Ethos Global in Liquidation and newco Soma London England in deficit - what is going on here?

Ethos Global, which took £709k off Crowdcube investors and is now in Liquidation, has seen no filings posted at Companies House for almost 12 months. In fact the Liquidation, instructed by court order in July 2017, has never filed a single document referring to the company and its financial status.

We have written about them many times here and this includes an email for Dr Theo laying out how new fully paid up shares will be issued by the end of August 2018 and how investment is flowing into the newco. Neither event has been filed at Companies House. 

As you may know, we have been in touch with the good Doctor Theo to try to help shareholders find out what is happening. He has repeatedly promised to provide an explanation but never has - it is always manana. His newco, set up just before Ethos was forced into Liquidation by Court Order in July 2017, has now filed accounts for its first 13 months to February 2018. Soma London England is using the premises of the old Ethos Global in London. This is before the Liquidation of Ethos has been processed. 

Soma revenues were just over £500k but it filed a loss of £130k and is £70k in deficit as of that date. Despite numerous written promises that shareholders in Ethos would receive free shares in Soma  - this has never happened.

The Soma accounts are micro and make no mention of why they consider themselves able to carry on as a going concern. There is no breakdown of the current creditors totalling £148k as against the current assets of just £24k - it may well be that Dr Theo is the main creditor.  The company filings show only one issued share, owned by the good Doctor. Although this filing is now almost 12 months old, no new shares appear to have been issued.

If you wanted to create a scenario where it showed how easy it is to take the piss out of the UK accounting system and HMRC, then this would be it. It may be that no laws have been broken - but it certainly doesnt make sense. 

Crowdcube's Ethos Global fiasco runs and runs

Ethos Global, run by Dr Theo Koutrakides and his wife, Jennifer Hersch, was put into liquidation by court order in July 2017. It had raised over £700k on Crowdcube just a year before. That liquidation has gone nowhere since. Before the liquidation, the good Doctor and his wife had set up Soma London England, which operates from a unit paid for in large part by Crowdcube investors. It has just filed accounts showing large losses and its BS in very negative territory. How is that even possible?

We have been talking to the good doctor - or rather we have been asking Qs and he has been avoiding them. And we have written about them here. He had promised to gift all Crowdcube investors in Ethos equal value shares in his new Soma but he hasn't done that. One thing is consistent  - he rarely does what he says he will. We have also been trying to help some investors find out what is going on. I have to say we have not had much luck - Crowdcube have done their usual 'it's nothing to do with us'.

This is an email we had today from Dr Theo in response to our chasing him - 

Hi Rob,

Thank you. It has been a hard last few months that has now produced results that new shareholders will be happy to hear. After meeting a number of deadlines incl. filing annual accounts, I am now returning back to writing and completing my response as I will also notify shareholders of some good news.

I need to also await responses from Crowdcube, our tax advisors and solicitors to validate the information in my response before this can be published. I would like to promise a specific date, although this is dependent on receiving the necessary confirmations, which should be this side of the year. Our past investors will all have their shares.

Theo

He has previously made several promises to give me his written explanation and his deadline for this was the 10 December 2018. This email says nothing and is full of confused, irrelevant statements. Nothing new there. 

Ethos made certain promises and declarations in its Crowdcube pitch which were not quite right. The company closed its only unit in Cambridge shortly after raising on CC, where it had stated the unit was a cash cow.  Turned out the Landlords, who forced the company into liquidation, hadn't seen things the same way. It seems unlikely that the major dispute between the company and its landlords was not in process before the CC raise. The CC pitch made not mention of it. CC apparently did not pick this up in their due diligence. 

For some unknown reason the liquidator, Adam Harris of Mazars LLP, has not filed a single thing since they started  - which is odd. He has refused to answer phone my calls. Meanwhile, the good doctor and his wife continue to use the assets paid for by the money pumped in Ethos by CC investors, in their new unit in London. This is apparently owned by Soma, although we imagine the law may have something to say about that.

Soma London England was called Ethos London, when the good doctor incorporated it in February 2017, before Ethos was forced into liquidation. He is the sole shareholder and the company has no investment filed at CH. The Crowdcube pitch was full of the new London unit and its fitting out works started before Ethos ceased to trade. Dr Theo continues to gather more debts as he 'trades'.

The only problem here is a simple one. Crowdcube allowed Dr Theo to take over £700k off investors in 2016 on the basis of false information. These investors are still no clearer now as to what has happened. Both Ethos and Soma studios had and have a decent revenue stream. The London unit turned over £500k in its first 13 months to March 2108; albeit making a large loss in the process. The Cambridge unit was popular. But the way the business is run is an issue. Laws are in place to prevent this sort  thing. The picture is fairly complete and its image is clear to us. When will something be done about it?

Ethos Global and Crowdcube sent this to shareholders - can you understand any of it?

Ethos Global is in Liquidation and there have been issues with setting up of a newco by the founders. In August this year, Dr Theo Koutroukides sent the email below to Crowdcube, who then forwarded it their clients  - the shareholders in Ethos Global - without apparently reading it. 

It is complete nonsense and for an FCA regulated company like Crowdcube to be passing this off as acceptable advice to THEIR clients asks a lot of serious questions. None of which will be answered as usual. Let us know if you can understand what he talking about. 

FYI no new shares have ever been issued by Soma London England, a company solely owned by the two founders of Ethos Global. No shares in SLE have been gifted to Ethos Global SHs as we write. SLE now operates a gym in London which was initially paid for by Ethos Global and therefore by its shareholders' £800k investment. Very little communication has been forthcoming about any of this until we started to dig.

It seems to us highly irregular to suggest to SHs in Ethos Global, that they can claim loss relief in a company, when they are being offered shares FOC in another company in lieu of their Ethos shares. Isnt that illegal? The same must go for the offer of exchanging Ethos shares for value in the newco by way of discounts in the gym. Otherwise HMRC are paying for your yoga lessons! For this suggestion to be sanctioned by Crowdcube is quite astonishing. Although from past experience, this will be down to ignorance rather than anything more sinister.

It is also worth noting that no progress has been made with the liquidation of Ethos Global since it started over a year ago. In the Crowdcube pitch, the soon to be launched London studio was a key driver in the sales pitch. 

Hello Crowdcube, Please see the below email for your attention from Dr Theo Koutroukides, of SOMA House.

Dear investor, You are receiving this communication because you chose to receive shares in Soma London England Ltd. We are now in position to issue the shares to you following restructuring of the company under a new lease, assets, fitouts and successful implementation of the new business plan towards our most successful last month, summer and quarter historically. Thanks for the continuous advice and support from so many of you in all the necessary steps we had to take prior to issuing the shares to ensure validity of (1) your initial 30% EIS; (2) in addition to 45% loss relief upon company liquidation in process, and; (3) new shares in the new company. For example, a £10k investment under normal circumstances would receive back a total of £6,150 plus a discretionary issue of the previous number of shares in the new company; that would be the original number equivalent to £10k investment out of the original total pool of shares plus new ones to include subsequent investments, options and our third, non-salaried Director. These are fully paid-up, ordinary shares with pre-emption and full voting rights. Non-voting B shares have been upgraded to full-voting A shares. The shares will be issued in 14 days, shortly after midnight of Sunday, 26th August, when the current investment round closes at the pre-money valuation of £1,629,653 with a minimum investment of £10k. We are currently exceeding the £200k mark including contributions from all three company directors. By completing the current bridge round to consolidate our London base and model, we are looking to open right after a larger round from next month towards expansion. The current round gives us the flexibility in time and operation to be in a strong position while we are negotiating bigger deals on the table. Please note the above information is presented to you as a direct contact and past peer to become a future shareholder in the new company and is by no means an investment promotion or advert. It is merely intended to honour the principle that shareholders would normally have pre-emption rights by receiving investment information in advance. Please contact me directly if you need more details. Some of you requested whether you could exchange the value of the shares with services at SOMA House. For investments up to £750, we can offer 3x the value of the initial investment in services at SOMA London. For example, instead of £100 equivalent of shares you may benefit from £300 of services that are also transferable to your friends and family. If interested, please contact me by 26th August. You may see our most recent news at www.soma.house and Instagram. Trends are positive and the team is performing remarkably well as we continue to develop new and exciting revenue streams with higher profit margins, further differentiating ourselves from the noise. To reiterate, the offer is made voluntarily by the Directors of the new company without any payment required by you and at the cost of the new company. No response is required from you to have your shareholding issued and maintain your 30% and 45% EIS benefits. Thank you again for being part of a long journey and we look forward to welcoming you officially to SOMA House as new shareholders. Kind regards, Dr. Theo Koutroukides Director of SOMA House T: +44 (0) 759 323 4666 E: ceo@soma.house SOMA HOUSE OLD SPITALFIELDS MARKET 8 HORNER SQUARE LONDON E1 6EW Further to this email, Crowdcube will be in touch after shares have been issued by SOMA House in late August. As a reminder, any shares issued in connection with the above email will be held by the Crowdcube Nominee on your behalf and in accordance with our standard Declaration of Trust. If you have any questions regarding the Nominee, please contact support@crowdcube.com. Kind regards, Crowdcube

What has happened at Crowdcube's Ethos Global? We spoke to the good Doctor.

Dr Theo Koutrakides and his wife Jennifer Hersche set up a yoga studio in Cambridge. It took £800k off Crowdcube investors and was then put into liquidation by court order. At the same time the two directors opened up another yoga studio in London as Soma London England Ltd. 

We have written quite a bit about about this - here

The company was put into liquidation over 15 months ago, yet there is no further action filed at CH. What the liquidators are doing, apart from nothing, isnt clear. Meanwhile the two directors continue to trade in London from a venue originally paid for by Ethos Global and sold to Crowdcube investors as THE new opening.

We wrote to the good doctor as we had been approached by several shareholders. Eventually we got a response recently. He rang me from an airport.

The last comms that SHs had received from the good doctor, was a statement that all Crowdcube Ethos Global SHs would receive shares in the newco. That was 5 months ago and nothing has happened.

It is impossible at this stage to know exactly what is going on here. In a 20 minute phone call all the good doctor would tell me was that he was sorting things out - what they were was not explained. When asked simple direct questions, he was totally evasive. Then he had to board. Bye Bye.

We are none the wiser.

But he has promised to tell me the full story when he returns in a week or so. We will hold him to that. It should make for interesting reading either way. 

2nd July marks a whole year since Ethos Global was forced into liquidation. Yet the liquidators have produced nothing. What is going on?

For our system to work, people who abuse it need to be made to pay. Ethos Global took £709k from 388 Crowdcube investors in  2016. Then they went into liquidation, having opened up a London studio with these funds, which they transferred to their newco. Leaving investors and creditors out of pocket.

Under what system would that be legal?

So why has it taken a whole year to get nowhere?

We have contacted the liquidators many times on behalf of shareholders who asked us to help but they never respond. FYI Adam Harris of Mazars is a complete waste of space.

It cannot be that complicated  - it was not a large turnover business. There are no offshore accounts - there are barely any accounts. The trail from their Cambridge studio, to the new London one, is very clear and obvious. 

Wake the F up will you Mazars. 

Collapsed Ethos Global pair open new businesses by the month

Ethos Global was forced into liquidation 10 months ago. The founders have since moved into the venue fitted out by Ethos Global in London and started a new business, SOMA. 

We have written many times about this outfit. Crowdcube investors put in around £800k in 2016. Then almost immediately the company 'closed' its only studio in Cambridge, moving to the London site and spending most of the cash there. The Cambridge landlords then had Ethos closed. All quite straightforward.

Well it should have been. But the local liquidators couldnt handle the situation and in February of this year they gave up and handed the case to a London firm, Mazars LLP. So essentially since July 2017 nothing has been accomplished.

Meanwhile, the two founders have been very busy. Not only have they used the assets of the old co to set up their expensive new studio in Spitalfields, but they have launched a plethora of newcos. The old Co is not yet buried and serious questions over their conduct have to be answered.

The two founders did make an offer of free shares in Soma but we have it from investors that this hasnt been followed up.  

Soma has now grown wings. The two founders have a Soma Holding Ltd which in turn has a share on Soma Retail Ltd and  Soma Education Ltd and Soma London England Ltd. The two of them also have Minerva Method and the good Dr has also opened Singularity Healthtech Ltd. All of these newcos were established on the same day in February 2018. Something is brewing and it smells. 

Here is the Q. If we are right that these two directors have behaved in such a way over Ethos Global that their ability to be directors in the UK might be called into question, then none of this activity will stand. So why has it taken so long to make any progress on the liquidation. In the last conversation we had with the Cambridge liquidators, we were told they were waiting for the directors to come for another interview to explain things.

You might ask what Crowdcube, who allowed these two to take £800k off their 'members' have done about any of this. The answer is nothing, as it always is with Luke and Darren. Sweet as pie when they are about to get your money and their commission; shadows when the yoga goes pear shaped. 

Crowdcube versus Seedrs - who would you want in your corner when it all goes tits up?

A direct comparison is possible between the way Crowdcube deal with shareholders in a failed company and with how Seedrs deal with them.

You may remember the debacle that was Ethos Global - they ripped £800k off Crowdcube investors and then allowed the company to be put into liquidation whilst taking that money and spending it on assets for their new venture Soma London England. The Insolvency guys are still trying to find out what happened almost a year later. Help for CC investors from CC; absolutely none. We have copies of CC emails from the CC 'team' telling investors that really they should talk to the founders of Ethos - there is nothing Crowdcube can do. That's it. We emailed them on behalf of some investors who asked for help and got no response at all.

Crowdcube have a reputation for this shabby behaviour - we have highlighted many instances on here.

So compare this to the developments with Nick Hatter's Giftgaming - which funded via Seedrs. Nick has been a bit of a naughty boy - according to Seedrs. Ignoring the ins and outs of what went on with his now defunct company, Seedrs have pressured him to give up his 78% share of the proceeds of the liquidation, in order to give these to the Seedrs investors. They have spent a considerable amount of time and effort to reach this outcome and have sent investors a lengthy email to explain the current situation. It is still a loss for investors, but it shows that at least Seedrs care for their clients - the investors who make Seedrs tick.

UPDATE March 2019

It seems that someone has been leading someone a merry chase around the bushes. The company is now finally closing with little or no money for shareholders.

Crowdcube on the other hand couldnt give a tit, let alone three.

Is Ethos Global Crowdcube's worst comedy ever?

Ethos Global raised £709k on Crowdcube in 2016. In 2017 having failed to file any new accounts, it was forced into liquidation by creditors. Now new evidence we have seen suggests that this isnt simply a business failure but something far more serious.

We knew this one would end in tears as soon as we read the Crowdcube campaign's opening line

- ETHOS is a chain of boutique Yoga & Fitness hybrid studios with headquarters in Cambridge..........

How can a one unit operation be a chain? We tried to give them the benefit of the doubt - after all landlords can be very unhelpful. But this evidence makes it pretty clear what has happened.

The case in to the liquidation is on going and nothing has been filed yet by CH post the Court's liquidation notice. But we have been in touch with shareholders.

We have written about Ethos many times, here but this evidence is new. A timeline from the point of the Crowdcube campaign shows that some people must have known about the problems the company had before they raised the £709k. And that these facts were not shared, even though they were materially important. They also reveal that Crowdcube have been involved in trying to persuade shareholders to take shares in newco Soma - even though it seems likely to us that Soma doesnt own the assets in the business it is running. These were paid for by Ethos Gobal and its shareholders and they have O/S liabilities. 

The most dramatic revelation is that Ethos Global sent an email to shareholders, requesting more funding, in which they blatantly used information about the company's situation that was false. And they did raise money according to filings at CH.

Lets look at the timeline - 

January 2016 Crowdcube campaign for £500k completes at a total of £709k. This campaign was centred on the success of the Cambridge studio, its future and the future growth on the London Spitalfields' site, which was already under construction. No mention was made of any problems with the Cambridge landlord. Shares were issued under a Crowdcube Nominee account.

June/July 2016 London Ethos Opens - we dont have a date but an article in The Standard in July and Ethos's own revenue figures show it must have been open at the start of July 2016. So this studio in Spitalfields was opened by Ethos Global not Ethos London England or SOMA London England.

September 2016 Ethos Accounts YE Dec2105 become over due - remember these accounts are in fact for an historical period with regard to the Crowdcube pitch - ie Crowdcube DD needed to be on this.

November 2016 Ethos Global email. This email is asking shareholders for more money. It is very upbeat about the company. It does not mention the fact that the 2015 accounts have not been filed. These accounts would have revealed the gap between the Crowdcube projections for 2015 and reality. It mentions that a VC has looked over the company's DD and has approved it and is on the cusp of investing. Remember no accounts filed! It gives the following figures for real turnover - for 2016 -

Feb - £3k
Mar - £7k
Apr - £9k
May- £10k
June- £11k
July - £16k
Aug - £21k
Sept - £36k
Oct -  £52k
(NB - these sales include over half from the use of Classpass. They charge a high comm rate and no longer deal with SOMA) 

In the Crowdcube pitch the figures for 2015 showed a gross revenue of over £550k for this period and these figures were historic - Crowdcube raise completed January 2016. You can see how wrong this was. That is if you can believe these figures produced by the company. Did CC bother to check anything? It seems very unlikely that the problems that caused the Petition to be filed in February 2017 or 3 months later, were not known to the Ethos management when this email was sent.

This email goes on to say -

·  Cambridge operations are being concluded efficiently by our management team demonstrating excellent customer care skills, while legal matters are progressing fast with our solicitors. Timing of Cambridge closure was beyond our control; however, all other developments indicate that exit from Cambridge is accelerating the short-term profitability of the London studio heading towards the January period, as well as the long-term growth of the company focusing head office resources in London and further expansion.

Well we all know this is tripe. Within a few months the company had been closed by court order by petition by its Cambridge landlord. The full details are, as yet, unclear. Again Dr Theo clearly has no idea about who owns the company assets.

The email, sent by the company's Development Officer who has since left, concludes with this message -

We would be thrilled to have your further participation in this special opportunity to increase significantly your stake-holding in ETHOS.

You bet! We tried to talk to her on behalf of shareholders but she refused.

Dec 2016 - First Gazette filed against Ethos and co founder Hersche resigns

Jan 2017 - £300k investement filed at CH and another allotment of 3m shares issued for no consideration.

Feb 2017 - Ethos London England incorporated with Dr Theo as sole director and SH.
Feb 2017 - Hersche joins board. Maybe rejoins would be more apt.

Feb2017 - Petition to liquidate Ethos Global presented by The London Borough of Tower Hamlets and The Prudential - both of whom are creditors.

April 2017 - Name change to Soma London England. So why change the name from Ethos London England? Why rub out all of that brand awareness? Well...... You are not allowed to use a liquidated trading name to establish a newco whilst the process is still ongoing. The name may have value which is owned by the company. Of course we know that the process wasnt yet on going and it is illegal for company directors to 'plan' these things if it impinges on the outcome for creditors.

2 July 2017 - Ethos Global  - Court Order filed to wind up the company as result of February petition.

8 July 2017 - Dr Theo writes to shareholders - This is how he opened the email -

We are writing to update you on the status of Ethos Global Ltd (EGL) and our move to a new company structure. We invite you to own an equal amount of shares in a new company that includes the London location and expansion plans for new studios.

He goes on  - 

To protect the original vision we had to separate the operations that initiated in Cambridge under EGL and the current London operations. EGL will now be liquidated while the new company structure has been set up under a new trade, lease and assets in the same London location, owing to the contributions of our unwavering supporters including the London landlord. Following the Cambridge studio closure and months of increasingly expensive legal proceedings defending our position against multiple claims against the Cambridge landlord’s contractual breaches, we decided to not spend further resources in that direction and focus on larger opportunities in hand.

And on............

we are combining forces once again with Crowdcube to involve you in the new company structure. Crowdcube will play a purely administrative role holding shares in the new company for the crowd as nominee.

So CC are actively involved in this. There is no mention of the legality of running Ethos Global into liquidation, leaving creditors hung out to dry. The fact that the money invested in Ethos Global was used to invest in the new London studio, seems to have been missed by Dr Theo's logic. He clearly believes that he owns all the IP and assets and he seems confused about the closure of Ethos and opening of a new legal entity with no ties to Ethos, Soma. As the CEO of a company, you dont get to choose who to pay as creditors and who to ignore and you cannot reallocate assets via a liquidation. If the liquidation was a choice, planned by the founders (ie by refusing to pay the landlord they knew he would be forced to take this action, as the timings might suggest), as opposed to enforced on them as the filings suggest, then they are surely in breech of some company laws?  Maybe they are anyway? We are treading carefully as the liquidator's report is still awaited.

Why would investors want to follow the new Soma London England, seeing what they see here? Are Crowdcube really going to be the nominees holding shares in this newco after all they have been involved with in allowing Ethos Global take £700k plus off investors? What would the FCA say about that, given they license Crowdcube's activity? There are creditors here - it is not a straight share swap.

Meanwhile in the midst of this, Ethos Global have the balls to ask for new funding from investors, using highly contentious information.

Crowdcube have a knack of creating godawful messes. In the end the losers are the creditors and investors. Investors should know better - it's the creditors who get most of our sympathy. In this case both seem to have been treated with total contempt by the company and Crowdcube. Just for amusement, Ethos Global's Crowdcube financials had them with revenues of £4m and NP of £1.8m for 2017.

We have some correspondence from Crowdcube's XXXXXXX - answering some very serious accusations from some very worried Ethos shareholders. This is not to denigrate XXXXXX's efforts but you would really expect an FCA regulated platform, holding a nominee account with this mess on their hands, to have someone with just a jot of experience in something related to ECF, to be handling these matters. XXXXXX has none of the above, is mid twenties, read arts at uni, and clearly from the replies knows absolutely nothing about share ownership, liquidations and the mess Crowdcube are in. Shareholders may as well ask the lady at Tesco's check out - maybe they did!  That isnt XXXX's fault per se but it is further proof that Crowdcube isnt fit for purpose.

Finally - we received an email just now from SOMA. They are selling more future monthly memberships in their new business - the one that may or may not be legal. You get a discount from £250 to £150. All of this after the SOMA opening party was cancelled a couple of weeks ago. No reason given. The email claims that the offer sent out only two days ago, is fully subscribed - funny that we never received that offer?? And funny that the same offer was sent out on the 3rd August. Are people really being taken in by this?

And yes, you did just read all of that here!

Soma, So ma, So far or doe ray me far.............

In what has to be one of Crowdcube's worst ever investment shenanigans, ex Ethos Global, ex Ethos London England, soon to be ex Soma(?), have postponed their opening launch party in London. The announcement was made today, the party was tomorrow.

It's no surprise really. The management of Soma are the same two from Ethos, who took lots of money of lots of Crowdcube investors and were then forced into liquidation by the Court. The results have not yet been filed. We flagged this all up here. 

The funds from Ethos seem to have been used to fund the newco. Its all very messy and must have been planned well before they pitched on Crowdcube. Lets hope the liquidator has a mind to find the facts and not do the usual sweeping under the carpet job. All this phoenix needs is a strong fire extinguisher.

So now what am I going to do this Saturday  - they havent exactly given me much time to re arrange my diary. I think a trip to the beach at Antibes is called for - Jester, get my jet ready! 

Move along, move along, nothing to see here.

Ethos Global and its two founders are relaunching and rebranding before the old body is buried.

We received an invite today to the launch party for SOMA on 16th September - the new Ethos Global.

You may remember that Ethos was recently put into liquidation by the Courts for failing to return anything to CH. Apparently they are/were in dispute with their Cambridge studio landlords - a dispute that they or CC failed to declare, when they raised over £700k on Crowdcube in early 2016. 

Rumours abound about what might have happened but we can confirm that the Cambridge studio, which was the mainstay of the CC pitch and the business, closed very shortly after the CC campaign completed and then Ethos opened its London branch but used a different company. This company then became SOMA. 

According to more rumours the newco has taken all of the CC shareholders on board after Crowdcube, who had set this deal up using a nominee structure put them under pressure to sort out the mess. This is the company with the party.

Various questions arise.

The liquidation of Ethos Global, which took £700k off investors, has not started yet and nothing has been filed at CH except the Court Order. Clearly there have been some interesting goings on and it seems likely that someone is going to want to know the detail. Were there any o/s creditors for example, what money paid for the opening of the London studio and how did it legally change hands, how can the shareholders in Ethos be offered a deal ahead of secured and unsecured creditors? CC shareholders bought into a business with one successful unit but are now being offered shares in a company with the first unit due in two months. Is all of this legal? Was any of it planned? 

Anyone out there with any answers please get in touch.

Just how bad is the Ethos Global Scandal?

Ethos Global, forced into liquidation by the Courts, and their funding facilitator Crowdcube, are trying to dismiss the closure and shenanigans that led to it, as nonsense. What really lies beneath the surface may be far worse then we thought.

Cambrdige has a bit of record with Crowdcube. There is of course this on going case but not long ago there was the confirmed fraud of the Solar Cloth Company. The SCC was run by a Cambrdige resident who was using various different spelt names to hide his business failures - a simple fact that the Crowdcube DD department missed. Result - the loss of £1m of investors cash plus a whole pile of creditors being out of pocket. Only two companies made any money out this farce. They were Crowdcube with their commission and the insolvency practitioners.

Now we have another Cambridge farce; Ethos Global. The truth is proving hard to come by but a recent source told us, that the scandal is far worse than it appears. The company was apparently already struggling before Crowdcube and was in dire straights. That's not all the source said but the rest needs some verifying. QED - when they approached Crowdcube and were vetted by them , they were already in a lot of trouble. If true, can Crowdcube really be allowed to keep their FCA license? What is the point in having any regulation if it can be so blatantly abused with no sanction. 

As with the Olympics, where they should just let it be a free for all and see who blows up first on the 100m, no regulation is better than regulation poorly enforced.

We think that Ethos Global marks a new low in the many lows of the development of ECF as a credible long term channel for SME funding. If not here, then where will the FCA draw the line?

Ethos Global could have pitched on Crowdcube whilst withholding critical creditor information

Deeper into the swamp that was Ethos Global, a little birdie has told us that their Cambridge studio closed (allegedly) because they owed over £100k in rent - the bailiffs moved in. 

We dont know if this is true but it makes sense.

So whilst Crowdcube were lauding the massive success of Dr Theo and his wife in Cambridge, they were (allegedly) all of the time sitting on an undisclosed debt of £100k plus. You might ask where were the Crowdcube DD dept? As usual out to lunch. 

Surely they cannot survive yet another mess like this?

Ethos Global finally liquidated with extreme prejudice.

Ex Crowdcubers Ethos Global have finally been closed down by Court Order. Not filing accounts for almost 2 years and setting up new companies instead, shouldnt and we hope, will not, pay. 

We have written about these guys a few times here - it's taken quite a while to see them finally closed. But as the new studio in London is still being operated by the same people but just under a new name, where is the justice in that? 

The Court Order is still being filed so we may have to wait a day or so to find out what will happen to 388 Crowdcube investors and £709k they invested - all via a Crowdcube nominee acount. Money that paid for the new London set up. You may have a good idea from our past stories how this one will end. 

However this one looks a little juicier, given the various company set ups and shenanigans that have taken place since the Crowdcube raise. Of course Crowdcube have no idea this has happened - their Ethos page still proclaims the success of the new public launch of their new London site last year. Which is now owned by Soma London England, which is in turn, owned by the same directors who took the £709k via Crowdcube and immediately closed down the Cambridge studio. Oddly in January this year, Ethos Global filed a raise of equity finance, but the filings revealed there was no money involved, just an issue of 30m free A shares.

The new business - SOMA - School of Mindbody Athletics (!) is due to launch in September this year according to their new website http://soma.house/. They continue to remind people that they are a couple of Cambridge graduates - clearly not in English or Marketing. We simply do not believe that they will be allowed to get away with this.

Soma website appears to be owned/operated by US based Mindbody which also has a connection to Soma Fitness based in California. At this stage we gave up.

The newco has apparently TM'd its SOMA  - fact is TM means nothing and Soma is already taken several times  - their version has no application or recorded registration. 

Makes you want to cry. Makes you really want to get hold of CC and ask them just what the fridge they think they are doing.

We have asked the company several times for a comment and will try again, but the only reply we got was a no comment. A recent email to the same PR person was auto sent back as he has seen the light and left.

'You bet ya big time' gargled Grey fish.

PS - We have still had no response from the company or CC. But people we have spoken to in Cambridge said that the Ethos studio there was always full  - which is surely a sign of a successful business. So why did the Cambridge studio close suddenly just after the CC raise and why is it still vacant? Likewise why start newco's after the CC raise and have them running the now (we assume) busy London studio??

Ethos spins a complicated web.

Ethos Global raised over £700k on Crowdcube just last year. Accounts are now 8 months overdue and other companies now appear to be running the Ethos Yoga studio in London. Where are shareholders in this complicated web?

Shareholders invested in Ethos Global Ltd on Crowdcube  - a company run by Dr Theodoros Koutroukides and Jennifer Lynn Hersch. Company number 07874390. Remember those names.

We have written about this company before - here

Ethos was described by Crowdcube as - 

Looking to disrupt a £50b+ global industry, ETHOS is a chain of boutique yoga & fitness hybrid studios combining health, science and technology. Growing the cash-generating Cambridge headquarters........

For a company with one studio, you might think the use of the word 'chain' to be typical Crowdcube BS. Shortly after this investment was completed, the 'cash generating Cambridge HQ' closed down; annihilating the one link chain. The property, St Andrews House First Floor, appeared on the market for re let and is still there with Bidwells.

Shortly after this, a new Ethos studio opened in London. This studio is still running but is not run or owned by Ethos Global according to their website's T&Cs. This studio is run by Ethos London England Ltd co number 10601085. Not to be confused with Ethos London Ltd which is an entirely separate company. The Directors of Ethos London England are one Theodoros Koutroukides and Jennifer Hersch. By dropping the 'Dr' and the 'Lynn' they appear at Companies House to be different people to the ones running Ethos Global - but they are not. Hersch has now resigned from Ethos Global. Since February 2017 when this company was set up, it has changed its name to Soma London England Ltd. It is in turn 100% owned by Soma Holdings, company number 10598796, which is 100% owned by Koutroukides. 

Meanwhile accounts due at the end of September 2016 for the Crowdcube funded company, are missing. So what exactly do shareholders in this Ethos now own? Who knows. Crowdcube projections had them making £1.6m by the end of 2016 and £4.6m by the end of this year. Who wouldnt want a piece of that; if it was true?? It seems unlikely as Ethos Global dont seem to do anything anymore. Maybe that's their version of Mantric Yoga.

The company was issued a compulsory closure notice a few months ago but has since had this rescinded as it has raised what appears to be £280k in a new share issue. Or so the filing shows. As it appears to have nothing to do with the London Ethos Yoga studio, why would anyone invest in it? Again who knows.

All in all, a very strange set of events and outcomes.....so far. The accounts would help but when we asked (repeatedly) about them we got nowhere. We were told that the company was just fine - doing well. Certainly the London studio, which appears to be 100% owned by Koutroukides is doing well. We just wonder what money helped to set up this studio? Could it have been the £700k plus raised for Ethos Global on Crowdcube? If this is all perfectly normal, why change the company name, twice, set up a totally new company structure and close down your cash generator and why appear in CH filings with different names to the original company directors' names. One being different might be normal but both of you?? Seems unlikely. 

What's happening at Ethos Global?

Ethos Global raised £709k on Crowdcube a year ago. Valued then at around £4m on the basis of their Cambridge studio and the new opening in Spitalfields London, the company accounts are now 5 months overdue.

Being late filing annual accounts is nothing new. Being 5 months late is however unusual. They are also overdue their Confirmation Statement, so their page at Companies House is mainly in the red. We decided to look into it and came up with some rather odd discoveries.

Ethos based its whole Crowdcube pitch on the success of its Cambridge studio in the St Andrews House building in the centre of Cambridge. According to their shopfitters AOC, they spent £1m on the fit out. According to the Crowdcube pitch - 

Since launch our Cambridge High Street location has served over 10,000 individual customers and exceeds revenue targets with 83% customer rentention rate. This was achieved prior to first investment in November 2015.

So it has come as some surprise to find that the Cambridge studio has closed down. The space is currently on the market with Bidwells  This studio had been going since 2013 and shortly after raising their money on Crowdcube, they closed it.

In order to get to the bottom of this, we sent Ethos a series of questions. See below

1. Why have you closed your Cambridge studio?
2. Did you sell the lease or just close?
3. What happned to the £1m shopfit investment (AOC’s figure) which you invested in Cambridge.
4. Was the closure on the horizon when you raised the Crowdcube funding?
5. Why are your accounts now very overdue?
6. You claimed to be opening a minimum of one new unit per year. So how is this going? To date you seem to have closed one and opened none?

We had this reply today from the 'Communications' Dept - 

Hi Rob, 

Thanks for your email and apologies on the slow reply. 

At this moment in time ETHOS Global ltd has no comment on the questions below. 

Kind Regards, 

DANIEL BOOTH

Head Of Communications   

There is no reason for Ethos to answer our queries - we are not shareholders. However we do have a good number of readers who might be.