Tuesday, 6 February 2018

Something remarkable has happened - a company associated with Crowdcube has made a large profit


White Label Crowdfunding has reported profits of £352k YE April 17. That's an increase on all previous years of £352k.


White Label are associated with Crowdcube because they 'bought' a Crowdcube failure, UP Investments. We wrote about this odd deal here. It has now gone through. 

What is odd is that prior to doing this deal, WL were doing nothing and UP were making heavy losses. So just how you can combine these two and create a £350k profit is a puzzle. 

But the profit is sitting there in black and white and is backed up by a healthy trade debtors entry of over £300k. 

Shareholders who gave their money to UP may be wondering what has happened to their value now that they own shares in WL (this was part of the deal). This again is odd as SH's in UP were advised by the founder that UP shares had no value when the sale went through. Clearly a company able to generate net profits of £350k from a standing start has some very considerable value. 

Lucky investors!

But wait......... UP are late (only just) filing their accounts. With no shareholders apart from the profit making WL, why is it still open? Well you may remember that it was making heavy losses - which is why it failed (sorry sold). So what happened to those losses. We will just have to wait and see but our guess is no one is in a hurry to file anything at UP.


3 comments:

  1. Thanks for your research on this Rob. I have to be honest in that I had no idea what had happened to this company until I read your blog. There was certainly no update provided by the company or CC that I could find of...

    It seems like the company has gone through many different types of 'share consolidations' which has (and I have no idea at all how this has been calculated) resulted in me holding a princely sum of 1 ordinary share in the new company White Label. Quite how this is calculated from my original modest investment in UP of £200 is anyone's guess.

    For those shareholders in the original UP, they should be able to find their new shareholding here:

    https://beta.companieshouse.gov.uk/company/08922471/filing-history

    ....view the Confirmation Statement on 17th March 2017



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    Replies
    1. The deal was sent out to all SHs apparently - here it is. Id be curious to know how many didnt receive this -

      Dear Shareholder

      As per my recent email, the Board has concluded that there is no prospect of UP Investments Holdings (UK) Limited (“UIH”) raising further funding to put our platform onto a commercial footing.

      The Board has thus reached an agreement for the sale of UP Investments Holdings (UK) Limited (“UIH”) to White Label Crowdfunding Limited (“WLCF”).

      The Board recommends the sale of UIH to WCLF

      The Board has performed an exhaustive search for potential buyers over the past six months, and is confident that the offer from WLCF represents the best available value for shareholders. The owners of WLCF have impressed the Board with their development plans for the Platform.

      The Board has agreed that to put UIH on a commercial footing requires further development work. This work will need substantial further funding, and WCLF have a better chance of raising the capital needed to achieve this.

      Both parties have agreed to structure the Deal as a simple Share-for-share exchange, with each of you receiving 17 WLCF Shares for every 30 newly consolidated UIH Shares that you hold.

      The sole asset of UIH is its investment in UP Investments Limited (“UIL”), and UIL has made significant trading losses in the two accounting periods that ended on 31/05/2016.

      Enterprise Investment Scheme (“EIS”) shareholder considerations

      The Board’s financial advisors believe that UIH shares do not currently have any financial value, and the Board urges you to seek to file Negligible Value Claims on your shares as soon as possible. Filing a Negligible Value Claim will allow you to make Share Loss Relief Claims against your total income of the current and prior tax years.

      For those of you who are waiting for your EIS claim forms, please note that our accountants have submitted the EIS1 form to HMRC. Therefore you should expect to receive your EIS3 claim forms shortly.

      Any Income Tax Relief you have claimed to date under the provisions of either the EIS or the SEIS Scheme will not be reclaimed, but instead, will be deducted from the initial cost of the shares when calculating the Share Loss Relief.

      The Board hopes that the WLCF shares that you receive in exchange for your UIH shares will appreciate in value once the Platform begins full commercial operation.

      Please bear in mind that any gains you realise on the WLCF Shares in the future will be subject to standard Capital Gains Tax.

      Shareholders are advised to take professional advice on all the above tax matters and the Agreement itself before taking the steps set out below.

      WCLF's vision for UIH

      Attached to this email is an overview, written by the prospective buyers, of their vision for UIH. Please have a look at this before the formal offer is made later this week.

      The next steps in the process

      In the coming days, the prospective buyer will be emailing you with the following the documents via an online signing service. As of tomorrow, the directors - including myself - will sign the agreement in advance of other shareholders.

      A copy of the Share Sale Agreement
      A share indemnity letter
      A stock transfer form with your details

      When you receive these documents, please give them your consideration before making a decision to sign. Your signature will state to the buyer that you are willing to accept the terms of the Deal.

      A final thank you from myself

      The last twelve months have been difficult at times. They have taught me that a new injection of funding and enthusiasm is needed in order to realise my vision for UP.

      The people behind WLCF share both my vision and my approach, so I am pleased to recommend this deal.

      I have agreed to stay on with the company as a non-executive director. I will look to help smooth the transition and assist the new owners with progressing their plans to reimagine and restore UP.


      Yours sincerely,



      James

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  2. UP is now wholly-owned by WLCF, so why would UP still be filing separately?

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