on Crowdcube

Cgon are right up there with Crowdcube when it comes to inventing things. Trouble is, this time it turns out to be their financials.

In 2014 Cgon raised £160k on Crowdcube for their anti pollution vehicle device. We wrote about them here as claims made in the pitch didn't seem to add up. Now they do. We were kindly sent this link by a reader -

It would also appear that Cgon have been smack wristed by the ASA for making what seem to be outlandish claims about their widget. Looks like another case of Crowdcube being taken for the monkeys they are. More nuts guys? -

3 years later, they are still making large losses and have pushed themselves into the red for YE Mar17. No new money has been raised since according to CH. So you can either expect them to appear at a Angels meeting near you soon, or close. They could do both!

Solarmass calls it a day 3 years after Crowdcube funding

And so as the sun goes down on the golden sea, we say goodbye to Solarmass, a company which raised £120k on Crowdcube back in 2014, spent it and collapsed.

This outcome has been on the cards since 2014. Although if you had read the Crowdcube pitch back then you wouldnt have thought so. It looked obvious to us. We have written about them a few times.

It comes by of a voluntary striking off , following a compulsory one for failure to produce accounts for YE Dec16.

It does look as though the solar tiles the company produced were not in great demand or perhaps in any demand. Did they ever exist? 95 investors hung out to dry might wish to ask. And what has happened to the IP?

This is a suitable memorial, care of StartUps -

Wednesday, 13 December 2017

All that Glitters is not Gold as Crowdcube's Jewel Street file more losses

Jewel Street raised £190k on Crowdcube a while back. The projections used to sell this equity, showed them making over £4m net profit for YE March 2017.

It was always quite an ambitious number and you can forgive them for missing by a few million. Actually they made yet another loss  - this time £400k. Accumulated losses of £1.3m leave the predicted cash position for March 2017 of just under £5m, looking a little unreliable. The BS is embarrassed. 

To keep afloat they have raised another £200k, although this hardly seems likely to last for long.

The opening statement of the Cube pitch goes like this - 

The three founders bring together over 75 years of jewellery, marketing and eCommerce technical experience from Saatchi & Saatchi, Disney, UBS and Nomura.

That is convincing stuff but anyone ask what they did at these companies - floor cleaning? They also stated that their 2013 Christmas sales were over 700% up. Did people bother to ask from what base?

Looks a like a new management team was required and is now in place - turn around time. Possibly a little late for the Cubists who will be diluted out of existence even if the company does cash in. All a little sad and not very Christmassy. 

Little Brew - an investor's nightmare

Little Brew's headstone has been waiting for 2 whole years to be inscribed. Yet for some reason the closure notices keep coming and keep being suspended. 

Little Brew raised money on Crowdcube in 2013. It was yet another me too craft brewer taking advantage of the easy money on the platform.

No accounts for the company have been filed after YE Sept14. It has been waiting to close for 2 whole years and whilst it remains technically open, Crowcube investors are unable to claim their loss relief. 

Crowdcube have offered little help - why would they they are not paid by investors. 

Tuesday, 12 December 2017

The rules on SEIS are confusing aren't they?

Zapaygo have an SEIS Advanced Assurance letter from HMRC - its on the Crowdcube pitch. However we are not so sure that the company is eligible for SEIS. 

Advanced assurance is entirely reliant on the information supplied by the company to HMRC. HMRC in turn withhold the right to turnover any allowances under SEIS and EIS when or if the time comes for the company to cash in - retrospectively. So the risk is all put on the shareholders who in light of the failure of the company or its sale, may have to repay the 50% income tax allowance they claimed. If the company makes it, then again it maybe that investors using SEIS will not be eligible to off set the capital gains.

This is a minefield. There is little or no case law relating to ECF investing as HMRC are waiting for a large payout before they pounce and there hasn't been one yet. Experts tell me it's bomb waiting to go off.

In the case of Zapaygo, there is ample evidence to show that the app called Zapaygo was in existence in 2014 or more than 2 years ago. As the owners then are the owners now, albeit using a different legal vehicle, SEIS is denied by the rules clearly set out by HMRC. Or is it?

Well that all hinges on the use of the word 'trading'. Zapaygo claim they were not trading in 2014. This article in the Birmingham Post suggests they were. 

How can a company not trading sign a sponsorship deal with a Championship football club for two years?

One of the founders in the article makes this point - 

"It is currently being used by leisure venues but it is our intention to sign up Birmingham retailers and I expect to have some more on board within the next few days.''

Not trading?

Zapaygo told us originally that -  ''Neither I nor any other company traded an app of any sorts for two years prior to Zapaygo.'' Well that doesnt sit well with the Post article.  

Now (after we showed them the Post article) they say - ''The app was in beta for a few months only and testing in venues, if that is still called trading it was still only a few months.'' Again this is not what the Post article says. But who knows. We have an opinion but it may well be wrong. We are just pointing out some facts that seem to have been left off the Crowdcube campaign.

Of course Crowdcube have no opinion as usual. Helpful bunch. 

Zapaygo promise to tell us their real story - watch this space

Following our piece on Zapaygo's Crowdcube pre launch, the CEO contacted us to say we had got it all wrong. He is about to tell us why. 

So what will be revealed? Well we dont know yet but expect to find out this coming week, as the Crowdcube campaign is publicly launched. 

So keep watching this space. 

Come out you punks wherever you are - Brewdog needs you.

Brewdog launched its own EFP V a while back. The aim was to raise £50m and the initial target was £10m. Things are a little slow.

As ever we prefix this post with the usual stuff about how brilliant Brewdog are and what a massive success their EFP campaigns have been - until now.

We have been following EFP V since 28 October. It started out strongly enough but was soon having days that fell well below the required input level to get to £10m. As of the last two weeks, the campaign has been chugging along at £40-60k per day, when it needs to be at around £100k to cross the line. If the current trend continues it will be a couple of Ms short. 

So if you love Brewdog and that crazy man in the hat - get your wallets out and give him some luv. He launched a new promo for this round a few days back named Equity for Pups - apparently people like to buy their dogs shares in BD. Really?

It seems the problem maybe the low numbers of existing punks returning at the current valuation - something we wrote about a while back. The ROI rubber band has been stretched to breaking point.

Coming as this does on the back of the failure of their US punks campaign, does it signal the emptying of the well? Its a little early to call that one but its now or never for you punks and punkets - only 34 days to go with just under £3.4m left to complete. 

As it is their own campaign, any shortfall will probably be called a massive success anyway. Raising £8m certainly isn't bad but its not quite Carling.