As I wrote in the other thread about class action, I have no horse in this race other than an interest in the TBL machine.

However, having skimmed through the latest events, my opinion as an outsider with some experience in business is as follows (for what it is worth, to most of you I am just a random stranger on the net ).

I would not trust Dutch Pinball at this point. This is simply based on their communication (content and style) and that they are obviously putting their majority ownership interest above the survival of the company.
It should be perfectly clear to them that without resolving this situation swiftly and smoothly, DP has no future at all. 49% of something or 100% of nothing? If you have *any* business experience, the choice here should be very simple.

Edit to elaborate, even though obvious: As a small operator in a niche industry, consumer trust is an asset they cannot afford to lose. They will not be able to produce future products with a reputation tarnished by 100+ customers not receiving product paid for.

Also to take into consideration is the fact that they got themselves into this position in the first place. There has been mentions of "breach of contract". That sounds more as if there is disagreement over the terms, which seems to imply the contract was poorly written.
There could be a power/size difference of the companies involved (DP is a small, even part time(?) business and ARA is a mid-size operation?), and there could well be the case that ARA is taking advantage of that fact and that DP might be in the right.
However, and this is important, DP is *still* responsible for getting into that situation and is beholden to customers that have prepaid.

Their focus, and their *only* focus, at this point should be to ride this out with their reputation intact. If so, they can always sell the remaining 49% and start another company.
On the other hand, if this ends in misery (which looks quite likely at this point), they not only lose their business but their personal reputations as well. I would never risk that.

My advice (again FWIW) would be to get a lawyer and threaten legal action while explaining the above (reputation and the impossibility of a future if this is not resolved) hoping for a change of mind. If not, sue. You have absolutely nothing to lose IMHO.

(Again, not a lawyer, advice given FWIW, etc. yada, yada). Good luck to everyone - hope it works out!

While not invested I am following this thread with great interest. I'd like to reiterate a piece of advice though:

Those of you with partial or full preorders and located within the EU: Why don't you simply leverage the very strong consumer protection laws available to you as EU citizens? Non-delivery is a pretty big deal, and you could use the legal framework to force DP to disclose information without starting (potentially expensive) civil legal proceedings.
Granted, depending on how the complaint is handled in the country/ies involved this might take a while to reach a conclusion, but the filing of the matter will on its own put added pressure on DP to come clean.

Something they actually need to do regardless if they want to have any future in this business whatsoever. As it currently stands I wouldn't order a TBL even if it was in a box in front of me. :/

Just a thought: If there is going to be a deal involving equity with any party down the line, ARA in particular, the split should be:
DP: 49%
ARA: 49%
Joint venture of preorder owners: 2%.

You, the actual investors at this point, would have the final vote, ensuring that the parties act in your best interest.
A contract governing this would deal with how and when the 2% would be handled when the preorder holders are "bought out" using the finished machines.

Some may think I'm trolling, but I am actually half serious. This would restore some faith in both parties, guarantee transparency, and likely have the best chance of seeing machines actually produced.

Not likely that it will realistically happen, but I'm throwing the idea out there.

I agree with the sentiment of your post, but *if* they know what they are doing you are wrong about taxation. The funds paid by preorder customer should have been marked as the short term debt that they are, as such they would not be profit and therefor not taxed. The taxation would happen when they realise the profit.

Since I'm posting about that detail anyway I might as well offer my unsolicited opinion on the recent events. I actually cannot believe that people are letting them get away with this still.

(And by "getting away with" I mean that it is quite clear they are not transparent. If I understand correctly, they are talking about seeking financing to build more machines with a new CM. That sounds like a ponzi scheme to me. The preorder money is severely depleted due to salaries, trade shows, etc. and they now need to solicit more funding to actually deliver what you already paid for.
I have to question whether that is even legal at this point.)

My reference is both US and Swedish corporate taxation. I think it's safe to assume that dutch corporations are not taxed until they report profit. The preorder revenue should not have been treated as profit, so I would be very surprised if it was taxed.

However, what DP actually did with the funds and how they were treated in the bookkeeping is another matter entirely.

That's personal income tax. I was talking about corporate tax. DP should not have turned a profit from a bookkeeping perspective if the funds were properly handled. If owners/employees drew big salaries and drained the company that way is another discussion.

What kind of company are they using then? Sounds like a simpler kind of company, not equivalent to a limited company?

And regardless, if a company is not turning a profit, and has no free assets, surely no country would require owners to take salary from said company - or enforce income tax?

If what you are saying is true, one or more of these must apply:
1. DP is lying (if what you describe is what they are stating)
2. They did not incorporate the equivalent of a limited company, but rather a company type which has less solid boundaries between the company itself and the owner(s) individual income/tax status.
3. They did not file the preorder funds as liabilities.

One could argue that only part of the preorder funds would be treated as liabilities and the rest would be regarded as profit. Which would indeed leave the company with either corporate tax, or allow for salaries (=income tax + any social fees). However, again, experienced individuals would be really careful to prematurely chalk down a big percentage as profit.

Anyway, I think DP - and possible the owners as well - have run out of money. And I have no horse in the race so take it for what it's worth.

I have a big interest in TBL though and the business of pinball design / manufacture.

Sorry, this is just too fascinating.

Dutch Pinball appears to be a B.V., Besloten Vennootschap ≈ Private Limited Liability Company. From my passing reading of dutch taxation, corporate tax is determined by the profit reported by the BV. The BV is a legal entity and is wholly separate from the owners.

As such, had they been responsible the preorder money would have been earmarked as short term liabilities, with some margin. That margin would have been used to cover salaries, but the rest would not have been considered profit and would not have been taxed.

Granted, it is possible that *all* preorder money was considered revenue and turned into profit. Also possible that some/all of it was used for salaries or dividends.

What's interesting is that it looks as if anyone can order the financial details on DP. I'm not going to spend money on it, but those of you invested may be interested in it. At least this looks like a page where you can order financial info. Not sure how much info is public in The Netherlands, but in many countries the basic financial reports submitted by a corporation are public for anyone to request.

https://www.kvk.nl/orderstraat/product-kiezen/?kvknummer=591881460000

Ah, so a dutch BV both has a minimum capital requirement AND a requirement on minimum salary on the part of principal owners?
Sounds dangerous in a situation where they have been stalled. The company is actually potentially "bleeding" money without anything to show for it.
What happens if a dutch company does not have free capital to pay the minimum salaries (which could happen during a product development phase for example) are they then forced into bankruptcy?

Sorry for the slight OT, but I honestly had not expected the above to be true. In Sweden for example, a company can operate as long as its assets do not fall below a certain threshold. It is quite common for owners/managers *not* to draw salary in troubling situations to limit burn.

Seriously - why don't you just look at the balance sheet and order the rest of the financial info publicly available on DP?
That should be a VERY important factor in the decision regarding whether to just wait or force some other solution.

There is a lot of info that seemingly no one has bothered to get hold of, and yet the baseless arguing continues?

Sorry, reading the thread with genuine interest but the behaviour of some of those with vested interest is puzzling to say the least.

They are still in business because they still have some assets left in the form of preorder money. They are burning through the money that should have been used to produce the machines. Sad, but pretty much irrefutable at this point.

Respectfully, I still do not think this applies to DP!
The above can *only* be true if the company is turning a profit. DP can not have been turning a profit large enough to allow for those salaries yearly for a few years. They have sold and delivered a few games (10-40?), but the rest of the money they may have access to is liabilities until they deliver.

But for the sake of the argument, let's say they did turn a slight profit and the above tax rules apply. They then had a choice: leave the money in the company and have corporate tax deducted from the 40k, or withdraw the money as salary to avoid corporate tax.

From an owner's private perspective, the latter makes more sense since it transfers the money to his/hers private account for personal taxation after which it is now personal money. But from the corporation's point of view, it is preferable to leave the money in the company where it is still an asset after corporate taxation.

So, no matter how you look at it, for DP's owners/managers to be taking salaries when they are burning money anyway and have too little of it to fulfil obligations is simply wrong. I would even question whether it is legal (depending on what contracts there are with customers and how dutch law regulates obligations towards customers).

It boggles my mind that there are so many posters in this thread with (seemingly) large pin machine collections that fail to grasp basic business concepts or economics. Did you all inherit money? Or do you live in a large shack with nothing but pinball machines?

You *should* be caring about where the money went and why, especially since there appears to be too little left to build the machines you already paid for. The balance sheet is earlier in the thread, and you can order the rest of the financial info.

I have nothing riding on the DP outcome, so for all practical matters it doesn't matter if DP goes under or not. The only reason *I* post is that I find the story fascinating and hope that people (both in the business of buying and producing machines) learn a thing or two.

But from what I see here, it is more than likely that this ends in tears, and that people still haven't understood how dangerous the preorder/kickstarter business model can be for customers.

But don't worry. This is my last post here as whatever little advice I hoped I could contribute is not making any difference whatsoever. But good luck to each and every one of you. I mean it.