DJM - Statement of Affairs released

[John M Upton]

Is the figure of £50k owed that Dave has seemingly plucked out of thin air the sum total of Crowdfunding Deposits he was still expecting to receive?  If so it could be that he see's those who still have second/third/fourth deposits on CF projects as debtors and could in theory chase them for the money!

 

Sounds crazy I know but then this whole thing seems to be a balancing house of cards act that I am beggining to wonder how it managed to last for so long.

Edited June 25, 2019 by John M Upton

[Paddy]

7 hours ago, Edwardian said:

 

- Was the crowdfunding undertaken via the Funding Circle?  I would have thought not, as I had understood the FC to be a source of private business loans, as opposed to banks who have more or less given up making money available to any small business who might actually need a loan.  This quote from the Funding Circle website prompted some hollow laughter: "Rigorous credit assessment so you lend to creditworthy businesses and loans perform in line with our expectations".  Yeah, right.

 

 

 

Hi Edwardian,

 

Just to add a little bit of balance to this.  I have been a significant investor in FC for many years.  Whilst I admit it is not for the faint hearted and you will lose money on certain loans I can assure you that I have to date exceeded FC stated returns.  This is not me saying everyone should dive in and that FC are great, just giving some insight from an investor.  It will be intersting to see if I will get hit by DJM's default.

 

Paddy

 

 

 

[Edwardian]

1 minute ago, Paddy said:

 

Hi Edwardian,

 

Just to add a little bit of balance to this.  I have been a significant investor in FC for many years.  Whilst I admit it is not for the faint hearted and you will lose money on certain loans I can assure you that I have to date exceeded FC stated returns.  This is not me saying everyone should dive in and that FC are great, just giving some insight from an investor.  It will be intersting to see if I will get hit by DJM's default.

 

Paddy

 

 

 

 

Fair enough. It's a useful thing and I'm sure works out nine times out of ten.  This example made me question the due diligence process, however!

[njee20]

I know their CRO, I'll let him know that you're out ;-)

[Trains4U]

6 minutes ago, John M Upton said:

Is the figure of £50k owed that Dave has seemingly plucked out of thin air the sum total of Crowdfunding Deposits he was still expecting to receive?  If so it could be that he see's those who still have second/third/fourth deposits on CF projects as debtors and could in theory chase them for the money!

 

Sounds crazy I know but then this whole thing seems to be a balancing house of cards act that I am beggining to wonder how it managed to last for so long.

 

No, that would be the Director's loan account.   The amounts that the Director has loaned to the company.  this could be real money (Actual cash or mortgage - though most mortgage lenders won't allow loans for business purposes) or deferred earnings - where the loss is time, rather than money.

Edited June 25, 2019 by Trains4U

[jjb1970]

The statement of affairs makes interesting reading but I'm not sure we have learnt anything unexpected and certainly the appearance of the owner of a failed business as one of the principal creditors is entirely consistent with many other similar businesses I've seen crash like this. I still think the question of where did all the money go is germane and that the soa doesn't leave us any the wiser on that. How much money did Dave Jones take out of the business? He did a good job of selling people a story of making things at zero profit, a company can quite accurately tell customers it will not make a profit on a project whilst at the same time the proprietor draws a salary and charges handsome fees so as to make a tidy profit out of it all personally. To me it all feels like DJM ended up as a form of ponzi scheme.

[pheaton]

1 hour ago, adb968008 said:

You only had to look at last years accounts to see a hole...

 

fixed assets £65k

(CA) Current assets £79k

—-

Creditors 1 year £65k

—

This mean CA-Creditors £14k...left

And..

creditors due +1 yr £22k

 

Now Takeaway the tooling fixed assets to £0 your way in the red...

 

I was expecting that Julius cesar  announcement moment in May to be the announcement that the old toolings had been sold and were about to appear under a different brand.

 

What I don't see is enough money to fund anything like an APTs development... a tooling train at least 5 toolings and a power car.. £600k say ?, in part installments of £250 sold at £1000 to 1000 people (£1mn project)... then one would expect something like £250k in cash floating about from the first stage...

 

i’m left wondering if it was all a bit of a dream and pre-orders weren't anything like 1000, though I recall this number being suggested in here somewhere at the time, which sounded plausible.

 

Ahh but remember the APT hadnt got to that point yet...it was purely at the CAD stage, at which the project was viable, however had it gone beyond the cad stage then i don't doubt there would have been an issue. But the next stage would have been covered by a new round of crowdfunding.

 

i recall certain members had figures of who had signed up for what....only from that can you "estimate" what cash was put in from crowd-funders, you can deduce a minimum amount but in reality the figures might be much higher.

[Legend]

12 minutes ago, John M Upton said:

Is the figure of £50k owed that Dave has seemingly plucked out of thin air the sum total of Crowdfunding Deposits he was still expecting to receive?  If so it could be that he see's those who still have second/third/fourth deposits on CF projects as debtors and could in theory chase them for the money!

 

Sounds crazy I know but then this whole thing seems to be a balancing house of cards act that I am beggining to wonder how it managed to last for so long.

 

The £50k Directors Loan is likely the amount of cash Dave Jones gave to the company . Although he was a shareholder , I think one  share , he will have funded the business by this loan.

 

Given that there is no listing of Crowdfunders at all, I am now beginning to wonder if the whole crowdfunding thing was kept outside of this company . It would be interesting if anyone knows if they were contracting with DJModels limited or sent the money to David Jones esquire.

 

Really we are no further forward on where all the deposits went and how many there were

[Paddy]

12 minutes ago, Edwardian said:

 

Fair enough. It's a useful thing and I'm sure works out nine times out of ten.  This example made me question the due diligence process, however!

 

Not sure I would say 9 times out of 10.   They definately lend to some "unusual" businesses but it is all about diversification.  One model company I did get hit by was Golden Age Models (FC customer).  In my experience, returns from FC are around the 5% mark (cautious investor mode), with bad debt at 1.5%.  FC's recovery teams seem to get back about 30% of your losses over time.

 

Hope this helps.

 

Paddy

 

[dave_7820]

7 minutes ago, Legend said:

Given that there is no listing of Crowdfunders at all, I am now beginning to wonder if the whole crowdfunding thing was kept outside of this company . It would be interesting if anyone knows if they were contracting with DJModels limited or sent the money to David Jones esquire.

 

For what it's worth, the receipt email I received for the King order has, as the subject:

 

Your DJ Models Ltd order receipt from August 26, 2018

 

which makes it look like the contract was with the company.

[DavidH]

7 minutes ago, Legend said:

The £50k Directors Loan is likely the amount of cash Dave Jones gave to the company . Although he was a shareholder , I think one  share , he will have funded the business by this loan.

 

That's what I think too - although when it was loaned, and whether it was left out of early accounts is a moot point that only someone like the liquidator will be able to ascertain.

 

9 minutes ago, Legend said:

Given that there is no listing of Crowdfunders at all, I am now beginning to wonder if the whole crowdfunding thing was kept outside of this company . It would be interesting if anyone knows if they were contracting with DJModels limited or sent the money to David Jones esquire. 

I don't recall this point ever being satisfactorily answered even when Dave was still willing to answer questions here.

[The Stationmaster]

1 minute ago, pheaton said:

Ahh but remember the APT hadnt got to that point yet...it was purely at the CAD stage, at which the project was viable, however had it gone beyond the cad stage then i don't doubt there would have been an issue. But the next stage would have been covered by a new round of crowdfunding.

 

i recall certain members had figures of who had signed up for what....only from that can you "estimate" what cash was put in from crowd-funders, you can deduce a minimum amount but in reality the figures might be much higher.

While we don't know the real numbers I have very carefully gone through the APT thread and if the required number of crowdfunders was the same as for the N gauge version it would have been 400 people and in April 2018 DJ posted that it was past the break even point and there were sufficient orders for a 10% contingency.  That to me means 400 +40 (as 10% contingency) = a total of 440 orders.  Even later into 2018 he was still confusingly talking about crowdfunding - now with dire warnings about possibly losing your money - and orders and pre-orders . in other words it remained a jumble.

 

What we don't know is  - 

a. If the 400 crowdfunders figure translates directly and equivalently from N gauge to 00 gauge, and

b. Whatever the real number required happened to be just how many people had actually paid their deposit (and note it seems to have first been referred to consistently as a 'deposit' and not as an initial crowdfunding payment).

c.  So the amount actually paid could vary between £110,000 (i.e. 440 deposits were paid) and a few thousand £s.  But even if, for example. only 100 people had paid that would still have meant £25,000 had been paid.

 

The answer would presumably lie in 'the list' (of 'crowdfunders'/payers of deposits etc) Colin has referred to on several occasions and which the liquidators are now seeking.  The next $64,000 questions are -

1 Does it actually, and did it ever, exist, and

2. Will the liquidators ever receive it (or will it be another tale of 'it was all in emails and they have been lost').

 

Form your own conclusions but it could be very interesting if it is recovered and can be compared with the names of RMweb members who put in an order.

[adb968008]

1 hour ago, pheaton said:

Ahh but remember the APT hadnt got to that point yet...it was purely at the CAD stage, at which the project was viable, however had it gone beyond the cad stage then i don't doubt there would have been an issue. But the next stage would have been covered by a new round of crowdfunding.

 

i recall certain members had figures of who had signed up for what....only from that can you "estimate" what cash was put in from crowd-funders, you can deduce a minimum amount but in reality the figures might be much higher.

 

Yes but first deposit was £250...

 

if it helps here is a timeline.. (all below are derived from DJs own statements in the APT thread, and companies house).

 

22/3/2018 was the APT go launch date..invoices sent, payments start rolling in.

02/06/2018 the scanning party

03/07/2018.. the compulsory strike off event..

03- 28/07/2018.. the infamous paypal freeze

24/07/2018 those infamous overdue accounts

28/07/2018 those refunds started to be recieved from the APT..

31/07/2018.. the date of the accounts... (fixed assets £68k, current assets £79k (-£65k = £14k).

 

so the APT £250 deposits shouldnt show in 2018’s accounts....

 

but...

 

28/07/2018 DJ inducates “some” wont get refunds, as there money was used to pay for the scanning on June 2nd...

 

So the scan should show as a fixed asset ? In the £68k ?

 

However..

 

28/09/2018 DJ indicates 168 deposits paid (on the new click safe system).

So 168 * £250 = c£42000 received (he also indicated 300 to break even).

About this time DJ broke off comms on rmweb and went underground.

 

now £79k is shown in current assets from July 31st 2018.. which is higher than the Liquidators accounts show £15k deposit, £4k in cash, Scans / plans for £33k if they are considered current, not fixed ?.totals  (£52k, or just £19k without).

 

debts are £103k, ignoring DJs £50k, thats £53k... (previously Julys 2018 accounts totally £82k)... so £30k has been reduced from the debts... ( has the debt of £30k been turned into the scan “asset” for £30k ?, or is the debt climbed £20k higher since July 2018 if you add back in DJs £50k to this number ?).

 

but cf APT money is still not obvious yet here..

 

That c£42000 I would have thought should be in the liquidators funds for today.

 

Parallel to this was the n gauge king. (Class 17 had been refunded).

 

i fear its going to look much worse in the next Statement of affairs, if the cf money is recorded.

Edited June 25, 2019 by adb968008

[Markwj]

Not everyone paid £250 for an apt my deposit was £186 ish as I wanted the 7 car version.

 

It would appear we have been lied to for sometime and strung along while the business struggled. The promises of tooling round the corner was just vapourware.

 

I kind of get he took money from other parts of the hobby that 186 and the deposits for 2 Class 92's could have been spent elsewhere giving money to shops and manufacturers who are actually producing something.

He has taken in my view a substantial amount of money out of the hobby!

[John M Upton]

I have just ordered a couple of the rapidly decreasing stock of Mermaids from Hattons. I think there are only two or three of two variations left now so if anyone still wants one of the exquisite little wagons, get in quick.  I don't there will ever be any more made.

[melmoth]

18 minutes ago, Markwj said:

 

I kind of get he took money from other parts of the hobby that 186 and the deposits for 2 Class 92's could have been spent elsewhere giving money to shops and manufacturers who are actually producing something.

He has taken in my view a substantial amount of money out of the hobby!

 

This is precisely what Widnes Model Centre has been saying up thread and elsewhere. You can't spend the same money twice.

 

[Fenman]

10 minutes ago, melmoth said:

 

This is precisely what Widnes Model Centre has been saying up thread and elsewhere. You can't spend the same money twice.

 

 

Yes, but equally you shouldn't assume that every modeller just has a fixed pot of cash to spend on this particular hobby. Some will. Some won't. I don't know the proportions, but it certainly isn't as simple as saying "well, if Fenman spent that £X on APT vapourware then that's money he didn't spend on the Hornbach XYZ, which is lost to the hobby".

 

Some of us are in the fortunate position of being able to afford both (and that is not a dig at those who are not in that position, or me boasting - just trying to prevent an already distasteful situation being portrayed as even darker than it actually is).

 

I went into this with my eyes open, as I assume did everyone else, and I mentally wrote off the deposit cash as soon as I had handed it over: I figured if I got a nice model at the end of it all then the gamble (sic) will have paid off. It did not. No use crying over it now. Let the liquidators get on with their job, and let's see what comes out in the wash.

 

Paul

[Phil Parker]

10 minutes ago, Fenman said:

Yes, but equally you shouldn't assume that every modeller just has a fixed pot of cash to spend on this particular hobby. Some will. Some won't. I don't know the proportions, but it certainly isn't as simple as saying "well, if Fenman spent that £X on APT vapourware then that's money he didn't spend on the Hornbach XYZ, which is lost to the hobby".

 

I'd expect the APT to be the sort of lollypop model that would cause people to stretch their budget as it's likely to be a once in a lifetime opportunity to get one. If an APT isn't on the horizon, you might be more tempted to spend the cash on wild women and beer rather than more model railways.

 

With shorter runs and a "buy it or miss out" mentality, I'm not sure the idea that there is a specific size cake that can be divided up still holds. If the right product (a Deltic perhaps) appears, then the cake might get a bit bigger that year. If there is nothing that grabs modellers, then the cake will be smaller.

[melmoth]

3 minutes ago, Phil Parker said:

 

I'd expect the APT to be the sort of lollypop model that would cause people to stretch their budget as it's likely to be a once in a lifetime opportunity to get one. 

 

Yes, but conversely, if someone stretches their budget for a "once in a lifetime" model then they are perhaps likely to have to cut back on other hobby related expenditure in order to afford it, and it's that cash that is lost. All hypothetical, I know.

 

3 minutes ago, Phil Parker said:

you might be more tempted to spend the cash on wild women and beer rather than more model railways...

 

 

...yep, and the rest I just wasted.

[truffy]

9 minutes ago, Phil Parker said:

you might be more tempted to spend the cash on wild women and beer rather than more model railways.

 

For me, the money that's left over after wild women and beer is what's available for model railways.

 

9 minutes ago, Phil Parker said:

I'm not sure the idea that there is a specific size cake that can be divided up still holds. If the right product (a Deltic perhaps) appears, then the cake might get a bit bigger that year. If there is nothing that grabs modellers, then the cake will be smaller.

 

There you go, you and your cake again!

[tomparryharry]

It sounds a bit disturbing to think that some modellers have taken that 'once in a lifetime' moment, only find the end result is missing. My deepest respect goes to these people. My only moan has been that a keenly awaited (but unpaid) model hasn't arrived. In that case, some have been twice bitten. Once, with the initial expression & order, the second to find the intent has not appeared.

 

sad days indeed.

 

Ian.

[Phil Parker]

11 minutes ago, melmoth said:

Yes, but conversely, if someone stretches their budget for a "once in a lifetime" model then they are perhaps likely to have to cut back on other hobby related expenditure in order to afford it, and it's that cash that is lost. All hypothetical, I know.

 

In the garden railway world, there are many modellers who promise they will only buy a single steam locomotive and after a few years, own several.  I guess they believe in reincarnation and are bagging those "once in a lifetime" models for all their lives. Or perhaps they are cats...

[Hilux5972]

9 hours ago, truffy said:

she used to be a director at DJM (15.05.2017-20.03.2018)

Yes I seen that. That’s why I asked. Haven’t seen her mentioned before that’s all. 

[truffy]

1 minute ago, Hilux5972 said:

Yes I seen that. That’s why I asked. Haven’t seen her mentioned before that’s all. 

She was mentioned in passing in the other thread. But, given her relatively brief formal association, possibly related to the fact that her domicile is the previous registered address for DJM, her actual involvement in DJM was probably superficial.

[Revolution Ben]

9 hours ago, Phil Parker said:

 

I've spoken to Revolution several times. As the (now) main crowdfunding company in the industry, they would be more affected than most - but claim it has made no difference to their business.

 

Hi all,

 

Thanks Phil - just to add a little more detail and context..

 

It's fair to say that so far we have noticed no significant change, but it is early days.  

 

And the caveat is that on a day to day basis we don't really see consistent orders coming in.  They tend to come in surges when we open up the order book for a new product, or have an order deadline coming up.

 

We'll get a stronger feel for whether this has had any appreciable impact on our supporters from the response to the Mk5 coaches in N, which have just opened for ordering, and the IPA car carriers in 00 which will be opening for orders soon.

 

Naturally we have sympathy to anyone who may have lost money with the various DJM projects, but as far as Revolution goes we would point to a track record of transparency and delivery.

 

Crowdfunding certainly *can* work, especially for niche projects, the important thing is how it's managed.

 

cheers

 

Ben A.

Edited June 25, 2019 by Ben A