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Former employees give a look inside LifeBrand’s financial turmoil leading up to layoffs

The entire board has resigned and employees missed multiple paychecks, Technical.ly has learned.

CEO Thomas Colaiezzi and COO Jemma Barbarise with LifeBrand jerseys. (Photo via twitter.com/tommyjcola)

Employees at Philly-area startup LifeBrand describe weeks of missing paychecks and leadership disruptions leading up to last week’s mass layoff.

At least two lawsuits appear to be pending against the social media reputation management firm, one for breach of contract and the other for loan defaults

“LifeBrand is delinquent and in default of its payment obligations,” reads one filed complaint, “despite repeated affirmations of the indebtedness and definitive assurances that all sums due will be paid.”

The West Chester, PA company laid off its entire team of 30, CEO Thomas “TJ” Colaiezzi previously confirmed to Technical.ly. He maintains the company is still fully operational and said he intends to bring some employees back.

But just prior to the layoffs, the company’s entire board resigned, Technical.ly has learned. And interviews and court records show LifeBrand has been in financial turmoil for months — or longer.

Dissolution of the board

Several former employees spoke on background with Technical.ly to protect from any repercussions, but the information they shared paints a troubled picture.

LifeBrand’s partnerships with major sports brands such as the Phillies, Eagles and Sixers did not turn a profit, according to a former staff member familiar with the company’s finances. Colaiezzi confirmed this, telling Technical.ly the sports partnerships were part of a marketing strategy to gain users and connect with more corporate partners. Even so, the ex-employee said, Colaiezzi would tell investors these partnerships were profitable, something that Colaiezzi denies.

Profit modeling appeared to make it clear LifeBrand was losing money as far back as 2022, the former employee said. But leadership did not seem concerned.

Generally, it’s common for startups to take several years to reach profitability. The end of the so-called “cheap money era” of the 2010s came with a drop in venture capital investment that has forced many companies to shift away from a growth-at-all-costs mindset.

In a May 11 email, the board asked the firm’s executive leadership to resign, according to an ex-staffer. Colaizzi confirmed that the board requested he exit the company, along with COO Jemma Barbarise-Kelley and chief legal officer Jim Quinlan. After this article was published, Colaiezzi claimed there was no such May 11 email.

It’s unclear what happened next. But sources told Technical.ly that Barbarise-Kelley stepped in as interim CEO for a bit, before Colaiezzi sent an email on May 17 saying she was no longer with the company. At some point, all board members stepped down.

Colaiezzi said this week that Barbarise-Kelley and Quinlan have since left the company. (Neither has responded to a request for comment.) He also said the startup is in the process of replacing its board members.

LifeBrand missed paychecks, ran out of funds

Colaiezzi previously confirmed to Technical.ly that LifeBrand missed its most recent payroll cycle. But former employees say pay issues go further back.

Some staff are missing one paycheck, while others are missing two, a former employee told Technical.ly. Payroll did not go out as scheduled on May 3, and when it did go out five days late, only half of employees received checks. LifeBrand did not send out paychecks at all for the following cycle, scheduled for May 17.

The company temporarily suspended operations because it could not make payroll, a former employee said, and when people were laid off on May 24, they were told it was due to lack of funds.

Employees have not yet received what they’re owed or heard about when to expect it, they told Technical.ly. One said the last they heard anything about LifeBrand making up for the missing pay was when they were laid off almost two weeks ago.

Asked about this, Colaiezzi said LifeBrand does intend to settle back pay. Laid off employees did not receive any severance package.

Loan defaults and breach of contract lawsuits

In April, Ray Bartoszek, CEO of investment firm RLB Holdings, filed a lawsuit against Colaiezzi and LifeBrand.

Bartoszek loaned LifeBrand $500,000 under a promissory note, according to court documents, and Colaiezzi guaranteed repayment. When LifeBrand defaulted, Colaiezzi made partial payments but ultimately defaulted again.

The two parties reached a settlement to repay the loan, but Colaiezzi violated the terms of the agreement. Colaiezzi also “pledge[d] his personally owned real property … as collateral,” according to the lawsuit, and even agreed to pay thousands of dollars each day he was late.

“I hereby agree … to be personally responsible to pay you a penalty of $5,000 per day for every day after December 22, 2023 that you have not been repaid the principal (in full),” Colaiezzi wrote in a note to Bartoszek submitted as a part of the court case.

That legal tangle followed a February lawsuit brought by Novus Capital Funding for breach of contract, according to public records. Colaiezzi said he’s aware that he owes people money, adding that the lawsuits are being resolved.

LifeBrand raised a $27 million Series A in 2022, appeared with Kevin O’Leary in a pitch competition hosted by StartEngine and had partnerships with major sports teams. In 2021, the company was named Technical.ly’s No. 2 RealLIST Startup.

Correction: This article has been updated to correct the name of the 2022 pitch competition in which LifeBrand participated in. It has also been updated to add comments from Colaiezzi post-publication, and to amend the headline.

Sarah Huffman is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.
Companies: LifeBrand

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