Fund on Crowdcube wait six months and then close with massive debts. Walk Away. A Classic from Country Matters

This one is hard to believe. Only months ago, the Directors of Country Matters were on Crowdcube telling everyone what a great investment this was. In January 2019 they went into administration with over £600k of unpaid bills and loans. Crowdcube shareholders are not even mentioned in the Statement of Affairs. 119 of them invested £130,000 in May 2018.

Crowdcube is an FCA regulated platform - just in case you wondered how this sort of thing is allowed.

As the Founders state, Country Matters dealt in Classics. Well this has to go down as one of those.

They have taken HSBC for £250k and Lendingcrowd for another £123,000.

According to the filed report, the company lost a significant customer in 2017 - roughly 25% of their turnover, as Countywide Farmers plc went into Administration.

Now we are just guessing but I'll bet my hat that this wasnt revealed to Crowdcube investors in May of 2018 on the FCA regulated platform. Is it reasonable to assume that at least some of them might have had second thoughts about investing if they had had this information? Given that 25% of the company's revenue had sailed into the sunset. And given that now it is the main reason the Directors are reporting for the business' failure.

It reminds me of a car purchase a friend had some years back. The vendor told him that the engine was new. He bought the car. The engine packed in. He took it back. 'Ooooh said the vendor  - the engine was new - it was new to the car'.

It is odd that in the whole of their report, which goes into some detail on the business in 2017 and 2018, there is no mention at all of the Crowdcube funding round. This is shown at CH as being completed in May of 2018. By November 2018 we are told that the company had some serious cash issues and was heavily overdrawn. So simple Q - where is the bleeding money mate?

As in other cases we are highlighting at the moment, it is almost as if the Administrators  - Begbies Traynor, Birmingham, have ignored this important cash inflow. But that would be negligence so it is unlikely.

Let's hope they had some fun along the way and that someone somewhere will make them pay for it. Many small creditors listed. An absolute shocker.

Chupachipcake hits the skids and all investors are wiped out again. Three cheers for Crowdcube.

You begin to wonder how all of this is going to end. Chupamobile took £740k off 147 Crowdcube investors in 2014. By 2016 it was projecting £1.3m net profits. Nice. 

We had this one banged to rights - our current Buzz Rating on Chupamobile was 15/100 down from 20. Anything under 20 is a goner without Jesus.

We wait to see what collateral damage there is and what state the business has wound up in. I doubt it will be pretty. Tax relief is available as usual. So now Crowdcube have helped waste over £50m since they started in 2011. Knighthoods all round boys. Blasting.

The end is Righteous as founders hand over Dressing of Salads to others.

Righteous raised £215k in two rounds via Crowdcube. Despite several senior level listings, the salad dressers never did manage to make their projections a reality. Then they had an idea - why not create another company making plastic packaged, long life, boil in the bag cauliflower rice and offer shares to existing backers. And so Full Green aka Cauli Rice, was born.

We only tell you this because Righteous has now been given to others. According to the founders there was no financial transaction. 

Whilst gifting shareholders in Righteous free shares in FullGreen, is an honourable gesture, it only really works if FG makes it. Now with over £4m invested, it has a US factory, WW sales and is still losing money. We asked for news but were politely told to bugger off. They dont like us. Troll is a word they use for us. 

Reviews for the plastic sachets of pre made, long life caulirice and a few other recipes, are mixed - that's us being kind. But what do we know about start ups? That's what they told us; as well as to bugger off. 

Time will tell. 

Shareholders we talk to are not impressed by the PR which continues to talk everything up and the facts which continue to show missed projections. 

And do we really need a plastic sachet to create cauliflower rice. Using a fresh cauliflower bought and stored for a week in the fridge, you can make many individual helpings of delicious and nutritional caulirice in a around 1 minute per portion. Have we gone so crazy that we need it in a PLASTIC packet? That is very sad, if true.   

Kokoon - what is the real story here?

Kokoon are currently well on their way to raising more money on Seedrs, they have already used Crowdcube and more importantly Kickstarter. The constant stream of complaints on the KS pitch suggests that things are not quite as the CEO has told investors on Seedrs. 

We all know that complaints on a platform like KS can be exaggerated - people with an axe to grind, people who just like complaining etc etc. However, there will be over 4,700 comments on their still unfulfilled KS campaign page as of this weekend. 99% are not complimentary. 

Customers have been misled is the common theme. Stock that has arrived is on the whole disappointing, refunds are slow or not processed, delivery dates are a joke only surpassed by their communications, mechandise breaks and arrives broken. And the final straw is that the sold software to give users sleep feedback and imporatantly give them help in sleeping, is simply not available yet. 

We have held off writing more on this as they appeared to making some positive progress. But really enough is enough when the CEO states on Seedrs that most of the KS customers have been satisfied and the failure rate is under 3%. You wonder if he has read the comments. They are getting rapidly worse. 

Here are a few examples - from just the past few days

I am again requesting a full refund of my money. I haven’t heard from you. Please respond.

• Yes it is all very disappointing and discouraging to hear about the issues people are having with this Best of all possible worlds, sleep aid headphone.

  It appears to be anything but. Broken parts, Poor sound, non functioning features, and the rest make one feel the wait was not worth it.

  Now 3 years since the original shipping estimate and I, like many of you, are still waiting for delivery.

  I had many chances to get a refund, but decided to wait it out.

  Now, I am not so sure.

Never received any communication about shipping. I confirmed my address in January 2018. I would like a refund as well.

Was so excited to see the headphones had arrived. Lifted them out of the impressive carry case inside the box and ... snap ... plastic bit around the metal post snapped off. Jesus H Christ. Didn't even get to put them on and they are broken. What now?

..................................................

In my experience I have never seen such a shambles pretending to be a business.  

Now we read that Kokoon have stopped issuing refunds - the excuse being that the factory has committed to making the remaining KS stock - which we should point out has not been delivered and there is no date given for its delivery. This is shoddy customer management. It is shoddy everything. In fact is it legal? i was under the impression that a UK product manufacturer selling on line had to offer a 14 day no quibble money back guarantee after they have delivered the goods. Well Kokoon have not even delivered and they are refusing to give backers refunds - 3-4 years after taking their money. 

Hop Stuff over trades and winds up in Court. We told them this would happen.

This is sad. Hop Stuff was a great story and in the hands of a sensible businessman, it could have grown into a success. Driven by a ridiculous plan to take over the brewing world, James Yeomans has single handedly jeopardised his own dream and possibly lost Crowdcube investors over £1m. 

UPDATE - this is a live story and we have just been informed by the lawyers acting for the Petitioners that the petition has been dismissed as the debt has been paid on full. So what was that all about ???

We dont know the full story yet but no one is answering Qs. We do know that a Petition to Wind Up the company was brought by Construction and Shopfitting Limited on 19/02/2019 and as far as we can tell the case has not yet been heard. Their 3 bars are open for business as usual. Bu thten they have been set up as separate legal entities. Where does that leave Crowdcube shareholders?

Accounts have had date changes and are now well overdue. Not long ago Hop Stuff raised over £800k on Crowdcube. Have we been here before??

Clearly for things to have got to this stage, it must be serious. We warned him a while back not to over trade. Now this.........



We hear the shouts of the lite touch, free trade, meat eaters -  'well its a free world and he can do what he likes with his own business'. Not so fast. When he took other peoples cash - in multiple Crowdcube rounds - well over 1000 of them - he gave up that Divine Right. He had duties to his shareholders. One of them was to be sensible.

There have been a few odd things pinging about from Hop Stuff recently. At the start of March, so after the above Petition, James Yeomans emailed investors asking them if they wanted to buy a small placing of A shares. It was promoted as a deal not to be missed. Given what we now know, isn't that a little strange?

Let us hope that this can all be resolved and that Hop Stuff, wings partially clipped can carry on in more considered fashion to grow and prosper. Nout wrong with their Beers.

E-Sign and Blanco Nino back on Crowdcube again with incredible numbers.

This is THE problem. Two old Crowdcube fundees have returned for more cash. But in the pitch there is little mention of the previous raise or even failed attempts. There is no mention or even discussion of the massive gap between their earlier projections and reality. Valuations are upwards only.  

Now we dont wish to comment on the investment opportunities as such. Investors must make up their own minds. 

We would just like to point out that whilst not supplying information does mean that that information cannot be misleading - we assume that's why they have done this - it is not clear, fair or helpful. Investors are your clients too. 

Crowdcube states at the bottom of every pitch that each one has passed its own due diligence tests and is not in any way misleading, unfair or unclear. We would beg to differ.

Why should investors, many of whom maybe new to Crowdcube, not be given what we consider to be essential information - ie what figures did the management of these two companies tell previous investors they expected to hit? Simple and factual; clear, fair and not misleading. It directly effects the current valuation and any calculation punters might make on ROI - given the new set of projections. It talks to the core of the offer - the management's ability to judge its market and extract maximum value from it over a given time. 

So Crowdcube why do you consistently miss off this information? Look, no one expects start ups to hit their projections but there are near misses and out of orbit experiences. Surely it is upto investors to decide which is which. They cannot, if you don't give them the information

We have it on file, so we know the numbers.  

If you join ECF.Buzz you too can have this vital insight into these investment opportunities - take a look..... https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/19804529

Investors - taking back control. 

Crowdcube crashed by Freetraders

Freetrade's record breaking £4m raise on Crowdcube has crashed the site and has been removed. Much to the irritation of wannabe investors and the humiliation of the platform.

Oddly they knew this was going to be a massive rush but their tech doesnt seem able to cope. They are trying again tomorrow.

We are more interested in whether this is a good investment - well by the looks of it far more interested than the investors who piled in and took it up to over £600k in minutes - without reading the offer.

It seems no matter what they do, Crowdcube Carry on Regardless. Wonder who Hattie Jacques would have played? 

Another Crowdcube success story melts away as Fantoo goes into administration

Reasons given for this failure included the fact that the product Fantoo were selling was never completed. Bridging that gap!

Jordan Fantoo, the founder talked a great game. We had this down as a very long shot - we simply didnt believe him. He was how do you say....full of it. Like this from 2014 Start Ups - 

https://startups.co.uk/crowdfunding-success-stories-fantoo/

Despite some interest from Dell in 2016 - possibly exaggerated - new funding could not be found. The admin boys are apparently talking to a buyer. Wonder who?

Total equity invested £2.2m. Angels Den were also involved at some stage. 

Calling on shareholders of Recruitive Software in liquidation.

As all shareholders in Recruitive Software Ltd will know, the company is in liquidation. ECF Solutions is acting on behalf of one the company's shareholders.

As part of our actions acting on behalf of the shareholder, we are currently viewing all the evidence for the collapse of this company, which in May 2018 issued shares via the Crowdcube platform to a value of appox £280k. According to the Crowdcube records this was the 5th round that the company had completed via the platform. Crowdcue is FCA regulated. 

Enquires are based around the fact that the company was forced into liquidation by court order from HMRC, initially actioned in December 2018 (see The Gazette). According to the Statement of Affairs, available to anyone to read at Companies House, the company was in debt to HMRC for £198,000. This was for VAT and PAYE arrears according to the SofA. The complaint to the FOS is based on the claim that evidence for the problems that the company was having with HMRC should have been known to Crowdcube and should have been declared to potential investors. Claims made in the Liquidators report state that the problems with HMRC started at the end of 2017.

You can read about this in The Sunday Times  

Any shareholders who took part in the May 2018 Crowdcube round for this company should get in touch. We can then tell you what to do to make a complaint to the Financial Ombudsman. This complaint is against Crowdcube for promoting the Recruitive pitch without taking enough care over the due diligence. The complaint is already in progress but the more shareholders who join in, the more likely the FOS will be to decide in shareholders' favour.

If there are any other shareholders who would like to join our enquiries then please do get in touch via rob@ecfsolutions.co.uk. This service is free.

Importantly this will be a test case. No action has yet been taken against any of the FCA regulated Equity Crowdfunding platforms by the FOS. We feel that the evidence in this case is strong and it is all documented. 

Has Odyssey Airlines stalled before take off?

For a few years now Odyssey Airlines have been waiting to take off. Planes would help. Now eventually accounts have been filed for YE March18 showing another large loss of £1.14m. Cash in bank stands at £7 - just enough for bottle of water on their inaugural fight - ignoring inflation to 2035.

We have written before about this company - as we joined their investors in the waiting lounge. But this year things have gone from poor to really bad. So fasten your seat belts and adopt the crash position. 

The company is due to repay £2.51m of loans in 7 days time. That £7 clearly wont cut it. The Director says he is confident the loans can be extended and that the required financing - company deficit at £3.79m - will be obtained this year. That is pretty much what they said last year but the investment has been DELAYED. 

We are not sure it's a plane they require - maybe a rocket to take them all to Mars and beyond. Something tells me Chris Failing must be involved.   

You will not be surprised to hear that it was Crowdcube who facilitated this one in 2014 - £1.1m invested. Bet they never thought that 5 years later, they would still be sitting on the runway - without a plane or a seat.  Mind you; they are doing their bit to fight Climate Change. 

Another example of our Insolvency services being not fit for purpose.

BSix Group funded using Angelsden in 2014 - taking around £166,000 off investors. Now it has been liquidated and yet the amount put into the business is declared as just £400 by the Liquidators. 

The final report from the Liquidator, Robert Horton of Auria Recovery LLP, confirms that shareholders only invested £400 in the company. The is contrary to the last filed accounts which clearly show the amount invested at that date as £256,470; with £400 being the nominal value. 

So the shareholders have been rubbed out - declared non existent by the official Liquidator who picks up over £5k for the privilege. 

So as we say, the system is not fit for purpose. This we think must be a common fault. It is essentially saying that investors are worthless once they have invested. And it is, more importantly, hiding the true costs of failure so Directors get away with anything. 

It gets worse. 

You will not be surprised to hear that the Liquidator agreed to sell the company's assets back to the Director of the liquidated company for just £15k. As we have stated before this is a preferred option because it is the easy way out. You might be surprised that this Director failed to pay the instalments (why are there instalments on a debt of just £15k ??) and was in that same year, himself declared bankrupt. The company he set up to purchase the assets was closed in 2017.  So the money was never paid. This does seem to us to be a half backed plan that does not pass any level of scrutiny.  

Back to the shareholding - if the nominal value is in fact the correct figure by law then the law needs changing. If this is a gross error, then can we have the money back please Mr Horton? Otherwise where is the accountability? 

Our Insolvency Laws are not fit for the 21st Century

The golden rule for administrations and liquidations is that the insolvency practitioners must maximise the return from the sale off the failed company's assets, for creditors. In a age when the public have easy access to investments in these companies, this is no longer the right way to do things.

 

There are several ongoing cases live as we write, where the public, who invested via one of the UK's much lauded equity crowdfunding sites, have to watch on as the directors of the failed company buy back the assets of the company for 2p, to then relaunch the brand shorn of its creditors and nowadays its mutilple investors. More often than not the amount the investors have lost is far greater than the amount owed to creditors.

What this situation creates is an easy out for insolvency companies. We now have two live cases where the practioners did not know that there were any investors involved. One had investments in ordinary shares issue via Crowdcube of around £1m over 4 years and the other investments of a similar sum. In the first company the Statement of Affairs which is prepared by the failed company, showed ordinary equity of just £7,000. Even the shareholder we act for had his record of investment declared as the wrong number. The CEO just didnt care. 

The directors of the failed companies misrepresented the facts in Statement of Affairs and the liquidators are not bothered to check this. If it had not been for our involvement, they would have liquidated the companies without realising how much money the founders had lost. That cannot be right. We understand caveat emptor but this is just crazy. 

Insolvency practitioners get paid a fixed sum and do not like to spend time on 'unnecessary' due diligence. There is nothing better for an IP than a pre pack - easy money. They love them and we hate them. One of the ones we are currently involved in, told us that investors were not their concern - well they should be.

Now equity crowdfunding exists and the Government has backed it almost to the point of blindness, surely we need a rethink. If only to try and stop the abuse of the system by greedy individuals who have no regard for the rights of the people who invested, in good faith, in their businesses. And there are plenty of them filling their boots on Crowdcube et al. We have the records and they will be on the new ECf.Buzz site for members to be amazed by.

It is not the first instance where we find the exponential progress in technology leaving behind our arcane legal system. Time to crack this nut.

White Car, Black Car, White Car, Black....No Car as it comes off at the first corner, having taken £822k off Crowdcube investors in 2017.

A failure to persuade anyone else to invest in White Car, is the given reason for this Crowdcube business' failure. Or in plain English it was a clapped out old banger with no engine. 

We dont know the extent of the failure yet, our information came from source. But it does seem remarkable that this company can raise over £800k from more than 500 investors on Crowdcube in 2017 and another £200k in 2018 and then just over a year later it tells those same investors how sorry it is that things have not worked out. There is definitely something missing in this story. 

This is what White Car told Crowdcube investors in 2017 - 

''The Directors believe that no further equity capital is required and that the funds raised here will be adequate to reach exit. The rate of outlet openings can be varied to reflect the resources available'' 

No mention of going bust if you cant raise more cash, as the administration email states. 

For the first year post funding, the company actually lost only £640k against the projected loss of £800k. But they still apparently needed more cash - why? We had it rated above average as a result!

And they have just last month signed away the IP to Hotzone Technologies Ltd. Which is interesting given that they have now gone in administration. They also raised another £200k in equity funding in 2018, depsite what that said on Crowdcube and despite the now obvious failure of the management to operate the lift.

Back at the end of February 18, the company had over £500k in cash and then raised another £200k. So over £700k has gone west in just 12 months. Where was the management? Ah yes - still stuck in that lift. 

A mouthwatering disaster. Just another day for Crowdcube. 

An email from Blanked out for legal reasons Ltd.

We had this email from Blanked Out due to legal action  - in liquidation - this afternoon. 

Rob,

You are right we are issuing a cease and desist against you

If the post is not removed by close tonight we will not only conclude a cease and desist but will seek damages against you personally.

Your post as usual is inaccurate on many counts, your personal attacks and previous emails to me are absolutely disgusting and I have retained them all on file. These will also be passed over to our solicitors.

The legal remedies that are open to a businesses in our position are there for a reason, we are acting within the law. You might not like us or Crowdcube, but you cannot continue to constantly write posts of an inaccurate nature like this.

Confirm the posts removal

Blanked out due to legal action
........................................................................

We are acting on behalf on one of  Blanks shareholders - at their request. Shareholders have lost a considerable amount of money. Those are irrefutable facts according to the filings at Companies House.

The SofA for this company show that it has estimated debts of over £2m. Assets are said to be worth around £8,500 from a book value of over £500k. These are all verifiable facts in the public domain.

There is an outstanding loan with Thincats estimated at £128k.

Trade creditors stand at an estimated £130k.
HMRC is owed an estimated £190k.

Total estimated deficiency for this company is £2,370,000.

We also received an email from the CEO of Blank very recently which stated that the shareholder we are acting for had only invested £20 - ie so bloddy what sort of thing. Well it turns out the investor had actually put over £4k into this company - the large proportion of it quite recently. They are taking the issue up with FOS. That is a straight forward lie and shows scant regard for the people who gave their money to this guy to help his business - on Crowdcube.

All of the above are 100% accurate verifiable facts in the public domain. As produced by CH or our records.

We leave shareholders to judge where the blame lies. We know what we know.

The Director of this now failed company has issued a threat to go to these on line lawyers - Cohen Davis https://www.internetlawcentre.co.uk/ . Has anyone ever come across them? In our experience much smoke means little fire and we are happy that everything we published on this company was accurate - events have proved that. We have however taken down and hold in reserve posts with their name on. It smacks to us of something not quite right when threats are made which can only be countered by law incurring considerable costs.

This company, which is in liquidation not administration, is still out there on Twitter and on its own website punting for business. Is that legal?

Passingboxes was supposed to make death easier. Its own maybe???

Passingboxes or Lifearama Ltd used Crowdcube to raise £186k in 2017. Its stated aim was to become THE website for death. Now the website itself is dead. The company seems to be alive in a zombie kind of way. 

It looks like more of the same from Crowdcube. Donna Mclean set up Passingboxes, so she tells us in her video here. She has a team which we are told is highly experienced. We couldn't find it. Must be well hidden.

Her video is based on the anticipated experience of her father's death - the inspiration for the business. But then her father didnt die yet. 

Take it as you will, it is hard for a company to be THE website for death without a website. I am reminded of the death by tray skit.............. 

There is a certain doubt in the CH filings, which are a complete riot, about whether they raised any money on CC  - certainly not from many investors, if they did. It is reported as being completed on numerous sites but isnt on CC any longer. So maybe it was pulled post pitch. Who knows - it was allowed on there in the first instance which should raise some eyebrows. But it wont. We also wonder if this £186k is included in Crowdcube's PR numbers??

15/4/19 - We can now confirm that this raise, although completed, was not finally signed off. Phew. Thank you to our source. 

Labrador used Crowdcube to raise £890k in 2018 and closes in 2019. Kennomeat!

Extraordinary. Only a few months ago Labrador were issuing new shares and taking on new directors. On 25 March 2019, they applied to go into administration.

This company has now been bought out of administration by another Crowdcube Alumni Verv, aka Green Running Ltd. Bets anyone? 

So what went so very wrong? Crowdcube sold their shares at a valuation of £5m. The suggested exit in 2022 was with a 10X uplift for lucky investors. 

Well we cant know that for sure at the moment. Clearly their well laid out plans and their team of experts were all Kennomeat. How can you expect a dog to thrive on that? It looks to us like it may well be the case that the Labs package as sold to Crowdcube investors was not what it was. Reviews are poor to awful. We dont remember the pitch being about a software package as yet undeveloped - at £5m. Seems unlikely. Shareholders should be asking for the dogs bollocks. 

Projections used, to what now looks like 'con' investors our of £890k, showed plenty of cash in the bank at the end of 2018. We assume these were wrong. Does that ring any bells? As we keep on saying, the reason projections are important is because they are supposed to stop this happening. On Crowdcube they are merely equity sales tools. 

The market ready easy to switch app which allowed consumers to change power supplies has clearly either not been market ready as claimed or has failed to impress. The company was due to be doing £4m in revenue in 2019 on a 82% gross margin. Figures for the following year showed doubled revenues and £1.4m NP. More Kennomeat. 

We await the initial report but we can guess what it will say. Have you ever tried Kennomeat - it sucks. 

Big Hole and Tight Corner as H&C liquidates leaving debts.

Hole and Corner used Crowdcube to raise £209k from just over 200 investors in 2015. Now the would be highbrow magazine has gone into liquidation with estimated debts of £350k. 

Not much to be said really. This was either a good idea poorly executed or a poor idea. It is a shame that trade debtors have been left hung out to dry. 

Their plan included increasing readership and advertising - both of which seem to have failed. 

HMRC took a hit for £171,993. 

One day we will come up with a system that works. 

Vivobarefoot puts Spring into investors steps

So it is possible. Companies can raise money via Equity Crowdfunding and deliver what their projections show. Hats off to Vivobarefoot whose funky shoeless shoes have attracted a loyal following, increasing sales and profits. 

All the bullshit we keep getting about how you cant expect startups to get close to their projections is now shown to be just that. Although granted this company is not exactly a new start. 

Vivo raised £1.3m on Crowdcube (yes) in 2015. Heavy losses have now been replaced , as projected, with a £650k profit for YE June 18 on rising sales of over £19m. This is all ahead of its projections.

The success is based on a product that converts users almost instantly. I have not tried them but played golf a year or two ago with a couple whose admiration for each other was only surpassed by their admiration for their Vivo footware. And clearly the company is being run well - you cant make north of £600k profit otherwise. 

So there you have it - real proof not PRing, that Equity Crowdfunding can work for business and investors. No ROI yet but ...................................... 

Worryingly, there is no mention of any this on Crowdcube!