Directors of popular Dunedin craft chocolate company OCHO are reluctantly seeking voluntary liquidation as the business faces financial uncertainty.
On June 12 the new board notified staff and shareholders that it believes the company is unable to trade out of its current financial situation and has no prospect of achieving future profitability under the current business model.
As a result, they have requested a special meeting to be held on June 26, to consider and pass a resolution to appoint a liquidator.
“While OCHO Limited is currently solvent and can continue to trade for a short period of time, the new board hopes that winding up the company will present an opportunity for the business to be sold as a going concern,” OCHO Limited board chair Pete Lead says.
The current Board has only been involved for up to six months and it has taken this long to fully understand the situation and explore all available options.
“This is not a decision that has been made lightly and the new board is mindful what this announcement means for the 11 highly talented and dedicated OCHO staff. Staff are our priority, and we will work to ensure they continue to be paid until a liquidator is appointed,” Lead adds.
The original OCHO chocolate company was launched in 2013 by Liz Rowe and operated as a small, craft chocolate company until 2017, when OCHO Newco was incorporated for the purpose of a crowdfunding campaign. The campaign raised $2 million from 3,549 investors.
OCHO Newco changed its name to OCHO Limited in 2018 – the current name of the company. In 2021, OCHO launched another equity crowdfunding campaign and raised a further $498,000 from existing and new investors. As of May 29, 3,738 shareholders and 27,806 shares are on issue. The majority of shares were bought at $100 per share.
OCHO founder Liz Rowe says she is sad to hear of the board’s decision, but not altogether surprised.
“The crowd funding in 2017 and the support from so many people who bought shares in OCHO was exciting and humbling. However, the company structure set up hasn’t proved to be the easiest model to work with. In essence, there was a big company structure being managed by a very small staff.
“Combine that with a commitment to buy cocoa beans direct from the farmers and an uncompromising approach to making the best quality craft chocolate and, with the benefit of hindsight, it’s not hard to see there were some challenges for the company from the start.”
Rowe started OCHO in 2013 and managed it as a private company with herself as sole director until the crowdfunding in 2017. She resigned as general manager in early 2019 to give the then-board the opportunity to appoint someone with the skill set needed to take the company from the start-up phase into a period of growth.
“While I haven’t had any involvement with OCHO on a day-to-day basis since 2019, I have followed progress with interest and remain the largest shareholder with approximately 8.5% of shares. I intend to support the board’s proposal to wind up the company,” she says.
Meantime, chocolate lovers are being encouraged to continue to buy OCHO chocolate either in store or online, as it provides the company with cashflow.
