Honeycomb Swindled by Partner and Selling Itself to Another Company
In an announcement made both on their support Discord server and Facebook Page, Honeycomb Aeronautical CEO Nicki Repenning provides a lengthy update on the state of the company, and alleges how he, and by extension, the entire customer base who had pre-ordered products were taken advantage of by Honeycomb’s parent company, and now ex-business partner, whom is yet to be named.
He starts out by apologizing for the extended delay in communication, saying that “I’m not trying to make any excuses or deny my responsibility for what happened,” and that he should have “acted sooner,” and he “[has] no one but myself to blame for that.”
Continuing, he starts off with the story on how Honeycomb was founded as a business idea in 2012, and he was going to use his experience with Saitek, and take advantage of the gap between low-end and very-high-end products, and provide high-quality products at a decent price point. In 2016, he found a partner to start Honeycomb with, who he was good friends with, and was head of a company that was selling various video game accessories already in the United States, an accomplishment that Repenning helped with. Repenniing had agreed that his partner would run the financial side of the business, as well as use the company and connections his partner had in the manufacturing industry in Asia based in Hong Kong to manage the manufacturing. Repenning was to provide the designs and his partner was able to convert those designs into something that could be mass produced. Additionally, they agreed that his partner’s companies would handle the distribution.
He alleges that during the time the Alpha Flight Controls were being developed, his partner kept pushing off finalizing their shareholder agreement, but when the company was finally established, Repeninng discovered that he had no shares or ownership in Honeycomb. After confronting his partner about this, his partner explained that this was a requirement for the loans. Repenning goes on to allege that to this day, no agreement has been signed.
During Honeycomb’s first two years of operation, Repenning was concerned mostly with product development, and did not suspect anything wrong. However, by mid-2022, Honeycomb and his partner’s company wasn’t doing so well, so he looked at the finances in more detail. Repenning alleges that, “every invoice and purchase order, one by one, I discovered that the service fees added to the factory cost (for the services provided in Hong Kong) were significantly higher than what we had agreed,” and “the sales prices on the invoices to my partner’s distribution companies were lower than agreed.” He confronted his partner about this, but the partner just passed it off as “just an accounting error” and it would be fixed.
Most shocking of all, he alleges that the money from Charlie Pedal pre-orders did not go to the manufacturing, and had “gone elsewhere.” He then flew to Hong Kong “to meet with the factory and my now soon-to-be ex-partner to find out what was really going on.” He was able to negotiate a deal between the manufacturer, his “soon to be ex-business partner,” and “where my partner and his companies would no longer handle sales and distribution and I would also handle the factory partner directly. As part of the agreement, I was committing to help the factory recover the outstanding invoices by paying a significant premium on the existing stock as well as on the Charlie production. In exchange, the factory agreed to manufacture the Charlie, despite the outstanding debt, but I had to pay for the injection tooling as well as a 50% deposit of the production cost upfront.”
Repenning elaborates that “since it is highly unlikely that I will receive the payments for the pre-orders from my ex-partner, I am currently working on several finance deals to be able to start production as soon as possible.”
He continues on with giving us an update on the state of Honeycomb currently, saying that its online storefront, run through Shopify, has been closed and is no longer accepting refunds, so the only way to get money back is through a bank or credit card company. According to Repenning, this is also the state of RMA’s, due to being controlled by his business partner, which wholly owns the Honeycomb company based in Hong Kong, they have been unable to ship return labels.
Repenning goes on to mention that “The one good news is that we have reached an agreement, that he will sell his assets in Honeycomb if I can find a new partner to buy him out,” and he is in talks with other potential buyers that will help continue the Honeycomb product lines.
He also writes a heartfelt thank you to his tech and support staff, despite being caught up in this situation and being without payment, “have stayed with me.”
To conclude his statement, he apologizes for the lack of communication, and thanks everyone for their patience.
You can read the full text of his update on Honeycomb’s Facebook page here.
Threshold will be following this story as it unfolds, so stay tuned!
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