Sad

When I went to Vietnam, I saw some awesome skates:

Just found out the company went bust.

Freeline skates were developed in 2003 in San Francisco, California when Ryan Farrelly was attempting to design a better way for downhill skating. His prototype for the skates was a row of four wheels in the center of a wooden board. After test runs and adaptations, Farrelly realized he could simply stand on each set of wheels and not bother with a board. The skates combine elements of both skateboarding and in-line skating, and can be ridden on flat land as well as downhill or uphill. Out of this idea, Freeline skates were born.[1] In 2012 the founder of Freeline Sports Inc., Ryan Farrelly left the company. [2] By the end of 2015 rumors of Freeline Sports Inc. closure began circulating on internet forums[3] and a group of former team members left to form a new skate company to continue were Freeline left off (JMKRide).[4] There are also other companies that exist to support the skating community. Professional skaters in Japan call the sport free skates and in Taiwan prefer drift skates after Freeline skates departure from the scene.[5][6] (see also Street Skurfing)

From the founder’s LinkedIn:

Two skates that go sideways. Built for Downhill Speed, self-propulsion, tricks, long distance, and portability. Freeline skates were developed in 2003 in San Francisco, California when Ryan Farrelly was attempting to design a better way for downhill skating. His prototype for the skates was a row of four wheels in the center of a wooden board. After test runs and adaptations, Farrelly realized he could simply stand on each set of wheels and not bother with a board. Through years of hard work, dedication and support from wonderful early round investors, the company became a global success. The company died a painful death for being too desirable to the wrong group of investment bankers who gained control after a series of lawsuits only to tank it in an attempt to buy the assets out of bankruptcy.

http://www.prweb.com/releases/2010/04/prweb3930174.htm

From the founder’s FB:

So, a lot of people don’t know that I haven’t worked for Freeline in a few years. The truth is, my team fought a long hard battle for the old investors who allowed the company to exist in the first place. In the end, Freeline Sports, Inc. didn’t fail for any other reason than being too desirable to the wrong group of new investors. It’s a long story, read the book when I finish it. The worst part of it all, besides having everything you’ve worked on for years yanked out from underneath you, is not being able to communicate with the community on the matter. You guys did more than you will ever realize to help move the company forward. I truly value all the friendships and interactions that Freeline has given me over the years. The overall experience (besides how it ended) was the best thing that could have ever happened to me. I hope you all can forgive me for keeping you in the dark on the mad drama behind the company and needing to disappear for a while to work on my new career. I have been too mad to talk about it for the past 3 years, but am tired of feeling like I have to hide anything. We had such a good thing going sucks they had to be so greedy. Truth be told, the original mission statement for the company was “Bringing People Together,” and based on the beautiful people I have met through the years including my wife, I would have to say we succeeded. Sorry for disappearing for so long, but I feel that starting to talk about it is the first step in the healing process. I hope you all have enjoyed the good times and good people you have met through Freeline and I wish you all the best. – Ryan Farrelly

Wow everybody, I am overwhelmed with all the comments and love from my last post, getting a little emotional sitting here at the University between classes. Feeling really blessed to have such amazing people in my life. I plan on doing big things in this life and I hope you all will be around to enjoy them with me. With regard to the company, it’s a story that really deserves to be a feature film (if anybody knows anybody) about how it came to be. How the company evolved to raise money at a $30 million dollar company evaluation to them wanting to keep me and wipe out all the old investors, including my Dad. In the end, everyone lost his or her money. Hundreds of thousands of dollar, millions of dollars, and all the foundational work it took to build a large corporation. Everybody lost. This included investors, friends, coworkers, distributors, my family, and myself. We all sacrificed a lot and experienced a large and painful loss. What these people did to the company was nothing short of criminal. From bs lawsuits to gain control then bankrupting the company just to try to buy the assets back out of bankruptcy. Kyoki is not the only one that lost out. Many people I care about suffered severe financial losses and I carry that with me daily. I’ve just been trying to pick up the pieces and move on, remembering the good times and learning from the rest. Lot’s to still be thankful for despite what has been lost.

Looks like “Chatand” purchased assets out of a banruptcy:

NOTE 3: FREELINE SPORTS INC ACQUISITION On May 8, 2014, the Company entered into an Asset Purchase Agreement (the “Freeline Purchase Agreement”) with Leonard S. Ackerman, as Chapter 7 trustee (the “Trustee”) in Bankruptcy Case Number 13-06272-MM7 (the “Bankruptcy Case”) to enter a bid in bankruptcy to purchase substantially all of the assets (the “Freeline Assets”) of Freeline Sports, Inc. (“Freeline”) subject to an order of relief under Chapter 7 of Title 11 of the United States Bankruptcy Code (the “Freeline Acquisition”). The purchase of the Freeline Assets by the Company was contingent upon the Company’s becoming the successful bidder (the “Stalking Horse Bid”) of a bankruptcy auction (the “Bankruptcy Auction”). Pursuant to the terms of the Freeline Purchase Agreement, the Company was required to pay the Trustee a cash amount of $30,000 as a deposit of the Purchase Price (as defined below). The full purchase price (the “Purchase Price”) of the Freeline Assets was $250,000, subject to adjustment if the Company submits an overbid at the Bankruptcy Auction. In conjunction with the Freeline Acquisition, the Company also purchased the Freeline Notes (as defined below, and as described further in Note 6) from a third party holder of the Freeline Notes in exchange for 5,000,000 shares of the Company’s common stock. On June 11, 2014, the United States Bankruptcy Court in the Southern District of California granted a Motion for Order Approving Settlement Agreement in the Bankruptcy Case, pursuant to which, among other things, the Company was successful in its Stalking Horse Bid for the Freeline Assets. At June 30, 2014, the Company’s investment in the Freeline Assets and the Freeline Notes consisted of a cash deposit of $30,000, an amount due the Trustee in the Bankruptcy Case of $220,000 and 5,000,000 shares of the Company’s common stock, par value $0.00001, valued at $1,350,000, the closing price of the stock on the date the transaction was completed (Note 6). The acquisition was completed on July 11, 2014 (Note 9). The Company will engage an appraiser to value the assets acquired, at which time the value will be assigned to the specific assets. The appraisal will be completed before December 31, 2014.

http://www.otcmarkets.com/edgar/GetFilingPdf?FilingID=10146331

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=10108570-1135-23238&type=sect&TabIndex=2&companyid=863093&ppu=%252fdefault.aspx%253fcik%253d1529133

Richard Rosenblum seems to be a key player?

Richard Rosenblum has been a principal of Harborview Advisors, LLC, the investment manager for Harborview Master Fund, L.P. and Harborview Value Master Fund, L.P., since 2004. Mr. Rosenblum was previously a managing director of investment banking for vFinance, Inc., a middle market investment banking and brokerage organization. Since November 2012, Mr. Rosenblum has been a director of ChatAND Inc. From February 2009 to January 2012, Mr. Rosenblum served as a director of Celsia Technologies, Inc. From September 2006 to April 2010, Mr. Rosenblum was a director of Boxwoods, Inc., which changed its name to Duke Mining Company, Inc. in March 2009. From September 2006 to May 2007, Mr. Rosenblum was a director of Mill Basin Technologies, Ltd. From November 2006 to January 2008, Mr. Rosenblum was a director of Marine Park Holdings, Inc. From August 2009 to September 2009, Mr. Rosenblum was a director of HG Partners, Inc. Mr. Rosenblum graduated from the State University of New York at Buffalo in 1981, summa cum laude, with a degree in finance and accounting.

Sounds like one of those people who is more interested in juggling business rules than actually building a productive enterprise.

Also, this dude: https://www.crunchbase.com/person/david-stefansky#/entity

More about Chatand:

2. GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As of June 30, 2015, the Company had cash of $14,035 and working capital deficit (current liabilities exceeding current assets) of $640,397. During the six months ended June 30, 2015, the Company used net cash in operating activities of $68,917. The Company has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

During this Three (3) month period, the Company received $18,532 from the Freeline bankruptcy case, which was sufficient cash to fund its operating requirements through July of 2015.

The Company’s primary source of operating funds since inception has been cash proceeds from private placements of common stock and convertible debentures. The Company intends to raise additional capital through private issuances of debt and equity instruments, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully execute on its business plan or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

https://biz.yahoo.com/e/150820/chaa10-q.html

Okay, so it looks like this crappy company bought Freeline’s assets, but then sucks at developing the business… which I guess isn’t surprising considering they are doing a bunch of different businesses (biomedical, online assistance) that they have no training in.

Recent Business Developments

In 2014, we acquired substantially all the assets of Freeline Sports, Inc., an inactive California company in Chapter 7 bankruptcy proceeds for cash payment of $250,000 and 5,000,000 shares of the our common stock, valued in aggregate of $1,350,000. The assets acquired were primarily patents, copyrights and trademarks relating to sports equipment. Specifically, we acquired patents 7,059,613, 8,308,171 and D567,318 for supporting a user’s foot with a personal transportation device.

We do not currently have plans to develop these assets or market any products related to these assets. However, we are currently pursuing financing in order to develop these acquired assets

Although our current plans continue to focus on our online assistance, engagement and conversion solutions and the potential development of the assets acquired from Freeline Sports, Inc., we also may consider additional or alternative opportunities, including a change in the primary focus of our efforts. For example, we could determine to acquire, through a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or similar business combination, one or more operating businesses, or control of such operating businesses through contractual arrangements, or additional assets. We currently do not have any arrangement, agreement or understanding with respect to any such transaction and there can be no assurance that we will evaluate or conclude one.

Freeline Distribution selling on Amazon is based out of Danville, from a house where this woman lives:

https://www.linkedin.com/in/lisa-m-negele-48867b5

who was the founding CEO of Freeline?  An attempt to contact her failed

Delivery to the following recipient failed permanently:

     lnegele@nri-commercial.com

http://www.amazon.com/Lisa-Marie-Negele/e/B00JJDVZVM

She also writes short kindle things on Amazon?

http://www.getfilings.com/sec-filings/160513/chatAND-Inc_10-Q/

Basically, Chatand is completely brokeass but still controls the IP.

Management’s Analysis of Business

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which are prepared in conformity with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments and assumptions that management believes are reasonable based upon the information available. We base these estimates on our historical experience, future expectations and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments that may not be readily apparent from other sources. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. These estimates and assumptions relate to estimates of the carrying amount of intangibles, stock based-compensation, valuation allowances for deferred income taxes, accruals and other factors. We evaluate these estimates on an ongoing basis. Actual results could differ from those estimates under different assumptions or conditions, and any differences could be material.

We have not generated any revenues to date and had cash balances of $46,360 and $101,247 at March 31, 2016 and December 31, 2015, respectively.

ChatAND headquarters are at 244 5th Avenue, Suite C68, New York, NY 10001. Our telephone number is 917-818-2280.

Chat& is a an up and coming sport action company that expects to fully develop and place into service its investment asset with the relaunch of the Freeline Sports trademark and patented in-line skating technology.

The Company is considered a pre-development company because it has not generated any revenue, has limited resources and has not established operations to generate sufficient capital to complete its business plan.

Recent Business Developments

In 2014, we acquired substantially all the assets of Freeline Sports, Inc., an inactive California company in Chapter 7 bankruptcy proceeds for cash payment of $250,000 and 5,000,000 shares of the our common stock, valued in aggregate of $1,350,000. The assets acquired were primarily patents, copyrights and trademarks relating to sports equipment. Specifically, we acquired patents 7,059,613, 8,308,171 and Des567,318 for supporting a user’s foot with a personal transportation device.

Our current plans and focus is the development of the assets acquired from Freeline Sports, Inc., we also may consider additional or alternative opportunities, including a change in the primary focus of our efforts. For example, we could determine to acquire, through a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or similar business combination, one or more operating businesses, or control of such operating businesses through contractual arrangements, or additional assets. We currently do not have any arrangement, agreement or understanding with respect to any such transaction and there can be no assurance that we will evaluate or conclude one.

3

 

Results of Operations

Three months ended March 31, 2016 compared to three months ended March 31, 2015

Following is a summary of expenses for the three months ended March 31, 2016 and 2015.

2016 2015
General and administrative expense $ 67,446 $ 122,201
Asset impairment 749
$ 67,446 $ 122,950

General and administrative expenses are summarized as follows:

2016 2015
Professional fees $ 27,897 $ 110,519
Reseller fees
Option expense
Consultant 36,075 7,500
Insurance
Other 3,474 4,182
$ 67,446 $ 122,201

General and administrative expense decreased by $54,755 for the three months ended March 31, 2016, as compared to the three months ended March 31, 2015. This increase is primarily due to a decrease in professional fees of $82,622 and an increase in Consulting of $28,575.

These costs are expected to increase in the future if additional funding becomes available and additional employees are hired. The Company has had reduced funding since July 2012, resulting in payroll not being paid since July 2012 and a reduction in other costs until funding becomes available.

Other income (expense) consists of the following for the three months ended March 31, 2016 and 2015.

2016 2015
Interest expense (31,453 ) (741 )
Gain (loss) on change in fair value of derivative liability (7,022 ) 15,462
$ (38,475 ) $ 14,721

Interest expense for the three months ended March 31, 2016 is primarily an accrual of the interest on certain accounts payable, and notes payable. Interest expense in 2015 includes interest on certain accounts payable.

Warrant liability expense was calculated using the Black Scholes valuation method as described in Note 5 to the financial statements.

Liquidity and Capital Resources and Going Concern

At March 31, 2016 and December 31, 2015, the Company had current assets of $46,360 and $101,427; current liabilities of $463,976 and $442,122; and a working capital deficit of $417,616 and $340,695, respectively.

4

We have not generated any revenues to date and have suspended active development activities. The Company has not had any cash available other than nominal loans from shareholders and has discontinued accruing payroll. The Company’s continuing existence depends upon its ability to find alternative sources of financing.

At March 31, 2016 and December 31, 2015, we had no liquidity. The Company will require additional financing before it can implement its business plan.

We presently do not have any available credit, bank financing or other external sources of liquidity. Due to our historical operating losses, our operations have not been a source of liquidity. We may seek additional capital in order to develop operations and become profitable. In order to obtain capital, we may need to sell additional shares of common or preferred stock or borrow funds from private lenders pursuant to instruments, which are junior to our outstanding secured debt instruments. There can be no assurance that we will be successful in obtaining additional funding.

If the above events do not occur or the Company is unable to implement its business plan, substantial doubt about the Company’s ability to continue as a going concern exists.

https://www.linkedin.com/in/victoria-d-rudman-8b66958

CFO of Chatand.  And apparently she has a weed business:

Victoria Rudman is the CFO and corporate secretary of California-based Kalytera Therapeutics, a pharmaceutical company developing non-psychoactive cannabis medicines.

The current CEO of Chatand filed for personal bankruptcy in 2005:

Mr. Michael Lebor is a Founder chatAND, Inc. Mr. Lebor has been Chief Executive officer and Secretary of chatAND, Inc. Many 14, 2010. Mr. Lebor served as Vice President for Marketing and Sales of M. Fried Store Fixtures, Inc. From 1996 to 2003, Mr. Lebor served as Chief Executive Officer of flower.com , Inc. In connection therewith, Mr. Lebor personally guaranteed certain obligations. When flower.com, Inc. was unable to secure financing as a result of adverse securities market conditions, Mr. Lebor, in 2005 filed a personal bankruptcy petition in the U.S. District Court for the Eastern District of New York which was discharged. H serves as the Chairman of chatAND, Inc. He had been a Director of chatAND, Inc. until November 20th 2012. Mr. Lebor holds a Bachelor’s Degree in History from Queens College of the City University of New York.

Early company history:

Founder of Freeline Skates offers another way to roll
By Chris Woodyard, USA TODAY
COSTA MESA, Calif. — In a neighborhood skateboard park, Ryan Farrelly leads a line of cohorts zigzagging across the sides of a concrete half-pipe, performing jumps as they zip around the bowl.
Farrelly is an accomplished skateboarder, but that’s not what’s under his feet today. He powers through the turns while standing astride his invention — small square skateboards with two wheels apiece, each smaller than the rider’s foot, and ridden sideways.

Standing on the skates, he moves each foot independently and leans into turns. He can slide to a stop like an ice skater. Yet, he can perform tricks such as flipping up one skate into his hands or taking one foot off and reconnecting a few feet later.

Farrelly is founder of Freeline Sports, headquartered nearby in Irvine, Calif. The company is striving to turn Farrelly’s invention into a phenomenon. The company’s ad tagline: “The next ride.”

Breaking through hasn’t been easy. Freeline sells skates online and in only about 90 stores across the country, more than half in a single sporting-goods chain. The company won’t talk about projected sales this year, but says it’s had about $2 million in revenue since 2006. Freeline says it’s sold about 50,000 pairs of skates with retail prices as high as $150 a pair. That’s not bad, but it’s a small dent in a market that’s put millions of skateboards on the nation’s sidewalks.

The skateboarding community is yet to fully embrace the idea. Christian Senrud, associate editor of Skateboarder magazine, says Freelines are more akin to in-line skates, which are viewed as “skateboarding’s retarded cousin.” He says Farrelly’s invention strikes him as being in the kid-stuff category such as Razor Scooters and Heelys, children’s sneakers with tiny wheels built into the heels.

Seeking a spot in the market

With some new investment, CEO Renee Tuzee says she’s developing a clothing line and a training line. The company is also hiring, going from about seven employees to 12.

For Farrelly, 32, creating Freeline was a natural evolution. “I love to tinker,” he says as he hovers over a work table covered in wheels, tools, nuts and bolts. He’s always loved riding boards. When he was 12, his mother wouldn’t buy him a snowboard, he says, so he made one from an old skateboard.

Farrelly’s creation happened the same way. After attending college in San Diego, he says, he was living in San Francisco about eight years ago, “living this ski-bum mentality.” One day, while making a new skateboard, it hit him. What if he could skate on a single pair of wheels under each foot?

He created a crude version and tried it out on a steep section of Santiago Street. He says he saw the major advantage immediately: The skates gave him the ability to lean into turns in a way that no skateboard ever could. Not only did Farrelly have a blast trying it out — “I was having the time of my life” — but motorists stopped at either end of the street to watch him, and he drew a crowd. “It hit me that this is so fun, this product has the potential to be (for) everyone,” he says. “Every one of my friends was demanding that I make them a set.”

By 2005, he says, he became serious about developing Freeline into a business. He raised some money for patents and hired an engineer to develop a commercially viable version.

Along the way, he attracted a backer. Dennis Chateauneuf, a former Sun Microsystems executive, got to know Farrelly through his father and started investing in the project, $300,000 initially. “I invested in the entrepreneur. His business plan created a new action sport,” says Chateauneuf, now Freeline’s chairman.

Having moved to San Diego where he had gone to college, Farrelly put up a website describing the product to see what kind of interest he could spark. One day, a Japanese company called to place an order. He used the company’s letter of credit to have an extra 500 pairs made in addition to the initial order. Finally, he had product to sell.

Show what you have

Then as now, Farrelly says he promoted the product constantly by going to skate parks, giving demonstrations and teaching skaters how to use Freelines. He has an in-house pro, boarder Mattie Tyce, 23, who knows all the tricks. “I like how I can get around faster on these,” he said of his Freelines. He says fellow board riders react by saying “mostly, ‘Wow, you guys are crazy.’ ”

As viral videos spread on YouTube, chatter grew in the skating community, and online orders started coming. The brand gained a small, hard-core following. “We had crews of riders tattooing (Freeline) logos on themselves,” Farrelly says.

To give the growing business more expertise, Chateauneuf introduced Farrelly to Tuzee, who’s worked in marketing for scooter company Vespa and for Bombardier, on its personal watercraft and snowmobiles.

As CEO, Tuzee moved the business to Irvine to be closer to the heart of the action-sports industry and sought more accounts. It hasn’t been easy nursing the company through a deep recession.

After raising $1.8 million in 2008, the economy was sinking so fast that Chateauneuf said the team briefly considered giving the investment back before plunging ahead. To scrimp, Tuzee and Farrelly worked without pay. Even as recently as May, the company was running short of inventory.

VIDEO: Freeline Skates inventor Ryan Farrelly
Farrelly, who is used to living a spartan existence, sounds as if he’s gotten used to the roller coaster. “There were so many times the company was hanging by a microfiber,” he says.

Now, with the company on firmer financial ground, Tuzee says she focuses on trying to get Freeline skates into more stores and to expand its product line.

The biggest success to date is Sports Chalet, which has 55 stores in the West. CEO Craig Levra describes Freeline as “a fantastic company” and says his chain jumped right on board.

“They are not inexpensive,” Levra notes. Yet, he says, sales “actually do quite well.”

But getting skateboarders and roller skaters to give them a try is still a challenge. Freeline provides a video to retailers to play in their stores to show the skates in action. Levra says it helps spur sales, and adds, “If you think about any new sport or activity, it’s always a learning curve.”

Freeline skates are an “awesome” product, but require patience, says Jon Allen, who runs the J.W. Allen & Sons Children’s Provisions toy store in Park City, Utah. “They do well, but it’s one of those things (that require) a commitment to learn,” he says.

He says he sells 20 or 30 pairs a year and gets calls for them from other states.

Likewise, Karen Pfeiffer, manager of On The Beach in South Padre Island, Texas, said customers had a great time with Freeline skates when the store carried them a summer ago, but they did take some time to learn. “The kids had a blast on them,” she said, adding that she’d like to carry them again.

http://usatoday30.usatoday.com/money/companies/management/entre/2010-12-27-entrepreneur27_ST_N.htm

JMK trying to get off the ground:

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s