Brewdog relaunches its US fundraising

Just when you thought it was safe to go out.......... Brewdog launch another $10m punk equity round in the USA.

Each one of the 800,000 new shares in the US subsidiary, is going for $50.  As you can see from the comments we didnt do a very job guessing the valuation. Its a lot. The now rather tattered fat cats were once again thrown from a helicopter over the City. I do hope the reaction to the funding is more imaginative.

The one crucial issue with BD is cash - they have stuck themselves a very long way out there - sort of a Napoleonic advance on steroids. There can be no retreat if the cash runs dry.

Should be fun to watch.

Phew - At long last Little Brew is shut down by the Government.

Little Brew raised £110k back in 2013 on Crowdcube. Its last filed accounts were for YE Sept 2014. So you can imagine it will come as some relief to Crowdcube investors that they can at last claim their loss relief 3 years late. 

Its a typical Crowdcube story. Great enthusiast Stuart Small, liked beer. He saw all these other beer enthusiasts raising money on Crowdcube and eureka, he invented Little Brew. He had no experience in brewing or business but then in 2013 on Crowdcube you couldnt get through half a pint before you had been given £100k. Of course all of this was and still is, orchestrated by the promotion of magic bean like profits and ROI. 

The fact that the company has been trying to close down for 4 years is something of an oddity. Is that a record? Eventually HMRC have stepped in and closed it will be on 18 June 2018. 

Thank god that's over. 

Here we go the round the ............... Bidstack reversed in to Kin Group.

So Bidstack. Founded by the same guy, James Draper, who was Head of Commercial at Shopwave (according to Crowdcube). Both used Crowdcube. Bidstack was valued on Crowdcube in 2015 at £1.1m. 

Bidstack has now been reversed into Kin Group - a shell co listed on AIM. It has been termed a reverse takeover. Kin had to take over someone by August this year or lose their AIM listing. The deal is still not completed.

It appears from said deal, that Kin are paying £400k for the entire share capital of Bidstack by way of investing this sum in the company. We are not sure what sort of accounts Bidstack have but from previous filings it doesnt look too pretty. Bidstack have been playing ping pong with their accounting dates since their Crowdcube raise. 

The other company Draper used to work at, Shopwave, had projected net profits on Crowdcube of £1.6m for 2016 but only managed to bring in losses of £50k. Silly old projections. 

Crowdcube investors, there are only 66 of them, will receive shares in Kin Group. Their shares are currently suspended.

This story reminds me of a few other recent events involving Crowdcube investors and steam rollers. I suppose it is that time of the year when the country fair lunatics are out and about and the ale is flowing. 

Be careful out there.

Cauli Rice aka Fullgreen are looking for money again - this time their numbers really dont add up!

As an investor, I am interested in how well company management deal with important issues. There isn't anything much more important for a growing company than raising capital. So why would you send out an email about a new round with a massive typo?

Ok, so I know this blog is littered with typos, but Im not asking for your money, yet. 

In its latest announcement to SHs, Fullgreen tells them that its 2018 expected revenues will see an increase of 869% on 2017. That is certainly a eye catching number and if true Id be putting some money in. But unfortunately it's not - the real increase is a somewhat sad 86.9%. Talk about handling expectations. 

What must be alarming for SHs is that the company raised £1.47m on Crowdcube (for the umpteenth time) at the start of 2018 and now they are back for more. As usual with Fullgreen, it's what they dont tell you that carries importance, rather than what they do. 

Ignoring the unbelievable gaff on the percentage increase, the sales for the UK for 2018 have already been reduced from £2.6m to £1.8m - that's since the last Crowdcube pitch in February 2018. This reduction is made up for (or most of it is) by projecting heavier future sales in the USA. Whilst they have achieved excellent distribution there and are looking to do the same in Australia, these projected sales are not certain. They are not numbers based on pull through. 

What happens if, like in the UK, sales flop? If you read reviews of their products, they get a large number of yuks. Far too many in our opinion. Is that why sales in the UK have been slashed by £800k or 30% in the last 3 months? Initial listings were excellent here but pull through sales have slowed (the yuk factor?) and now numbers for overall UK sales have been cut. That pattern has to be worrying. We have said many times on here and many many times about Fullgreen: initial listings are not the crucial thing - pull through sales are.

In the last Crowdcube pitch, they explained away a fall in turnover of 50% from the previous projections, as being down to a major listing being delayed. As they dont mention the large fall of UK sales in this latest email, they dont have to explain it either.  

This new raise is at the same value as the one earlier this year - so is essentially a down round if you take into account the £1.47m that went in in February. 

Another problem we have is that the last round, just 3 months ago, was to raise £400k and they achieved £1.4m - so that's more than 3 times the 'required funding' they talked about. Has turnover risen by 3 fold? No. Do they expect it to? No. So why have they run out this £1.4m when it's so much more than they told investors they required to do the same numbers? I think they are just not good with figures. Their reasons are that growth has outstripped the funding they have. Enough said.

Finally we couldnt help notice that in the Crowdcube IM for last February, Fullgreen wrote the following for investors information -

'We expect UK sales to continue to grow at a healthy year on year growth of 50% due to continued introduciton of new flavours and new product formats.'

So not only have they reduced the UK sales for 2018 by 30% (£800k), only 4 months ago they were confident that these sales would see increases of 50%. I think even they might have a problem explaining that. You also have to factor in the dramatic fall in the GDP for the product about ot be manufactured in the US  - a fall from 41% for UK sales to 29% for US sales. Meaning that for every sale lost in the UK, US sales have to increase by around 1.5 times just to stand still. 

In case you are wondering, the bronze geezer is the earliest example I could find of cauliflower ear. And why not.

Matt Newing casts new light on the TheVibe and Luke Massie

We will never really know what happened with Thevibe when it went into administration and was then quickly bought out by its founder Luke Massie. But at least now we have another side of the story.

An interview with Newing, who lost £600,000 when Thevibe closed, published in Business Cloud here makes for interesting reading. 

The total loss from Thevibe is yet to be known but one thing is for sure - there are some 'facts' out there that do not quite add up. 

For example, Luke Massie had enough money to buy the company out of administration and put it into his conveniently, newly formed Vibe Tickets Ltd, but he didnt have enough to rescue Thevibe. Yet the two amounts seem to us to be almost the same; especially as Newing had pledged another £75k. Newing claims all the talk about Massie being backed into a corner by legals is just a red herring. We have already said we think this too. Yet two of the three main backers of Massie, in fact all but Newing, have decided to fund him again. So how does that square?

Recent press does Massie few favours when it comes to taking him seriously

 - https://www.thetimes.co.uk/article/branson-favourite-luke-massie-goes-under-ph278smcz

Massie says he has moved on. Which is fine so long as he hasnt forgotten his promise. 

Whatever the truth, Massie has now stated through this blog that he will give all Crowdcube investors shares foc, in Vibe Tickets, equivalent to the £600,000 worth of shares they held in Thevibe. Now this hasnt happened yet but he had better follow through on it if he wants to maintain any credibility, anywhere.

Did the sale of i-Comply to Veracity UK Ltd give Crowdcube investors any return?

Around a year ago, i-Comply which had raised £50k on Crowdcube in 2012, was 'bought' by Veracity UK. Almost immediately it has started to make profits. But what did the 46 Crowdcube investors see?

We really have no idea. Nor do Crowdcube. Their web page for i-Comply doesnt even mention the sale. It would appear no one has informed them. Clearly if there had been even the slightest positive news for the 46 Crowdcube investors, the platform, never shy of creating a good story, would have plastered it wall to wall for all to lap up. 

Oh well at least the invention is now safe. Isnt that what they said about Sugru? Looks like the Crowdcube crowd are really just do gooders who love to see a great idea succeed but dont care if it benefits them. Hats off for that. 

Will Emoov's amalgamation solve anything?

We'd say the merger of Emoov, Tepilo and Urban is a positive move. But as the Irishman said when asked the way,  where are you coming from?

All three of these online estate agents have one thing in common, they burn large amounts of capital to make increasing losses.

The last year of filed accounts shows an accumulated loss of around £8m. So maybe there will be economies of scale with one administration cost instead of three? Will this scaling up of the brand (whatever the new one is) have an impact on the Purple Bricks market leadership? Probably not. 

Amusingly, according to the ex Dragon James Caan, who is a major backer of Emoov, this was not a merger. His story is that it was a takeover by Emoov of the other two. If this is true and no one but Caan is claiming it is, then that could be good news for 765 investors who put £2.62m into the company via Crowdcube in 2015.

The 2015 Crowdcube pitch had the usual grotesquely inflated projections and showed the company making losses for YE April 2017 of ~£1.6m, when in fact the loss was £3.1m. But who cares, eh? According to Crowdcube the event was a merger.

Now the 765 have a smaller share in larger pie. Lets hope that it doesnt fall to bits when its cooked.