When an SEC settlement with TruCrowd came across my desk, the name rung a bell. I performed a search and sure enough in 2017 I’d noted it as an update to our KulaBrands assessment. At the time, KulaBrands was utilizing TruCrowd to flog virtual shares at $17.82 each.
To entice investors, KulaBrands boasted a “pre money valuation” of $17.5 million. As of May 2nd, 2020 KulaBrands’ share offering closed, garnering $97,279 from 192 investors. Prompted by TruCrowd’s SEC settlement, which for the record has nothing to do with KulaBrands, I thought we’d revisit KulaBrands offering and see where it’s at.
For those unfamiliar with the company, KulaBrands is run by co-founder Peter Gantner (right). KulaBrands is essentially a crowdfunding site, manipulated through an MLM business opportunity (affiliates vote on what to crowdfund and then perform the fundraising) (affiliates vote on what to crowdfund and then do the funding).
This manipulation differentiates ordinary crowdfunding, by way of backers having a vested financial interest. As to the ethics of the KulaBrands concept, real crowdfunding sees initiatives thrive or fail depending on public interest.
The general concept is poor ideas don’t get funded. Through KulaBrands, it’s completely feasible that a poor idea will get funded, based on expected ROIs rather than the qualities of the product or service itself. Anyway, getting back to KulaBrands’ virtual share sale; in September 2017 the company revealed it was planning to undertake a $40,000 IPO.
As of January 2022, that hasn’t materialized. KulaBrands never went public. In early 2019 KulaBrands released HealX Nutrition, a standalone MLM CBD offering. HealX Nutrition’s website is now unavailable and the company is “not processing orders”.
As highlighted, in 2016 KulaBrands generated $33,981 in losses. Looking at KulaBrands’ latest Annual report, issued April 2020 for the year 2019, the company generated $330,746 in losses. That’s up from $51,374 in losses in 2018. And KulaBrands also has an additional half a million in “long term debt”.
Long story short, KulaBrands has stayed unprofitable and continues to incur losses. Alexa traffic statistics suggest that, throughout most of 2021, KulaBrands’ website traffic was non-existent: KulaBrands last official Facebook post was a Christmas profile image change on December 9th. The post preceding to that is dated April 26th, 2021.
Anyone dumb enough to invest in KulaBrands back in 2017 want to weigh in? Or is that $97,279, along with whatever else individuals threw into KulaBrands, quietly lost?