Berrywhite liquidated. Not a pretty sight for 172 Crowdcube investors.

Well it has been coming. A failed second or maybe third attempt to raise more cash on Crowdcube has resulted in Berrywhite being turned into mush. They took £291k off 172 punters on Crowdcube in 2014.

As is now a common, we had warned investors on this one. Here.

The liquidation is in progress (may take a while) but from the initial report the company has left around £54k of trade creditors dead in the water. The S of A gives no value to Crowdcube investors and Crowdcube have made no mention of the liquidation on their Berrywhite page. Both have become standard ways of limiting the damaging PR. 

We report the facts. You decide what to do with them. Never Never goin'to give you up!

Crowdcube's Berrywhite finally calls it a day - or has it??

As we reported before, Berrywhite just refuses to lie down. In liquidation, the directors have now invented the Berrywhite Group and have arranged a share swop from one to the other. 

All the usual excuses are trotted out for the failure of Berryone. How many businesses were put to the sword by the 17.4 million in 2016 is yet to be revealed but it is excuse number one for the moment. Andrew Jennings, the founder, is funding the newco with a £7k loan to buy the assets of Berryone off the liquidator. £7k ?????

There are a number of posts on them here

We really didnt like these guys - they tried tricks to get investment. That's fine in a circus but it shouldnt be allowed in business finance. 

Anyway Crowdcube SHs, have a year to wait and see if Berrytwo can make a few bucks and give it back to them. I wouldnt hold your breath. 

Cant get enough of you - well some of us can, Barry. 

Berrywhite reappear on Seedrs having been delisted on Crowdcube - Are you going to love them just a little bit more?

Berrywhite's downround saga keeps on rolling...just keeps on rolling....rolling to the river.

We highlighted BW's odd and possibly illegal tactics on Crowdcube in Round 2 - here. In an attempt to get over the line, the founder had offered to sell investors his own shares at a discount - but only investors who came in at the end of the campaign ie a late incentive to drive over the line (maybe a clue there for Eddie). Thereby crashing the one sacrosanct rule of ECf  - all shares offered must be offered pari passu. As a result Crowdcube closed their campaign down, even though they were close to completing. 

Now we understand the company is on Seedrs and providing they reach their new target £50k at the lower valuation of £900k, before going public, they will be allowed to use this platform. Presumably BW hopes you will love them just a little bit more and £50k will over fund to £150k. It is very messy and really not what we want to see from platforms - even if they have so much to give.  

BW funded in their first round on Crowdcube at a valuation of £5m. The failed Crowdcube second round started at £2.7m and ended (just as it was pulled) with attempts to lower this to £900k. Desperate times. 

Anyone reading this blog, knows we have a thing about these crazy 'valuations' and how they have driven companies to make up ludicrous projections to justify them.  These crazy valuations then push the company to over trade and bang, it's curtains. You need look no further for an example of this than BW. It should have gone from £900k to £5m - not backwards. Investors on Crowdcube are not bright enough to get this  - yet. Although they must be catching on by now?

By way of a factual illustration in this case, for YE December 2016 BW, who was never never gonna give you up, projected profits of £1.6m. Accounts filed show losses of £275k. We would expect that a company with this history of dubious projections, might want to reassure investors now, by publishing YE December 2017 accounts - but they havent. 

One might feel a little sympathy for the founder if he hadnt been such a greedy so and so in the first place. Anyone looking to invest now, would do well to go over the numbers with a microscope and then half all the revenues and double the costs.  BW, what am I going to do with you?

Berrywhite disappears from the Crowdcube platform after offering free shares to get over the line

Berrywhite offered new Crowdcube investors free shares at the weekend. Monday has seen the pitch removed.

The CEO had struggled for a long time to raise more cash - he had already taken the valuation down and extended the campaign. Two days ago he posted a free share offer to the next investors  - in order to push him over the line.

We didnt think Crowdcube would like this and investors threatened to pull out over it. See the last but one post for more details.

Why he bothered is a bit of mystery as Crowdcube's back catalogue is littered with pitches that never crossed the line but were funded. He needed advice, clearly.

For Crowdcube's commission I'm pretty sure Berrywhite will be funded.

Berrywhite are making a mockery of the FCA

Berrywhite have been trying to raise £150k on Crowdcube for ages. Now looks they will succeed thanks to some highly dubious marketing on Crowdcube's platform.

Berrywhite were never going to make it. they have rasied money before and delivered nothing close to what they have promised - this blog is full of them. They have extended the campaign at least once and reduced their valuation but it was stuck. Until they came up with this - posted yesterday

Bonus shares for the next five investors who invest £5K or more

awmjennings 1 day ago

7 Replies

So far we have raised £126,140, so we are still short of our target by £23,860 and our deadline is midnight tonight.

So the next five people to invest £5K or more up to a combined total of £25K, I will double your shareholding by gifting you some of my personal shares.

Please note that the shares that I gift you if you invest will not be EIS shares.

Andrew Jennings
Managing Director
Berrywhite Limited

Some of the responses - 

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

Mr_Bean 1 day ago 

Andrew

You should have listen to investors feedback weeks ago on having a justifyable valuation to avoid this last minute incentives.

Best wishes

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awmjennings 1 day ago 

Dear Mr Bean, We listened to you actually and we did reduce the valuation:

New update from Berrywhite Natural Drinks raising investment on Crowdcube. Capital at Risk.https://www.crowdcube.com/companies/berrywhite-limited-1/pitches/qBygYb/updates/Z54QOl

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cube_charles_murphy 18 hours ago 

Is this allowed and is it legally binding?

This essentially creates a two-tier pitch. Those paying more are buying at half price. I never saw this on crowdcube before.

Finally, what about investors who already invested over 5K before this point. It would be unfair not to give them the same deal as this would be the same as changing the valuation of a pitch halfway through but only applying it to new investors.

I think we need a crowdcube ruling on this offer.

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Mr_Bean 18 hours ago 

Moreover I am none the wiser as to why and on what basis second extension was granted.

I have cancelled my token investment.

Best wishes and good luck.

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awmjennings 18 hours ago 

Dear Charles,

Thank you for your comments. We will contact Crowdcube on Monday and raise your concerns.

Best regards,

Andrew

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stellar 2 hours ago 

I will pull my investment if its not confirmed that all investor in the same round are "pari passu".

I agree with comments above the right valuation from the start would have gone a long way to getting this round funded quickly. Focus on revenue growth and EBTIDA ... valuation will follow along.

Best
S

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14pms02 33 minutes ago 

Same thought as cube_charles_murphy
Are there any learned friends, with expert knowledge, who are able to comment ?
Similarly I trust the CrowdCube compliance people had a say BEFORE the bonus offer was put onto the site and formally concurred it.
Crowdcube Capital Ltd is, as it says on the website footer, authorised and regulated by the FCA.

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

So it seems that despite the total having shot up to 92%(from 80%), people are not happy. Do Crowdcube really think this is a sensible way to carry an FCA regulated trade? Surely not - even they must see this for what it is. 

Monday will tell....................

Berrywhite launch downround on Crowdcube

Berrywhite took £293k off Crowdcube investors in 2014 at a value of £5m. Now they are back again for another £150k at a pre money value of £2.7m. 

Well at least that bit is open and honest. Oh wait, no it's not, we had to dig around to find that they had previously been on Crowdcube and at that value - its not mentioned in the pitch. Whats makes it worth £2.7m is highly questionable - it certainly is not the managements skills at sales projections!

So what else is not mentioned?

All the usual really - previous projections had the company making net profits of £1.675m for YE Dec16. They actually filed a loss of £220k. And so it goes on. Despite what they say in the current pitch, we hazard a guess that the 2016/17 turnover was around £600k when it was projected to be over £7m. So why would anyone believe anything they say?

Nothing really wrong with the product or the team. It's just that despite all the hype the former doesnt really sell very well. It would help if one could rely on the information they give out or have any confidence that Crowdcube bother to check it.

And do they think the 6p Sugar Tax is going to make that much difference? We dont.