The following report details the findings of my investigation of Toy Overlord, Inc (TOI), it’s doing business as alias of Megalopolis: City of Collectibles (MCOC) and sibling company Premium DNA Toys, LLC (PDT).
All information obtained in this report came from sources available to the public. Some content came from sources that required registration or payment for access, such as social media or government websites, but are not restricted or privileged information.
The intent of this report is to present objective facts about the nature of TOI and how it runs its business and seek for clarity between the relationship between TOI and PDT.
While I have been selective with which information I included from my investigation, I have been careful to avoid including opinions about the content presented, or the character of TOI and its representatives.
I do not have any financial incentives for this report. However, I am a one-time customer of MCOC, having placed a pre-order for a Premium DNA figure. The total value of that order is $43.78, which I paid on August 1st, 2020, and is expected to be fulfilled mid-2021.
This article is receiving more views than I anticipated, so I would like to invite anyone with feedback to reach out. If I made any factually incorrect statements, I want to rectify that. If you have more information or concerns that weren’t brought up here, please contact me @CreationEdge on most social media platforms. Otherwise, use email@example.com.
If you are or were an employee of TOI or PDT and wish to talk, I will maintain strict confidentiality. If you are one of the Westovers, I would be grateful to have a conversation.
End Update (No other changes were made, not even to fix typos)
A new corporation, “Toy Overlord, Inc.” is registered in Delaware on September 26th, 2017 under file number 6556481. Despite the state of incorporation, this business operates out of Utah. It is a common practice for corporations in order to take advantage of legal protections and fiscal incentives offered by different states.
On March 3rd, 2018, TOI secured seed debt from Black Oak Capital Partners, LLC, a Utah-based investment firm, in the amount of $1,250,000.
For the most part, TOI is doing business as Megalopolis: City of Collectibles, and lists MCOC on their SEC filings.
On March 4th, 2018, they begin selling on their Shopify-backed store at megalopolis.toys. They also open a retail storefront in Utah, in the same structure as their warehouse, with a lease set to expire during 2023.
During their first operating year, 2018, they reported $749,509 in total revenue. Revenue can also be referred to as gross sales. It indicates the total value of sales made to customers. Revenue is distinguished from profit, as profit is the amount left after the cost of goods sold, taxes, debt payments are taken into account. For 2018, TOI’s $749,509 revenue resulted in a net loss of (-$1,698,243).
In their annual Schedule C for fiscal year 2019, they list the revenue as $735,00 and the net loss as “roughly (1.2M)”. I did not find an explanation for the discrepancy in values.
In 2019, their revenue grows quickly, which is described further on.
In late 2019, TOI used crowdfunding platform Start Engine to raise additional funds via the selling of shares. This campaign and related SEC filings contain a large amount of information.
Matt Westover is listed as the President/CEO and Founder, and in the offering details discloses he has a 69.52% share of the company’s Common Stock.
Other key employees include:
- Andrew Cramer as Lead Designer, Chris Trutanich.
- Chris Trutanich as Chief Technical Officer and Director (although his own profile indicates his position as Senior Product Designer).
- Kailey Austin-Westover as Chief Operating Officer, Treasurer and Director
- Josh Broderick as Personnel Director/Customer Service Dept. Head and Secretary
Financials Revealed in Campaign
Note: This section is heavy on financial details. I specifically focus on debts and losses, as they are generally found only within the formal financial statements, as opposed to revenues which MCOC includes in the campaign text and in business summaries.
The details disclose that the full $1.25M of seed debt from Black Oak is outstanding. Those funds were spent on:
- advertising (-$500,000)
- inventory (-$500,000)
- warehouse space (-$120,000)
- furnishings (-$30,000)
- custom web development (-$20,000)
They indicate that operations were “choppy at times” in 2018 and 2019 so far, meaning they “often have to let up on ordering, advertising, etc., just as a clear path to break-even sales presents itself. It also has led to impromptu sales on a number of occasions in order to accrue more workign [sic] capital, which (obviously) cuts into margins and hurts the bottom line.”
Finances and spending for 2019 YTD include:
- advertising (-$260,000)
- web development for a custom mobile app (-$65,000)
- A NET-30 line of credit with Entertainment Earth Distribution (-$200,000)
- Cash on Hand $20,000
And total indebtedness is listed as:
- (-$1,857,426) to Black Oak (149% of original seed debt)
- (-$348,207) to United Debt Settlement taken out on October 3rd, 2019
- (-$95,168) to Shopify Capital taken out on August 1st, 2019
- However, Note 10 of their SEC filing lists additional debt with remaining payments
And for revenue,
- 2019 YTD revenue as of April 2019 surpassed their 2018 “total revenue” of $740,000
- By July 2019 YTD had doubled their 2018 “gross revenue”
They also had “some hiccups with the tail-end installments” of their Black Oak deal, “forcing us to take short-term deals to make up the difference”. These deals are “personally guaranteed by an officer and majority shareholder of the Company”, which can only mean Matt Westover due to his 69% of shares:
- May 23rd, 2019: $71,535 in net proceeds from Green Capital Funding, LLC, with a total repayment of (-$173,750) at 243% of original net proceeds
- June 28th, 2019: $47,402 in net proceeds from Mantis Funding, LLC, with a total repayment of (-$74,000) at 156% of original net proceeds
- July 1st, 2019: $40,000 in net proceeds from Fast Cash Advance, with a total repayment of (-$55,600) at 139% of original net proceeds
- August 29th, 2019: $55,807 in net proceeds from High Speed Capital, LLC, with a total repayment of (-$208,500) at 374% of original net proceeds
- September 9th, 2019: Additional $24,418 in net proceeds from Fast Cash Advance, with total repayment of (-$69,500) at 285% of original net proceeds
There was also a debt consolidation agreement with United Debt Settlement for American Express balances of (-$44,092) started on October 3rd, 2019 alongside the larger debt previously mentioned. The $348,207 amount includes the outstanding balances for notes payable, presumably including the remaining balances on the above short-term deals.
Strategy and Relationships
A large portion of the campaign imagery includes their mascot, a muscled figure with stark white flesh wearing a purple hooded cape that obscures his face. The obscured face is part of their branding strategy.
Our mascot, THE TOY OVERLORD, has no face or fixed identity and can neatly blend into any marketing or product category. In essence, we are building our own fandom that engulfs other toy fandoms.
That mascot is used in a logo for the Premium DNA toy line that MCOC launches later.
In this campaign, they emphasize their relationship with Four Horsemen Toy Design and Boss Fight Studios, two action figure production studios. They handle fulfillment for Four Horsemen and have a strategic partnership with Boss Fight Studios that includes a custom action figure based on the Toy Overlord mascot. Relationship disclosures: I have purchased Four Horseman products through other channels than Megalopolis. I have no other relationship with either business.
They also emphasize their relationship with leading members of the YouTube action figure community, Russ Akin AKA ShartimusPrime and Dan Eardley AKA Pixel Dan. At the time of the campaign they had 500,000 and 250,000 YouTube subscribers respectively, 565,000 and 291,000 at time of this writing. ShartimusPrime has the #1 subscriber count among adult & collector action figure channels, and Pixel Dan has one of the highest. Relationship disclosures: I have interacted with Russ Akin in person and made purchases during his public appearance at a convention. I have no other relationship with him or Dan Eardley outside of viewing their content. Authors note: In the original article I incorrectly identified PixelDan as having the #2 subscriber count.
They also list payment plan providers partial.ly and Klarna.
In this campaign, TOI raises $118,000 from 225 investors, with a target of $1,070,000, resulting in raising 11% of their goal.
Campaign updates indicate that Investor Incentives offered were to be dispensed started June 22nd, 2020. On July 27th, 2020, another update indicated that there were errors in their investor readout, and missing incentives were to be dispersed. There have been no further updates on the campaign page itself.
However, by August 2020, campaign investors started leaving comments on the page indicating they had not been receiving communication from TOI/MCOC. In September, Matt Westover left comments on the campaign page indicating a new dedicated email address for investors to contact the company. A couple investors indicated they still received slow correspondence. One investor stated they attempted to use their investor incentive $500 gift certificate on October 6th, 2020 and followed up that his entire order had been cancelled with MCOC indicating “anything before November could not be fulfilled”.
The Fall of Megalopolis
Customers Report Issues
Early in 2020, customers started complaining about fulfillment and payment issues. Complaints were made on social media, include the Facebook group Action Figure Junkies (AFJ), the forums for Toyark, directly to the company on Twitter and Facebook, through Google and Yelp and via complaints to the Better Business Bureau. Some users indicated they had filed complaints with Utah agencies. It is reasonable to conclude that these complaints are not unique. That is to say, some complainants likely wrote about their experiences in more than one location.
In a thread on AFJ started on December 8th, 2020, users discussed the details of their problematic transactions. At least 23 customers indicated they had not received product they had been charged for, or had been charged for items that were not in stock, or that they had been unable to receive refunds for orders when requested.
A thread with a poll on TFW 2005’s forums starts receiving more attention. The poll results show that the majority of respondents indicated their experience with Megalopolis as “Awful — I will never do business with them again”.
Some customers had been able to work with Ben Westover, brother of TOI’s Matt Westover, via social media in order to resolve some of their issues. Ben’s relationship to the business was never explicitly disclosed in these comments. In interviews he explains that he is involved with the business, and was hired as a designer, Ben is not listed as a significant shareholder or an employee in official filings.
During this time of customer complaints, MCOC indicated struggles with fulfillment due to COVID-19. There were increasing reports of lack of responses from MCOC, and complaints about their cancellation/restock fee that was being assessed when MCOC failed to deliver products.
Acknowledging this issues, MCOC indicated they were hiring new vendors, one to handle warehouse fulfillment and one to handle customer service training.
In an email sent out on Nov 12th, 2020 to email subscribers, they addressed the refund and cancellation issues:
We’ve heard your feedback and overhauled our policies. Below are a few key updates (see our complete list of policies here
Cancellations/Refunds — Cancel your order and receive a refund with no hassle on any pre-shipped order
No Re-Stocking Fees — Pre-orders, payment plans, and returns are free of any additional fees, regardless of circumstance
Returns — Megalopolis will cover return shipping for damaged, defective and mistaken items (shipping insurance not necessary)
They also specified the logistics partner as Shipmonk:
We are currently onboarding our inventory with logistics experts Shipmonk
Our partnership will allow for inexpensive, fast, and precise shipping
The in-stock items that surface on Megalopolis.toys throughout the November and onward are ready to ship from one of Shipmonk’s warehouses
Later, in response to emails from customers, including the investor previously mentioned, they indicated that orders prior to November, when Shipmonk started receiving their products, would not be fulfilled. There was no information provided about what stock remained in MCOC’s own warehouse, if any.
On February 4th, 2021, Entertainment Earth, Inc. (EEI), parent company of EE Distribution, filed a lawsuit against Toy Overlord, Inc. in California courts. EE Distribution is the largest wholesale distributor of toys in North America, and TOI’s primary supplier.
According to documents retrieved form Calfornia’s document system, PACER, EEI alleges:
- Non-payment of $209,165.78 for goods supplied by EEI to TOI, related to the NET-30 line of credit previously mentioned
- Cancellation fees $252,512.45 for pending orders that TOI had placed with EEI
EEI has a strict 15% cancellation fee for all orders, which indicates an approximate $1,683,416 in product orders.
Using TOI’s own stated gross margin of 35% for toys and collectibles, that retail value of products referenced in the suit would be $321,793 in delivered goods and $2,589,870 in pre-ordered goods for a total of $2,911,663 retail value.
Termination of Relationships
In October, 2020, CTO Christ Trutanich exits the company.
Sometime during 2020, Four Horsemen quietly ceased their use of Megalopolis as a distributor of their product. While the start of the relationship was widely covered in industry news articles, there was no coverage regarding the status of the relationship, and whether it was permanently terminated or merely on hold.
On February 11th, 2021, Ben Westover replied to a customer’s comment on the official MCOC Facebook page indicating that they had “parted ways” with payment service Partial.ly.
Customer: So my buddy got a refund on his madballs order, he didn’t cancel so whats happening there ? [sic]
Ben Westover: [redacted customer name] we just parted ways with partial.ly in favor of a better payment plan option and they did that automatically. We still have orders locked in and can assist in setting up new plans.
Also on February 11th, Partial.ly Support replied to a customer’s inquiry stating that they had terminated MCOC’s account due to negligence, and refunded all unfulfilled orders. This email was shared on Twitter by the recipient.
Megalopolis has unfortunately been unresponsive to our inquiries since the beginning of the new year. We have also had an increase in customer complaints and disputes due to non-delivery, failure to process refunds that were promised, and overall lack of response from Megalopolis Support. Due to this negligence, we have canceled and refunded all unfulfilled orders.
On February 17th, 2021, ShartimusPrime published a video entitled “Megalopolis refunds”. He stated:
I have not promoted Megalopolis in a long time. I’ve heard a lot of complaints from people about them making an order with M and them not getting their figure, or them just not getting their money back from the figure they never received.
ShartimusPrime also indicates that he also had an instance of non-receipt, and that the video was not sponsored in any way by Megalopolis, and that he did not own nor had he ever owned stocked in MCOC. Author’s note: In a verified email sent directly to me on 4/25/21, after this article was published, ShartimusPrime clarified:
I absolutely do NOT have a current financial relationship with Megalopolis and have not had one for quite some time.
As of January 2021, MCOC’s physical location is permanently closed,over 2 years before the end of the original release. According to their Schedule C for 2019, the retail front closed in or after March 2020 due to COVID-19 complications. I was unable to find if they had any opportunity to reopen.
Since Shipmonk was handling warehouse operations for MCOC as of November 2020, it is reasonable to conclude that the physical location was no longer necessary. The cost of the lease, if continued, would have been (-$100,000) per year for 2021 and 2022, and (-$29,000) for a portion of 2023.
There was no public announcement about the physical locations closing or relationships with the newly-announced partners being terminated.
However, on the MCOC website, they indicate the business is going a transformation. The article includes MCOC explanations of events:
Despite massive growth and success, Megalopolis strayed from its original vision in order to work within the confines of the system as it exists, only to find there were those they trusted that would still make attempts to see them run out of business entirely.
As Megalopolis weathered this storm, we had to ask ourselves what we wanted to accomplish, and who we wanted to be. Did we simply want to rebuild with new vendors, and keep playing the same game? Or did we want to remember what brought us to the dance in the first place: a passion for creativity and a desire to elevate the hobby.
The decision was clear. As such, Megalopolis is going back to its roots to create something entirely new and different. The new Megalopolis will focus on the independent creators and voices in the world of toys and collectibles. The heart and soul of creative passion.
This seems to indicate that they will no longer be selling product, and intend to pivot to become a new entrant in the toy news and media space.
The Relaunch of Premium DNA
On November 15th, 2020, the official Premium DNA Toys Facebook page updated their profile picture to their new logo, which contains a purple double helix, replacing the previous logo that included an image of the Toy Overlord mascot.
There was no direct explanation given for the change.
On December 2nd, 2020, TOI CEO and founder Matt Westover registers “Premium DNA Toys, LLC” in the state of Utah. Premium DNA Toys was previously the name of the line of original products that MCOC was going to be offering, starting with licensed Madballs figures. When the business was formed, updates to the corresponding websites began to indicate that the new company would be handling the existing plans for figures, which as of today also includes Barnyard Commandos licensed figures and a pre-order campaign for Battletoads licensed figures that started on April 20th, 2020.
In the same article that announced MCOC’s change to being a content generator, instead of a retailer, they also described the Premium DNA Toys relationship:
In early 2020, members of the Megalopolis Creative team, having grown frustrated with the limitations of merely retailing others’ products, formed a new entity focused on creating action figures based on niche retro toy and video game properties. This new company was styled “Premium DNA Toys.”
The decision was made to co-brand with Megalopolis initially due to Megalopolis being an established multi-million dollar global brand. Moving forward, the 2 brands will continue to operate independently, with Megalopolis offering real time updates on Premium DNA properties.
However, since the business was not registered as an independent LLC until December of 2020, which can in no way be construed as “early 2020”, it’s unclear what the article means by “formed a new entity” and “this company”. They also refer to Megalopolis as a “multi-million dollar global brand”, which is referencing their gross revenues, not their profits or losses, and the fact that they would ship products internationally. There is no information available to the public that they had an operating presence in any country besides the USA, or even outside the state of Utah.
The exact nature of the financial relationship between TOI and PDT, outside of their founder Matt Westover, remains unclear. For example, the PDT website polices state:
Payment Plans are Available via ViaBill — On the checkout page, select “ViaBill” under “Payment”. You will be redirected to ViaBill to enter your information, then return to Megalopolis after completing your purchase (only 25% is due at checkout).
Indicating there is still a tie to Megalopolis within the payment system.
There is no indication of how payments made originally to MCOC for Madballs or Barnyard Commandos were transferred to PDT, or if and how customer information and payment information was transferred to PDT from MCOC. They do indicate that Premium DNA products are non-cancellable and non-refundable, but their is no timestamp on their policy or history to explain what the policy was before PDT took over or if it changed at all.
Starting on March 30th, 2021 there was a conversation chain with @ToysDNA, PDT’s official Twitter account.
User 1: No connection to megalopolis right? — March 30th
@ToysDNA replying to User 1: Correct. Premium DNA is its own separate company. Megalopolis will have a link to our page since there are folks who will be looking for them there, but we will be handling all orders ourselves including those originally place with them. — March 30th
User 2 replying to @ToysDNA: hahahahaha you lying sack of crap. Megalopolis is owned by your brother and you started Premium DNA together. You have interviews stating it. — April 2nd
@ToysDNA replying to User 2: https://blackoakcp.com/portfolio-companies/ — April 2nd
User 2 replying to User 1: Ben Westover runs Premium DNA, thats probably whos running this twitter account now. His brother Matt is the owner of Megalopolis. Ben often lists himself as the Co-founder of Mega as well. … — April 2nd
I replied to User 2 on April 21st, 2021 with evidence of Matt Westover being the owner on record for both entities, as registered in Delaware and Utah, and that Black Oak was Toy Overlord Inc’s primary investor.
As of April 22nd, 2021, @ToysDNA’s replies in this conversation have been deleted. Due to reports from customers about replies being deleted or their accounts being blocked by both Megalopolis and Premium DNA, I captured the conversation in a screen shot in case content was removed or my access blocked.
I believe the findings of my report show that Megalopolis did not act with transparency in their dealings with customers, and seem to have financially impacted a large number of individuals, and some companies. It also shows that there is an undeniable, but unclear, tie between Megalopolis and Premium DNA Toys.
The questions that are unresolved can only be answered by Matt Westover and his associates.
- What is the current valuation of Toy Overlord, Inc?
- What is the current outstanding value of orders that customers were charged for but were not fulfilled?
- Do you have plans to finalize refunds to customers still making claims?
- At the time of the Start Engine campaign, had you recently attempted to secure debt from entities such as those used prior to your debt consolidation with United Debt Settlement?
- If you had attempted to secure such debt, were you denied?
- Did you have any reasons that you have no already described in the campaign details to believe that your investors would not profit from their investments?
- Have all investor incentives been fulfilled?
- Your covenants with Black Oak Capital required $350,000 cash on hand. Were you ever in compliance with these covenants?
- Can you prove beyond a reasonable doubt that you or your staff were not deleting comments from costumers?
- What is the operating structure of the new entity Premium DNA Toys, LLC?
- How was Premium DNA Toys, LLC funded?
- Have you transferred customer data from Toy Overlord, Inc. to Premium DNA Toys, LLC?
- If you have transferred such data, including but not limited to PII and payment information, did you do it with consent of all customers involved?
- What is your level of involvement and investment in Premium DNA Toys, LLC?
- How will that involvement differ from what we have seen from Toy Overlord, Inc. so far?
- If Toy Overlord, Inc. becomes insolvent, will that impact Premium DNA Toys, LLC in any way? And if so, how?
- Do you still have financially-motivated relationships with Four Horsemen Toy Design, Boss Fight Studios, Pixel Dan?
- Do you still have financially-motivated relationships with The Fwoosh or Toyark?
- Do you have any comments regarding allegations from Entertainment Earth?
In his interview with Toy Hype USA, Ben Westover stated:
There’s a few collectibles companies that do a great job, and there’s a lot that frankly don’t. So you have to prove yourself to earn trust, and also differentiate yourself to offer something different than what’s already available.
In light of that statement, and the details covered in my report,
How does Premium DNA Toys, LLC plan to prove themselves and earn the trust of customers?