Thanks for posting that! I got the same letter, but I’m apple email only and couldn’t get it copied to post. It sounds like his “partner” really messed up the business.
Is this the full email?
Yes that’s the full email. More to follow I assume, that’s why the subject was “part 1”.
2 Likes
Too bad, always have a lawyer prepare contracts, especially between friends - good paper = good friends.
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What an abrupt ending…
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Part 2:
I flew to Hong Kong as soon as possible, to meet with the factory and my now soon-to-be ex-partner to find out what was really going on. As I suspected, things were bad, but I managed to negotiate a deal between all three parties, where my partner and his companies would no longer handle sales and distribution and I would also handle the factory partner directly. As part of the agreement, I was committing to help the factory recover the outstanding invoices by paying a significant premium on the existing stock as well as on the Charlie production. In exchange, the factory agreed to manufacture the Charlie, despite the outstanding debt, but I had to pay for the injection tooling as well as 50% deposit of the production cost upfront. Last month, all parties finally signed the agreement, and I have been able to find buyers for the majority of the existing inventory already. I used the slim margins left from the inflated cost to make sure that Honeycomb staff, who were also owed money by my partner, were getting paid. Some salary payments are still outstanding, but everyone should be fully up to date by next week. Unfortunately, this has left me unable to pre-pay for the tooling or deposit required to start the production of the Charlie right now. You can argue that the customer comes first and I should have prioritized the Charlie production but in my book, people come first, they have mouths to feed and rent to pay.
Since it is highly unlikely that I will receive the payments for the pre-orders from my ex-partner, I am currently working on several finance deals to be able to start production as soon as possible. How I pay it back is not clear yet, but I am determined that all customers receive the product they paid for, regardless of the financial impact to myself.
Ultimately, it is my responsibility that we are in this situation, and I can’t expect anyone to carry the financial burden but myself. I am incredibly sorry to everyone who has been caught in the middle of this and hasn’t received their Charlie order as promised. I really appreciate everyone who have stuck around despite the extended delays, but I think it’s my duty to tell you that you might get the product faster if you cancel your order and reorder it from one of the official resellers once they have a confirmed that the shipment is on the way. Funding an order that is tied to an invoice is a lot easier than financing one that I have to pay out of my own pocket and while I will do everything in my power to ship the pre-orders first, I might not be able to do so. If you do cancel your order, you need to be aware that you will have to dispute the charges with your credit card company to get a refund. Shopify will not issue a refund to you. (explanation below). Call your credit card company before you cancel the order, to be sure it will be refunded.
For those of you who have already cancelled your Charlie order but have not received a refund, you will have to do the same.
I am really sorry for the inconvenience, but there is nothing I can do about the matter, I have tried. I will still send a Honeycomb hat to everyone as promised, cancelled or not, just have a little patience with me.
The online store, which as mentioned, runs through Shopify and also manages our faulty return process, is controlled by the Honeycomb entity in Hong Kong, which is owned by my former business partner. When Shopify didn’t receive payments for the cancelations, they blocked further refunds and we lost our ability to send out return labels for faulty products and ship new replacement units back. Not that it mattered much, because the warehouse handling the returns had already stopped shipping out replacement products before that, due to, you guessed it, outstanding invoices. You can argue that I should have seen the writing on the wall much sooner, but I kept getting promises, that it would get sorted “next week” and sometimes it did, which restores some faith, but most of the time it didn’t. For the last two months, I have been trying to get units shipped from Europe to replace the faulty products, but my ex-partner has control of the inventory, and I have so far not been able to get him to cooperate on the matter. I am working on a solution with the factory, and they have promised to supply me with the replacement units once I’ve paid for the tooling on the Charlie, which should be soon.
The one bit of good news is that we have reached an agreement, that he will sell his assets in Honeycomb if I can find a new partner to buy him out. That’s where I’m currently at…
I’m talking to several great companies, that not only have the financial means to accelerate Honeycomb’s growth but also the technical expertise to help me develop even better products in the future and I’m very optimistic that one of them is going to come through. Honeycomb is a great business opportunity and while there are some housekeeping items to be dealt with, the solutions are easily executable. Deliver the Charlie as promised, replace the faulty products, and make sure that all creditors are paid before the remaining purchase sum is paid out. Once that’s out of the way, we can focus on the future.
Part 3:
I wish that I had gone out earlier and told everyone what was going on, but in the beginning, I expected it to be a small but easily fixable bump in the road, and more recently, I was concerned that it could jeopardize my chances of getting Honeycomb back. But finding a solution is taking longer than expected and I can no longer, in good conscience, let this go on without being truthful to you about the situation.
There are a lot of lessons to be learned from this and a lot of things I could have done differently, but hindsight is always 20/20. I feel terrible for everyone who has been affected by this, but Honeycomb is my baby, and I will fight for her to the bitter end, and when I get her back, I will right all the wrongs, that is my promise to you!
I am incredibly proud of what Honeycomb has achieved and the products we have created but devastated about the situation we
have ended up in. I still have big dreams for the future, including my
non-profit, The Flight Sim Academy, which through an incredible industry support, is still going full steam ahead with opening 30 high school aviation STEM centres in North America (and more beyond), to not only inspire kids to become aviators but also help them achieve that dream. Honeycomb is a key part of that plan and will donate 15 complete flight simulators (Alpha, Bravo, Charlie & Delta’s) to equip all the SIM Labs at the centres. A lot of the
new products in development had to be put on hold due to the financial situation, but once I have a new partner in place, we will be able to launch all of those fairly quickly and start the new projects I’ve been planning, which I can’t wait to tell you all about.
I cannot begin to express my gratitude to my team, especially in tech support and social media who despite not being paid on time since things have escalated, have stayed with me while dealing with an incredible amount of stress, not being able to help people, tell them when they will receive their product or the real reason why it hasn’t been shipped. They are the ones who were on the front lines and experienced the (justified) anger of customers, who were waiting for their products. If you contact them, please be kind. They are all dedicated people, who would love to provide you with a first-class customer service but have not been able to do so for a while, to no fault of their own.
I am also very thankful to all of you who have shown your loyalty and support from day one. I hope that once I have regained full control of my company and gotten things back on track, I can earn
your loyalty and support once again.
I apologize for the poor communication and understand your frustration. While I wish I could provide you with a specific timeline for resolving the issues, I don’t want to make any promises that I
can’t guarantee. However, moving forward, my team and I will provide you with regular updates until a solution has been found and the one thing, I will promise is that it will be done as fast as humanly possible. Please accept my apologies and thank you for your patience.
Thank you for taking the time to read through this very long letter and let me explain the situation in detail.
Again, my sincere apologies,
Nicki (Founder, Honeycomb)
That practice happens all too often on many products. Even major well known retailers do it. It’s basically lying to the customer and then hoping they can’t be bothered to cancel. Sometimes when you know something is in short supply like this it’s always worthwhile asking for stock confirmation by email.
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Ya gotta feel bad for the team at HoneyComb. I thought this story was headed toward the HongKong factory taking the design… really awful to be taken advantage of. I hope MS/Asobo, Turtle Beach, Logitech, someone, anyone can give this company a helping hand. (Sounds like someone has stepped up)
My real question here; was this really 2/3 part email? Do they not understand how email works?
2 Likes
Well, I guess I lied…
I’m certianly no happier now that I’ve recieved the three part “boy, I didn’t see this coming” series of emails from Nicki.
Here is the entire email from start to finish (all three parts concantenated) for those who are patient enough to read it in full.
Summary
I am writing this letter to explain the current situation and provide some clarity about what has been going on with Honeycomb and to offer you my sincere apology if you have been caught up in this in any way. I’m not trying to make any excuses or deny my responsibility for what happened. I should have paid more attention to what was going on and acted sooner. I have no one but myself to blame for that. To fully understand how we have ended up where we are, I need to start at the beginning…
I initially had the idea to start Honeycomb, back in 2012, when working on growing Saitek in the US market. I saw a massive gap in the market, between high-volume gaming grade and low-volume, high-end flight sim equipment.
I built the Honeycomb business plan on utilizing my knowledge and network in both industries, to develop authentic, high-quality products at a price point that a lot more people could afford, by using the mass-production infrastructure of the consumer electronics industry, paired with product fidelity of the flight training industry.
The business plan was finalized in 2012, but even with a solid financial and go-to-market plan, finding an investor and capital to launch the company proved harder than expected. The start up was too small for venture capital, but too big for an angel investor.
In 2016, I finally found a partner to start Honeycomb with. He was a longtime friend whom I trusted, and I had already been working with to help develop the US market for his video game accessories. I had presented the Honeycomb business plan to him several times before, but he wasn’t in a financial position to commit to being part of the start up at the time. However, that changed when he was able to provide the funds needed to start Honeycomb together through a finance partner.
We agreed that he would be responsible for the financial side of the business, funding the product development and manufacturing as well as using his existing company in Hong Kong as a service provider to work with our manufacturing partners, to transition the AutoCAD files I provided of my industrial and mechanical designs into a product ready for mass production. Additionally, we agreed that we would use his distribution companies in the US, Europe, and Asia to sell the Honeycomb products, so I could concentrate on product development. In return, he would get a minority ownership stake in Honeycomb. We agreed that he would register the company for us in Hong Kong since it made sense from a development standpoint and the close proximity to our manufacturing partners in Shenzhen.
We had already started the development of the Alpha but finalizing our shareholder agreement and setting up Honeycomb as a company kept getting pushed off by my partner. Finally, when the company was established, I discovered that it was done so with 100% ownership under the corporate umbrella of my business partner. He explained that it was a requirement by his finance partners, who had a lean against his company as security for the loans and wouldn’t provide the funding otherwise. He promised we would finalize the shareholder agreement, specifying the ownership percentages, which were to be executed once the loans needed for the production and development were repaid. I would never have agreed to those terms in advance (and still don’t) and although I had reservations about the situation, I wasn’t looking to sell my shares anytime soon, so getting a written agreement in place that protected my rights, became a bigger priority than actually having the shares in my hand. However, despite numerous attempts to get it finalized, no agreement has been signed by him to this date.
During the first two years, I focused almost entirely on product development and during this time, I did not suspect anything wrong when reviewing the monthly and annual financial reports. Sales were great, and I had no expectations that we would be profitable from day one. However, by mid-2022, it became apparent that my business partner was in financial trouble and when Honeycomb ended up with a negative result despite having a record year, I started looking into the financials in detail. Once I started going through the books, every invoice and purchase order, one by one, I discovered that the service fees added to the factory cost (for the services provided in Hong Kong) were significantly higher than what we had agreed. In addition, the sales prices on the invoices to my partner’s distribution companies were lower than agreed. When I confronted my business partner about the findings, he assured me that it was just an accounting error and promised to get the books in order. I accepted the explanation and solution but didn’t push to have it done immediately, not wanting to worsen my partner’s financial situation at the time. To further help the cash flow situation, I made the mistake of agreeing to a limited pre-order campaign for the Charlie’s once the production schedule had been confirmed by the factory. However, when production was set to begin, I found out that instead of paying for the components required to manufacture the product, all the money received for the Charlie pre-order had gone elsewhere. The situation escalated in July 2023, shortly after we missed the planned shipping date for the pre-orders when the factory partner contacted me directly to inform me that they had still not received payment for the Charlie production or for the several thousand Alpha and Bravo’s they had manufactured and were sitting in their warehouse, which I was completely unaware of existed. Additionally, they had a significant amount of outstanding invoices, including for the injection tooling, required to produce the plastic parts for the Charlie. The extent of the situation caught me completely by surprise.
I flew to Hong Kong as soon as possible, to meet with the factory and my now soon-to-be ex-partner to find out what was really going on. As I suspected, things were bad, but I managed to negotiate a deal between all three parties, where my partner and his companies would no longer handle sales and distribution and I would also handle the factory partner directly. As part of the agreement, I was committing to help the factory recover the outstanding invoices by paying a significant premium on the existing stock as well as on the Charlie production. In exchange, the factory agreed to manufacture the Charlie, despite the outstanding debt, but I had to pay for the injection tooling as well as 50% deposit of the production cost upfront. Last month, all parties finally signed the agreement, and I have been able to find buyers for the majority of the existing inventory already. I used the slim margins left from the inflated cost to make sure that Honeycomb staff, who were also owed money by my partner, were getting paid. Some salary payments are still outstanding, but everyone should be fully up to date by next week. Unfortunately, this has left me unable to pre-pay for the tooling or deposit required to start the production of the Charlie right now. You can argue that the customer comes first and I should have prioritized the Charlie production but in my book, people come first, they have mouths to feed and rent to pay.
Since it is highly unlikely that I will receive the payments for the pre-orders from my ex-partner, I am currently working on several finance deals to be able to start production as soon as possible. How I pay it back is not clear yet, but I am determined that all customers receive the product they paid for, regardless of the financial impact to myself.
Ultimately, it is my responsibility that we are in this situation, and I can’t expect anyone to carry the financial burden but myself. I am incredibly sorry to everyone who has been caught in the middle of this and hasn’t received their Charlie order as promised. I really appreciate everyone who have stuck around despite the extended delays, but I think it’s my duty to tell you that you might get the product faster if you cancel your order and reorder it from one of the official resellers once they have a confirmed that the shipment is on the way. Funding an order that is tied to an invoice is a lot easier than financing one that I have to pay out of my own pocket and while I will do everything in my power to ship the pre-orders first, I might not be able to do so. If you do cancel your order, you need to be aware that you will have to dispute the charges with your credit card company to get a refund. Shopify will not issue a refund to you. (explanation below). Call your credit card company before you cancel the order, to be sure it will be refunded.
For those of you who have already cancelled your Charlie order but have not received a refund, you will have to do the same. I am really sorry for the inconvenience, but there is nothing I can do about the matter, I have tried. I will still send a Honeycomb hat to everyone as promised, cancelled or not, just have a little patience with me.
The online store, which as mentioned, runs through Shopify and also manages our faulty return process, is controlled by the Honeycomb entity in Hong Kong, which is owned by my former business partner. When Shopify didn’t receive payments for the cancelations, they blocked further refunds and we lost our ability to send out return labels for faulty products and ship new replacement units back. Not that it mattered much, because the warehouse handling the returns had already stopped shipping out replacement products before that, due to, you guessed it, outstanding invoices. You can argue that I should have seen the writing on the wall much sooner, but I kept getting promises, that it would get sorted “next week” and sometimes it did, which restores some faith, but most of the time it didn’t. For the last two months, I have been trying to get units shipped from Europe to replace the faulty products, but my ex-partner has control of the inventory, and I have so far not been able to get him to cooperate on the matter. I am working on a solution with the factory, and they have promised to supply me with the replacement units once I’ve paid for the tooling on the Charlie, which should be soon.
The one bit of good news is that we have reached an agreement, that he will sell his assets in Honeycomb if I can find a new partner to buy him out. That’s where I’m currently at…
I’m talking to several great companies, that not only have the financial means to accelerate Honeycomb’s growth but also the technical expertise to help me develop even better products in the future and I’m very optimistic that one of them is going to come through. Honeycomb is a great business opportunity and while there are some housekeeping items to be dealt with, the solutions are easily executable. Deliver the Charlie as promised, replace the faulty products, and make sure that all creditors are paid before the remaining purchase sum is paid out. Once that’s out of the way, we can focus on the future.
I wish that I had gone out earlier and told everyone what was going on, but in the beginning, I expected it to be a small but easily fixable bump in the road, and more recently, I was concerned that it could jeopardize my chances of getting Honeycomb back. But finding a solution is taking longer than expected and I can no longer, in good conscience, let this go on without being truthful to you about the situation.
There are a lot of lessons to be learned from this and a lot of things I could have done differently, but hindsight is always 20/20. I feel terrible for everyone who has been affected by this, but Honeycomb is my baby, and I will fight for her to the bitter end, and when I get her back, I will right all the wrongs, that is my promise to you!
I am incredibly proud of what Honeycomb has achieved and the products we have created but devastated about the situation we have ended up in. I still have big dreams for the future, including my non-profit, The Flight Sim Academy, which through an incredible industry support, is still going full steam ahead with opening 30 high school aviation STEM centres in North America (and more beyond), to not only inspire kids to become aviators but also help them achieve that dream. Honeycomb is a key part of that plan and will donate 15 complete flight simulators (Alpha, Bravo, Charlie & Delta’s) to equip all the SIM Labs at the centres. A lot of the new products in development had to be put on hold due to the financial situation, but once I have a new partner in place, we will be able to launch all of those fairly quickly and start the new projects I’ve been planning, which I can’t wait to tell you all about.
I cannot begin to express my gratitude to my team, especially in tech support and social media who despite not being paid on time since things have escalated, have stayed with me while dealing with an incredible amount of stress, not being able to help people, tell them when they will receive their product or the real reason why it hasn’t been shipped. They are the ones who were on the front lines and experienced the (justified) anger of customers, who were waiting for their products. If you contact them, please be kind. They are all dedicated people, who would love to provide you with a first-class customer service but have not been able to do so for a while, to no fault of their own.
I am also very thankful to all of you who have shown your loyalty and support from day one. I hope that once I have regained full control of my company and gotten things back on track, I can earn your loyalty and support once again.
I apologize for the poor communication and understand your frustration. While I wish I could provide you with a specific timeline for resolving the issues, I don’t want to make any promises that I can’t guarantee. However, moving forward, my team and I will provide you with regular updates until a solution has been found and the one thing, I will promise is that it will be done as fast as humanly possible. Please accept my apologies and thank you for your patience.
Thank you for taking the time to read through this very long letter and let me explain the situation in detail.
Again, my sincere apologies,
Nicki (Founder, Honeycomb)
Also posted in one part on Facebook.
Sucks, but I appreciate his honesty. My first job out of college collapsed due to business partner shenanigans, so this all reads like sad truth.
The only way I can see Honeycomb surviving this is by partnering with someone who has a rock solid industry reputation, and can therefore genuine to customers that any future orders/refunds/repairs will be honoured.
Logitech, ThrustMaster, or even Aerosoft?
3 Likes
That’s basically a letter saying that “we lied, we lied again, then we didn’t tell the truth for a bit, told a few more lies, and now everybody has cottoned on to the fact we weren’t actually shipping any product at all (or making it, it seems!), we’d better write something that makes it sound like it’s all down to someone else, definitely not me, oh no, I’m honest as the day is long!”
What a shambles… And still deluded enough to say that the sim schools will still happen - forget that for goodness’ sakes, if they have any idea how to run a company (which clearly they don’t, as this should never have got so out of control) then concentrate on getting your house in order and satisfying customer orders… Not that that will ever happen because no investor in their right mind would invest in this mess.
If you haven’t already cancelled your orders and contacted your credit card company, make sure you make it a priority… You aren’t going to see your goods arriving.
8 Likes
Having been a happy owner of the Alpha & Bravo, and had a faulty Alpha replaced very promptly in 2022, I pre-ordered the Charlies as soon as the option became available in Feb 2023. After receiving 2 or 3 e-mails informing me of the delays, and seeing them give an update at the Flight Sim Expo ( and offering free baseball caps to all those patiently waiting for their pre-orders ), I finally decided to cancel my pre-order amid whisperings of the company going dark. I sent an e-mail on Dec 1st and was pleasantly surprised to get a response the next day. The customer services rep apologised for the long delay and said he canceled my pre-order and I would receive my refund in 10 to 15 days. I was in no hurry to chase it up as with the holidays and all and just cracked on and ordered a pair of Crosswinds that arrived here in Texas 6 days later.
So today I hear about a statement from Honeycomb and decided to check on my refund. Surprise surprise, no sign of the funds. I sent a follow up e-mail to the customer services rep and cc’d a copy to the original customer services address. The e-mail to the rep bounced but curiously, within 5 minutes of me sending it I received the 3 part statement from Honeycomb. Hmmmmmmm.
Well I was sorry to hear all the issues, but 90% of that e-mail was just waffle. I was then incensed to be told in the e-mail that from September there was zero hope of any refunds from the company or from their E-commerce partner and I would have to go through my Credit Card company. Well, I don’t have a Credit Card, I paid by debit card and now have visit my bank on Monday to see if there is any chance of getting my money back. I do not hold up much hope.
So the E-mail I got in Dec was just standard BS that the staff, probably now unemployed, were told to put out. I was lied to, simple as that. This is a disgrace and is totally unacceptable way to treat their customers. I am sure I am one of many of us possibly facing the total loss of their pre-order money and I will never again give a penny of my money to Honeycomb should they survive. For me $389.98 is not the kind of money you can just write off to bad luck. And no, I never received my complimentary baseball cap. More BS.
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When any message like this starts with a “When I started this company back in dickety aught two …” you might as well skip the rest of it because it’s just a buncha “I really had good intentions but I’m a ■■■■■■ business person and everything was against me and it’s not my fault and that’s why I took all your money and can’t deliver now.” sad-sackery and excuses.
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No no, my dude. There were a lot of lessons learned by the countless others who’ve come before you and failed in exactly the same manner, which you could have availed yourself of. You don’t need to worry about 20/20 hindsight if you are smart enough to use foresight.
I have sympathy for the customers and for the flight sim community as a whole, who really could use a decent mid-range yoke and quadrant. I have no sympathy for someone who jumps into a business with zero business sense. And even less for those who continue to BS their customers and hold on to their money while the business is circling the drain.
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I paid by VISA, my order was on 1st Feb 2023.
I called a few months ago when it became clear that no Charlies were ever going to be made and that the company had vacated their offices and was told that the limit for a chargeback or dispute was 120 days from the date of purchase.
If anyone has been successful in getting a chargeback outside this period I would love to hear from them as I may take this up again.
BTW, I would not believe a word that comes of of that “man’s” mouth (and I only use the term “man” because if I said what I actually think about him I would get banned instantly).
4 Likes
At this point, I hope that someone else (except Logitech or MadCatz) established in the industry buys their CAD models and starts selling the same quality product under a new brand.
I would also love to see the shafted customers repaid, but I think sadly that ship has probably sailed. The best that we general simmers can hope for is that the quality introduced into the consumer market by Honeycomb doesn’t go away even though it looks like the company will.
I feel bad for those who pre-ordered the Charlie as they are in a tough spot now - many of them probably spent their entire annual hardware budget on that (or worse) and now have nothing to show for it and little hope.
I do hope that if the Charlies don’t happen and the debts aren’t made good on, someone puts together a class action suit, though I doubt it’ll do any good, it sounds like there’s no money left to extract and China is notorious about protecting their companies from foreign lawsuits.
1 Like
It was for this reason I with with TB setup.
Something seemed off and then more and more delays and now this. Glad I went the way I did and not have money stolen from me and blamed on a “business partner”
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Here’s some video’s on the situation at Honeycomb Aeronautical
