In what reads like a who’s who of the entrepreneurial and startup world, a suit has been filed against Chris Stoikos’ Coolbox LLC by fellow co-inventor / patent holder and LLC Member.
A lawsuit filed in Washington’s King County Superior Court, case number 18-2-10933-7 SEA, alleges that Coolbox has refused to produce financial statements and other company records as required by law, and seeks an order compelling the company to produce such records for inspection. On August 25, 2018, the court entered judgment against Coolbox, LLC, and ordered the company to produce the business records requested in addition to a monetary award.
According to the lawsuit, in early 2015 Chris Stoikos and Coolbox LLC raised an initial $370,000 with a crowdfunding campaign on Indiegogo.com. Coolbox then garnered an offer for a $500,000 line of credit from Lori Greiner when Stoikos appeared with Jason Neubauer, founder of the social app YouBetMe, on ABC’s Sharktank (Season 7, Ep. 23) one year later in 2016. The Indiegogo campaign was then re-opened for a second round of funding immediately following the Sharktank episode which brought the campaign total to $425,000.
In August of 2015 Chris Stoikos launched The Dollar Beard Club (http://www.dollarbeardclub.com) (now The Beard Club) a line of male grooming products, taint scrubs and beard growth vitamins that featured People Magazine’s “King of Instagram”Dan Bilzerian in addition to axe wielding hipsters in speedos and circus lions in their promotional videos which parody the original shtick of Dollar Shave Club’s Michael Dubin. While Coolbox campaign manager Alex Brown was promising delivery dates that were routinely being missed, in a 2016 interview for Entrepreneur, Stoikos stated that “Right now, growth (of Dollar Beard Club) is my number-one priority”.
The lawsuit alleges that Coolbox LLC later entered into a marketing agreement with Kevin Harrington from ABC’s original Sharktank series, but that Coolbox management failed to disclose the full terms of that agreement to all Coolbox LLC members.
Harrington has since launched a derivation of the Coolbox toolbox design, the Coolbox Cooler on Kickstarter in August of 2018, a rendition which sparks reminiscence of Ryan Grepper’s record breaking product, Coolest Cooler also funded on Kickstarter in 2014.
A letter from counsel attached to the formal complaint states that company records are requested to ensure that the interests of minority members are being protected, that funds and opportunities that rightfully belong to Coolbox LLC are not being misappropriated for the benefit of managers or third parties, and that Coolbox LLC is not misleading actual or potential customers, investors, business partners, or financial backers.
In the current climate of LA’s “fake it till you make it” culture and given that Dollar Beard Club became a million dollar viral brand in 2015 while Coolbox failed for years to deliver product, it’s not surprising that the company’s refusal to provide financial statements would generate suspicion from an equity owner.