SuperdopeTV keeps the COO a secret from investors during MicroVentures crowdfunding campaign; Atty Leighton Lloyd secretly hired for $120k/year 35 days prior to the end of the offering (now everyone has 5-days to decide if they want to re-invest due to lack of disclosure)
Posted on December 15, 2017 at 2:13pm PST REG CF MATERIAL CHANGE
Why is it so important to disclose facts about a company that is crowdfunding?
Basically, a Form C is a document with the SEC so that investors are disclosed key information about the company they are considering investing into. Keep in mind, with this type of crowdfunding (Regulation CF, under which a company can raise about $1m per year), really anybody can invest - even those without much money.
Most of us are "unaccredited" investors, which mean we don't have $1m in the bank or $200k/year on our income tax return. Accredited investors have a high net worth, and assets that have been verified by a regulatory body like FINRA.
What does a "material change" mean on a Regulation Crowdfunding (Title 3) campaign?A material change is something that happened wihin the company that should be made aware to investors. In this example on SuperdopeTV with thier MicroVentures campaign, they hired a COO under a 3-year contract for $120,000 per year plus bonuses. Even though they hired the COO, Leighton Lloyd, on November 8th - they hid this fact from investors for more than 35 days until they filed an amendment with their "Form C" to the SEC.
Explained by the Securities and Exchange Commission (SEC.gov):
Amendments to Offering Statement
For any offering that has not yet been completed or terminated, an issuer can file on Form C/A an amendment to its offering statement to disclose changes, additions or updates to information. An amendment is required for changes, additions or updates that are material, and in those required instances the issuer must reconfirm outstanding investment commitments within 5 business days, or the investor's commitment will be considered cancelled.
What Happened on Friday with SuperdopeTV, Microventures, the SEC, & Bevilacqua PLLCThe public had caught on to sloppy missteps by Mychal Simka's startup, SuperdopeTV, a "kids entertainment network" that was actively being crowdfunding on MicroVentures. To help Mychal stay in compliance, he acted under legal guidance from Lou Bevilacqua, a crowdfunding attorney known for his work on Regulation Crowdfunding (Reg CF) filings and helping his clients assure their compliance.
The crowdfunding for "SuperdopeTV" had officially ended on December 12, 2017. They had ended with around $279k funded from 271 investors. HOWEVER, these investors were never told that an attorney, Leighton Lloyd, had been appointed as full time COO of SuperdopeTV and left his job at Gipson, Hoffman, Pancione.
According to the Form C amendment, critical information was held back from investors between November 8th and December 12th during the crowdfunding campaign.
Copied from SuperdopeTV's SEC amendment (Form C/A) on SEC.gov:
Chief Operating Officer, November 8, 2017 through present. Mr Lloyd is responsible for the day-to-day operations of the company.
WHY WOULD THIS BE HIDDEN FROM INVESTORS?
Joins SuperdopeTV as COO, investors not told
Finally, investors are getting the chance to find out - but we're sure it will once again be hidden in such fine print that many will re-invest without realizing they had been intentionally duped and probably didn't make their way down to PAGE 23 OF 38, where this information is disclosed on the amended filling.
Not to mention, it says right on SEC.gov that "If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned."
Changing a COO during a Title 3 crowdfunding campaign is almost always considered a "material change.According to MicroVentures.com:
"If, prior to closing the funding, the company you're investing in makes a material change to the offering terms or other information that was disclosed to you, you will be given five business days to confirm that you still want to make your investment. If you do not confirm your investment within five business days of that notification, your investment will be cancelled."
Blog tags: SuperdopeTV, Mychal Simka, Crowdfunding, MicroVentures, SEC, Investor Disclosure, Atty Leighton Lloyd, Crowdfunding Failures, Estelle Kennedy Law, Gipson Hoffman & Pancione,
Keeping COO a Secret while Crowdfunding
Most Popular in Crowdfunding1) SuperdopeTV - Lack of disclosure about secret $120k/year COO recognized by SEC CROWDFUNDING DISCLOSURE 2) To SuperdopeTV investors, a MATERIAL CHANGE was intentionally kept a secret NO FORM C AMENDMENT 3) How Atty Leighton Lloyd became SuperdopeTV COO; Silencing attempt by Estelle & Kennedy CEASE & DESIST 4) How much abuse has been reported at MicroVentures? MEDIUM.COM & GLASSDOOR REVIEWS 5) None of Simka's crowdfunded companies have websites or offices DO SIMKA'S COMPANIES EXIST? 6) CAPTURED: Simka's deleted drunk investor discussion rant PRIVACY VIOLATIONS 7) MicroVentures Investor Information Privacy Breach INVESTORS OUTRAGED 8) Gipson Hoffman attorney hired to settle up on an overdue "Bunny Bravo" bill LLOYD IS COO PRIOR TO 11/28 9) Merry Christmas email is futile intimidation attempt, CC's 5 lawyers HO HO HO! WHO WOULDN'T GO? 10) Slick Lou Re-Negs on 7/19 "Bunny Bravo" contracted vendor equity issuance CAMPAIGN MARKETERS SCREWED 11) Due dilegence, privacy, & disclosure dark cloud over SuperdopeTV's crowdfunding offering PEOPLE CATCH ON 12) Bunny Bravo vendor forced to "settle out of court" ATTY. LEIGHTON LLOYD 13) Bunny Bravo campaign team (16+ people) REQUIRED by Simka to pony up cash MAKING WORKERS INVEST 14) 'TMZ' & 'Hollywood Reporter' reach out to our bloggers HOLLYWOOD CATCHES WIND
I guess the old idiom “fake it til you make it” has crossed over into crowdfunding, where @MychalSimka told Bunny Bravo investors that he was the brain behind “Birds of Paradise”. Wrong, #deceptive and downright sick. It was a @Lionsgate / @GrindstoneEnt film NOT @SimkaEnt pic.twitter.com/vTS6wQHtnX— JOBS Act Title III Predatory Financing (@RegCF) December 13, 2017