I'm getting tired of seeing the never ending spin from one or another person that given that justice would be considering changes if it wasn't for the fact that jody swote the final chapter.

I don't know phillip, and I'm sure he's a nice guy, but nobody that took an accounting class at community college has a lack of financial knowledge so great that they couldn't see two trains inexorably colliding, a process that began well before 4Q12 and in fact stretched back to prior to the last round of funding closing (late summer).

A mere glance at the numbers showing 90% of the days orders a) via 50% pre-sale b) had significant coupon (often 30%) stacked on top of that that applied to the total not just their share, c) 99% got free shipping that they valued at $6 but likely ran twice that much of the time. When you add it all up you are losing money on every sale even if your product is free, you have no marketing costs, no fullfillment, no chargeback, no backoffice, no ceo's that need to bust it at yet another conference.

It was so bad that you could easily within seconds spot the real transactions - people paying ~70%-~%80 of list and shipping. because you;d only see one once a day if you were lucky.

There's a phrase accountants use when they really wan to to say a certain word but it gets you sued if you do. So here we go. There was an obvious material weakness present in absolutely everyone conducting the business of the board and the c level posts. As much as nerds want to believe that crap about how dumb the population is, people aren't that dumb.

Make no mistake, there was something completely unmistakable for incompetence at the very best at work here. Sure they wasted a bunch buying customers, but thats not how you go from $5+1secured in a few months.

This money walked out the door. Where'd it go? Well it turns out that post crisis the lead investor and secondary spot of the board poured over books day in day out withe the brand new "fall guy" president, elected by the board two days after jodys death. They amounted to the entirety of the forensic accounting done and found that no money was missing though employees never saw the books.

Then, 28 days after his death they transferred all shares and assets without prior announcement to in effect liquidate without the oversight of the court. The key part there is oversight - a court appointed trustee would have the obligation to claw back money, especially from insiders. The Instead in this case the insiders paid a significant amount of their cash on hand (six figures) as they wrapped up to provide sherwood partners a hefty cash guarantee on their liquidation expenses, and likely covered some of their secured debt as well to buy the ascent of the major secured creditor. While that happened in secret they continued to ensure contractors that'd be paid and enough was there. Now that's 0 for the benefit of bankers. For no more than 100-200 gained off of misclassified 1099s.

That substantial fraud occurred goes essentially unquestioned in those circles. That the active member of the board from cue ball was at least guilty of gross negligence seems difficult to argue against.

And yet nobody in the whole process is willing to stand up, investors, employees, the many parties only speaking through lawyers, about it because of the code of silence in vc-istan. Which is absolutely real and will absolutely fuck you.

If you're doing venture backed lottery schemes for a living you should make sure find some of the contrarian stories and listen - when things don't work out the windowns are far from having free snacks.