The Evolution of Toy Overlord, Megalopolis and Premium DNA Toys

The Beginning

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.

Statement of Operations from TOI’s first Schedule C for operations from inception in September 2017 through end of year 2018.
Description of operating results taken from TOI’s second Schedule C for fiscal year 2019.

Crowdfunding

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.

Portrait of Matt Westover as it appeared originally on the Start Engine campaign. He is wearing a blue jacket and a grey baseball cap.
Matt Westover, President/CEO & Founder of Toy Overlord, Inc.
  • 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.

  • advertising (-$500,000)
  • inventory (-$500,000)
  • warehouse space (-$120,000)
  • furnishings (-$30,000)
  • custom web development (-$20,000)
  • 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
  • (-$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
  • 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”
  • 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

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.

Campaign Results

In this campaign, TOI raises $118,000 from 225 investors, with a target of $1,070,000, resulting in raising 11% of their goal.

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.

Out of 173 respondents, 58.4% had an “awful” experience with Megalopolis.

Litigation

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.

  • 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

Termination of Relationships

In October, 2020, CTO Christ Trutanich exits the company.

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.

Premium DNA Toys Facebook page profile picture from September 30th, 2020 thru November 15th, 2020. The logo is a stylized rendering of the hooded, faceless head of the Toy Overlord mascot in metallic gold colors. Marketing images would include this logo in different colors, including silver and purple, as evidenced on Wayback Machine archives of premiumdna.toys.
The new double-helix logo.

Remaining Questions

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.

  • 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?

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Grayson Leigh

Grayson Leigh

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Toy, action figure, and business enthusiast. I am a husband, father, artist, Autist, programmer, DBA, and geek.