Financial Information to Creditors and Members of BeeBee & Leaf Limited Pursuant to Statement of Insolvency Practice 6 19 August 2021

CONTENTS

1 Company Information

2 Summary of Financial Information

3 Directors' Reasons for Failure & Recent Trading Activity

4 Statement of Affairs & Deficiency Account

1 Company Information

Registered name of the company BeeBee & Leaf Limited

Trading names (if different) -

Registered number 11166030

Date of incorporation 23 January 2018

Date trading commenced

Registered office address

Unit 14 Ronald Rolph Court Wadloes Road Cambridge CB5 8PX

Principal trading address

Unit 14 Ronald Rolph Court Wadloes Road Cambridge CB5 8PX

Parent, Subsidiary or Associated Company Names and their registered numbers (if any)

-

Date of Instruction to seek a decision on the nomination of a liquidator and by whom the instruction was given

David Hollingsbee and Katherine Austin, the directors of the Company instructed Ensors Accountants LLP on 30 July 2021

Amounts paid by or on behalf of the Company in respect of the instructions to assist in placing the Company into liquidation prior to the decision of creditors on the liquidator’s appointment (if any)

At a board meeting held on 30 July 2021, the fee for assisting the directors in preparing the Statement of Affairs and seeking a decision of the Company’s creditors on the nomination of a Liquidator was agreed as £7,500 + VAT & expenses. This sum has been paid to Ensors Accountants LLP by the Company.

2 Summary of Financial Information

2.1 Extracts from the Company’s financial statements disclose the following information:

Period Ended Unaudited Accounts

30/09/20

Unaudited Accounts

30/09/19

Unaudited Accounts

30/09/18

Turnover 601,926 380,603 78,082

Gross profit 345,421 156,648 27,097

Gross profit %

Extracts from expenditure

Directors' remuneration 21,881 18,376 5,688

Bad debts 5 (16,195) 0

Dividends paid 0 0 0

Net profit / (loss) 86,841 19,477 (18,537)

Reserves / accumulated losses 87,780 939 (18,537)

Bank overdraft 0 0 0

Date of auditor's report - - -

2.2 The Company’s financial statements have not been subject to audit, as it is entitled to exemption under Section 477 of the Companies Act 2006.

2.3 The directors confirm that there have been no other transactions (other than in the ordinary course of business) with any of the Company’s directors, associates, or subsidiaries during the 12-month period prior to the winding-up of the Company.

3 Directors' Reasons for Failure & Recent Trading Activity

3.1 The history of the Company and details of events leading to the decision to place the Company into Creditors’ Voluntary Liquidation, including the Directors’ reasons for the Company’s failure are stated below. This statement has been prepared by the Directors and any comments made, opinions expressed, or assertions made are those of the Directors and not of Ensors Accountants LLP.

3.2 Following the birth of the Director’s second child in 2016, she wanted the world to be a better place for her children and it was during the late nights and early mornings that she had time to think and the ideas flowed. The Director baked sourdough on a regular basis and stored it in plastic bags. Being airtight, the bread would warm up, create condensation and turn mouldy eventually. This made her consider what else might be used in its place.

3.3 After some discussion a friend of the Directors suggested beeswax wraps which were natural and didn’t cause plastic pollution. After lots of research, the Director set about making different wraps and spent months testing out new formulations with different oils and rosins. The Director settled on a formula and, to test the market, opened a shop on Etsy in April 2017.

3.4 The response was bigger than she had imagined and so BeeBeeWraps.com was incorporated on 23 January 2018. BeeBee Wraps Limited later changed its name to BeeBee& Leaf Limited (“the Company”) in 2021. The Director resigned from her job in Autumn 2017 to concentrate on trading and to make sure the Company could fulfil the orders being received. At this time one other person was employed to assist with production.

3.5 In January 2018 The Guardian newspaper cited BeeBee Wraps as a great alternative to clingfilm. Following this article, the Company received hundreds of orders and the employees worked day and night to fulfil them.

3.6 Due to the large quantum of orders which in turn created increased revenue, together with the funds from the initial trading period and a director loan the Company were able to move into commercial premises in May 2018.

3.7 In 2019 the Company received a secured loan of £50k from Foundation East Limited and began working with a consultancy firm to help them construct the waxing equipment to help increase production and meet demand. This was just in time for the first major contract with Sky Ocean Rescue who launched a bespoke range of plastic-free products designed by celebrities like Cara Delavigne, Fearne Cotton, Sienna Milles and Kate Moss. The Company also engaged with various household names for example Abel & Cole and Milk & More. Around this time the Company engaged with a European distributor, Green Pioneer (“GP”).

3.8 The Company’s geographical sales base was mainly in the UK however, GP were able to access the continent and sales increased and remained steady.

3.9 On 8 September 2019, the product was pitched to the Dragons on Dragons' Den. Peter Jones already used and was aware of the wraps and Deborah Meaden, the Den’s eco-warrior, was very tempted but sadly neither felt able to invest.

3.10 Due to the increased demand for the product In September 2019 the Company moved to larger premises and employed additional members of the team. Initially the Company employed 3 new team members with this increasing to a maximum of 15 once more orders were received. Some employees were on zero-hour contracts with others employed on a part time basis.

3.11 The first two years of trading relied mainly on public interest in the plastic crisis and communication was mostly via social media platforms and events.

3.12 In January 2019 a debtor went into Administration owing the Company c£10k. The loss of this revenue was funded by Systematic Improvements a Company connected to David Hollingsbee (“DH”). In return DH’s shareholding was increased and he was made a director of the Company.

3.13 In December 2019 the Company created a co-branded product with the retailer Lakeland and received their first major purchase order. It was anticipated that this contract could have a value of c£300k per year.

3.14 The team of employee’s worked various shift patterns to deliver this order. The first order was ready to be delivered in March 2020.

3.15 In mid-March 2020 due to the Covid-19 pandemic non-essential retail shops had to close. Lakeland asked the Company to supply just a proportion of the order, and the remainder of the order was supplied over the next six-month period as and when requested.

3.16 Subsequently the forecasts for the forthcoming year were revised to a much lower percentage of their original value.

3.17 Initially the employees were placed on furlough and when it became apparent that lockdown would continue for a longer period than had originally been anticipated several employees were released.

3.18 As the business was predominantly wholesale, revenue dropped significantly with closures of every retailer the Company supplied. Those retailers’ online sales were not as robust as their physical stores despite their efforts.

3.19 During the April and May lockdown the Director focused on business to consumer sales and to nurture partnerships with new online retailers. This was initially successful with a significant increase in sales. With many people being at home online spending increased and The Return of Advertising Spend (“ROAS”) increased significantly giving a better return against the cost of advertising.

3.20 The Company had manufactured a rainbow coloured wrap and when during the pandemic the rainbow became the symbol of the National Health Service (“NHS”) sales increased. The Company made a 10% donation from the sale of the rainbow wrap to the NHS charity.

3.21 Unfortunately, when fulfilment warehouses reopened with new measures in place to protect staff, advertisements recommenced on social media platforms the Company ROAS returned to normal. Facebook gradually increased their costs to the point where they had doubled and the company’s ability to make a return on advertising disappeared forcing them from this social media platform.

3.22 In the previous two years the Director had pitched to Waitrose on three occasions, the first couple of occasions in person at their Bracknell headquarters. They advised that they would consider replacing their current brand of wrap with a wrap manufactured in the UK. Unfortunately, after each presentation no orders were forthcoming either due to a restructure within Waitrose or them not having the appropriate person in place to authorise the order.

3.23 At this time there was still a healthy cash balance and supported by the Government furlough scheme and a bounce back loan from HSBC, the directors pitched to potential new clientele.

3.24 The Director obtained a new contract with Wrendale and started planning a collaboration with Sanderson designs to create wax wraps featuring prints from the Morris & Co, Sanderson and Scion ranges.

3.25 In February 2021, after a strong start to the financial year cash flow was healthy and the Company was profitable, the Director loan was re-paid.

3.26 With the popularity of both Wrendale and Sanderson the Director pitched to John Lewis and Next and this was successful and they agreed to place orders, however the momentum of these partnerships was hampered by their strategies to grow conservatively and their reluctance to forge ahead meant long lead times for the Company.

3.27 However, the effect of the second lockdown in Q1 of 2021 was beginning to be felt in Q2/3. The Directors were confident they had worked hard on their business to consumer sales and it was apparent from the previous lockdown that the European distributors had recovered quickly.

3.28 During the second lockdown there were several months with significantly reduced sales and income. From March to July 2021 there was a 50% drop in sales meaning that the Company was not breaking even.

3.29 By July 2021 it was clear that the Company could not continue trading and incurring further losses. The Directors took advice from Insolvency Practitioners and following that advice made the decision to cease trading.

3.30 Following this decision steps were taken to place the Company into Liquidation. Ensors Accountants were duly instructed to assist in this process on 30 July 2021.

3.31 The staff were unfortunately given notice that their employment would terminate with effect from 30 July 2021.

The Directors’ main reasons for the Company’s failure are:

• In March 2020 when the pandemic and forced lockdown meant there was a global

economic shutdown monthly revenue fell from £70,000 to £12,000.

• A further lockdown in February 2021 had a detrimental effect on the business and

sales.

• Wholesale business simply disappeared during April 2021.

4 Statement of Affairs & Deficiency Account

4.1 A copy of the directors’ verified Statement of Affairs of the Company as at 19 August 2021 is provided with this report. The Statement of Affairs as presented is subject to the costs and expenses of the liquidation and where applicable, trade creditors are shown inclusive of VAT.

4.2 To assist with the preparation of the Statement of Affairs, the chattel assets of the Company have been professionally valued on a forced sale basis by W & H Peacock Auctioneers and Valuers (“WHP”).

Secured Creditors

4.3 There is a debenture in favour of Foundation East Limited registered at Companies House on 21 March 2019. It should be noted that the charge was novated in February 2020 to two separate entities; Alia and Let’s Do Business (“LDB”). For the purposes of the statement of affairs these are shown as being a secured debt, however, neither entity have registered details of their charge at Companies House. This matter will be reviewed once formal appointment of a Liquidator is in place.

4.4 As the Company granted a floating charge in February 2020 the Liquidator will be required to create a fund out of the Company’s net floating charge property for the benefit of unsecured creditors (known as the prescribed part). This is shown in the statement of affairs however, it should be noted that this is subject to costs of the liquidation.

Plant & Machinery/Furnishings/Racking

4.4 The book value has been taken from the Company’s accounts, whilst the estimated to realise value of £1,300 is based on WHP forced sale valuation.

Goodwill/Website/Trademarks

4.5 The estimated to realise value is nil and is based on WHP forced sale valuation.

Computer Equipment

4.6 The book value has been taken from the Company’s accounts and the estimated to realise value of nil is based on WHP forced sale valuation.

Stock/Raw Materials/WIP/Packaging

4.7 Again, the book value has been taken from the Company’s, the estimated to realise value of £9,500 is based on WHP forced sale valuation.

Book Debts

4.8 The book value has been taken from the Company’s records and is expected to be realised in full.

Cash at Bank

4.9 This represents the balance in the Company’s current account held at HSBC Bank plc.

Rent Deposit

4.10 The book value has been taken from the Company’s records. A deposit of £5,000 was paid to the landlord, Cambridge City Council who have advised that they will be utilising these funds against any unpaid rent. It is estimated that there could be a refund of c£1,670 as detailed in the statement of affairs and this will be reviewed by the Liquidator once in office.

Trade & Expense Creditors

4.11 The amount shown due to trade and expense creditors is detailed on the attached Schedule B.

Employees

4.12 As noted in 3.31 above unfortunately the employees were given notice that their employment would terminate with effect from 30 July 2021.

4.13 There are seven employees including the director. Employees have claims for holiday pay accrued but not taken as well as claims for redundancy pay and statutory notice pay. Preferential claims for holiday pay are estimated at c£10,215. Redundancy pay and statutory notice pay are estimated to be c£8,734. These will be pursued via the Redundancy Payments Office once the Company enters Liquidation.

HM Revenue & Customs

4.14 The figures shown are the estimated liabilities for HMRC for PAYE & NIC (£7,358.68), VAT of (£11,654) and corporation tax of (£8,961.11).

4.15 The Company’s deficiency is made up as follows:

£ £

Retained profits/accumulated loss at 30 September 2020 87,780

Deduct/Add:

Amounts written off for the purposes of the SoA:

- Plant & Machinery/Furnishings/Racking (43,435)

- Goodwill/Website/Trademarks (22,068)

- Computer Equipment (1,635)

- Stock/Raw Materials/WIP/Packaging (68,142) (135,280)

Amounts due as a result of the Liquidation:

Redundancy pay and pay-in-lieu of notice (8,735)

Balance - estimated trading losses for the period (87,572)

Deficiency as per Statement of Affairs (143,807)

Proof of Debt Form

BeeBee & Leaf Limited

1

Creditor Name (If a company, please also state company registration number)

2

Address of creditor for correspondence

3

Email address for creditor

4

Total amount of claim, including VAT and outstanding uncapitalised interest Note: Any trade or other discounts (except discount for immediate or early settlement) which would have been available to the company but for the insolvency proceedings should be deducted from the above claim where relevant. Where any payment is made in relation to the claim or set-off applied after date of winding-up, this should be deducted

£

5

If the amount in 4 above includes outstanding uncapitalised interest, please state the amount

£

6

Details of any documents by reference to which the debt can be substantiated (please attach copies)

7

Particulars of how and when the debt was incurred by the Company

8

Particulars of any security held, the value of the security, and the date it was given

Value = £ Date given / /

9

Particulars of any reservation of title claimed, in respect of goods supplied to which the claim relates

10

Signature of creditor or person authorised to act on his behalf

11

Name in BLOCK CAPITALS

12

Date

12

Position with or in relation to creditor Address of person signing (if different from 2 above)