Saturday, 17 February 2018

Brexit funder Peter Hargreaves buys 37% of Crowdcube funded Powered Now.

In a move that massively dilutes Crowdcube shareholders, Peter Hargreaves has invested £2m into the SME invoicing and on line form company, Powered Now. 

Powered now had raised £1.1m on Crowdcube in two tranches in 2014 and 2015. In order to achieve this Hargreaves' investment, the company altered existing shareholders pre-emption rights by special resolution. That's why the dilution took place. 

Whilst Hargreaves may be castigated for his £3.2m funding of the Leave campaign in order to help him avoid the new EU tax avoidance directives, his involvement in any start up must be a massive plus. Powered Now certainly needed that boost.

The company recently filed accounts for YE Jun17 showing a £500k loss against a projected £1m profit in the 2014 projections. Having completely missed those 14 projections, the 2015 version had a loss for the same year of £347k; so much closer to the mark.

The company gets rave reviews for its service and products and now it has a very serious backer, we'd expect it to make good progress. It is just a shame that pre emeption rights which were clearly sold to investors have been tampered with. Mind you the company did really need the cash.   

Friday, 16 February 2018

Crowdcube's Tempus Energy do not disappoint with further large losses versus projected £6.5m net profit.

Maybe one day Tempus will supply some good news - but not yet. A £500k loss for YE June 17 has replaced their projected Crowdcube £6.5m profit. 

We wrote about them here

Tempus have excelled in missing their targets and they are certainly up for Crowdcube's worst performing success, ever.

Now they have a new team of directors (all the others resigned) and some cash. Large intangibles are holding up the mantle.

Good luck with this one. Not quite as Crowdcube described it back in 2015, when they took £650k off investors. 

Wednesday, 14 February 2018

Yet another Crowdcube Bond issuer fails.Taylor St Baristas files a £800k loss.

Hi - Hot from the Swamp today we have the Taylor St Baristas accounts. TSB used Crowdcube to raise £1.8m on a 4 year 8% bond. Target profits for YE Mar17 were just over £1m; generated by 20 coffee shops. The £800k loss has been generated by just 10.

Yet again we see the sort of ludicrous projections that Crowdcube promote on their platform coming to a sticky end. TSB now operates just one more unit than it did before it took the money off investors. Where did the £1.8m go? Who knows but.its gone.

So what? Investors are still getting their interest payments. Well yes for now they are. But with a BS at March 17 of minus £1.2m and no new funding since, it all looks a little stretched. The money is due back in 2019.

Investors can do nothing even if TSB collapse, as the bond was issued by a 100% subsidiary - Coffee Bond plc. Coffee Bond plc would eventually go bust but has no claim over the assets of TSB - as in the Square Pie fiasco. This no sense arrangement comes courtesy of the Crowdcube Primary 7 Bond Origami Group. Bless.

You would love their Bond Invitation Document  - this one was certainly Licensed to Thrill.

It all fits with our news breaking story of the Sqaure Pie failure, which was picked up by The Times today and the poor performance of both The Eden Project and River Cottage, whose bonds are due for repayment soon. Dont you just love the way Crowdcube sidestep the important issues and continue to produce a constant stream of PR sludge.

Swamp out.

Tuesday, 13 February 2018

Insolvency Service get it wrong again over Solar Cloth Co

The UK Insolvency Service has looked at the dealings of the Director of The Solar Cloth Company and decided that they do not warrant any action. 

No that is not a joke. 

You may remember the SCC. It helped itself to loads of investors cash using false information about the founder and his previous antics. The story was well written up in The Times. It was a caste iron case of fraud - all helped out by the Crowdcube platform.

Now in letting this individual go, without any reprimand the Insolvency Service quotes Section 6 of the Company Directors Disqualification Act 1986 where in order to be disqualified, said director has to have acted in a way that makes him unfit to be a company director. Text below -

Dear Sir/Madam, 

The Solar Cloth Company Limited Company Directors Disqualification Act 1986 I refer to previous correspondence in this matter and advise that as a result of the investigation undertaken, the Secretary of State does not propose to take disqualification proceedings against the directors of the above company. Such disqualification proceedings when brought are done so pursuant to Section 6 of the Company Directors Disqualification Act 1986. 

Whilst this may not be currently relevant to you it might be helpful for the future if I advise you of the wording of that section. 

It says: (1) The court shall make a disqualification order against a person in any case where, on an application under this section, it is satisfied — (a) that he is or has been a director of a company which has at any time become insolvent (whether while he was a director or subsequently), and (b) that his conduct as a director of that company (either taken alone or taken together with his conduct as a director of any other company or companies) makes him unfit to be concerned in the management of a company”. 

Accordingly if, in the future, the Secretary of State should learn of any unfit conduct relating to this company it could be included in any disqualification proceedings brought in respect of this or any future company failure. 

Yours faithfully Naomi Fulford 

Well if this guy has not acted in such a way then we are not going to see any companies' directors disqualified ever again. Also, it seems unlikely the company will be able to oblige the Secretary of State in the final comment as it no longer exists! What a ridiculous outcome.

So just beware the presence yet again of one Perry Carroll or whichever name he chooses from his list. He'll be the one flying some amazing money spinning business and asking for your cash.

We wrote about him and SCC here

Clearly something needs to done about the 1986 Act - yet another piece of useless legislation that pre dates the mass use of the internet. Just WAKE UP will you please.

Monday, 12 February 2018

Amidst the doom and gloom we have a good news story from Thailand.

SOM SAA is a Thai restaurant that raised £700k on Crowdcube at the end of 2015. Now at the beginning of 2018 it is going strong, receiving rave reviews and delivering what it promised.

How investors will see a return is a mute point but at least these guys stated in their pitch that they had no intention to roll this out until after the founding restaurant was well established. They have not been forced to return for more capital like nearly all the other trading Crowdcube successes - so investors have not been diluted. How refreshing it that?

YE April 17 accounts show profits of £128k which whilst slightly below the projections, are real profits.


Friday, 9 February 2018

Bra Entrepreneur using Coin to divert the gaze of the FCA?

In the latest crazy twist in Fintech, Bra millionaire and Baroness, is launching a new Start Up fund based on crypto currency. 

Michelle Mone and her business partner Barrowman, are about to launch an ICO - Equi. Their new coins will be part of their new fund for start ups. Why they have chosen to raise the money by issuing a new coin is a mystery to me apart from the rather too obvious media attention.

This deal is being set up in such a way that it circumnavigates the eye of the FCA. Its a very fine line they are drawing and I just wonder if this is the sort of monkey business that a Peer of the Realm should be involved in? They get around the FCA regulation because the coins are non transferable so are not considered within the FCA's remit. In fact this is probably the only reason they are even talking about using coin.

If it comes off, which seems unlikely and the FCA quite rightly bring it within their remit, one hopes that a Peer of the Realm will not find another smoosh to hide it under. After all, despite her success, it should be a one size fits all when it comes to financial regulations.

Working in Tandem to help their Seedrs investors by reducing their value by 96%?

Tandem, the online bank, is now offering its Seedrs shareholders, the right to purchase new shares at £0.60. When Tandem first raised money on Seedrs, the shares were worth over £13.

This is all part of a 'deal' cobbled together by the ever smiling, bearded founder of Tandem, Ricky Knox. Ricky is apologetic about the dilution. He is also apologetic about the share price. 

This all comes about because Ricky had lost Tandem's banking licence; which for a bank, is serious. In order to get it back, Ricky bought Harrods Bank and as part of that deal was required to raise £25m. £10m of this came from existing shareholders convertible loan notes. The other £15m was underwritten by a Middle Eastern fund. 

Ricky is careful to point out that despite the fact the company had already trodden all over investors by removing their pre-emption rights, he is now offering them a chance to limit their dilution by buying shares at the new £0.60 price. He goes on to explain that this is in no way an attempt by the company to get further investment from them. 

As one sanguine investor put it - a £500 investment in the original Seedrs campaign is now worth £20, so to get your money back the company would have to be worth £1.5bn. He also points out the crucial con - undrum that to not invest is going to mean you wont ever see your money back.

They should write a song for you Ricky - like the Ricky Baker number.