Hardcar Crashes Hard

California-based distribution company Hardcar crashed hard as the company was facing a big tax bill and no willing investors. In its death spiral, the company also laid off employees without wages that were owed to them. Yet, the “out of business” company was apparently still making cash drops and deliveries until a co-founder stepped back in to shut the operation down for good.

On The Road

Todd Kleperis founded Hardcar as a way to help cannabis companies move large amounts of cash. The company had security vehicles and relationships with banks and the business was growing. Kleperis though became more interested in another company he was creating on the banking side called Payzel. In order to focus on Payzel, he sold his interest to a group called Apollo. Or so he thought.

Kleperis hasn’t had any involvement with the company on a day-to-day basis for some time and was essentially waiting for the deal with Apollo to close to recoup some of his investment in the company which was hundreds of thousands of dollars. Apparently, an Operating Agreement was never signed which put the deal into question but Kleperis had moved on trusting the buyers would complete the paperwork. The company was on solid ground and he felt that it was in good hands. Apollo had allegedly invested over $300,00 into the company so it seemed like they too were motivated to make Hardcar work.

 

Sinking Ship

Apollo though didn’t like what it saw after spending some time with the company. The new CEO Joe Zerucha was unable to keep Hardcar going and questions were swirling about his management. At one point, there was a rumored deal that Manifest Seven Holdings (OTC: MNFSF) would buy Hardcar, but that never came to fruition. In March 2022, Manifest Seven filed a notice that it was discontinuing the operation of its cannabis bulk wholesale products and finished goods distribution services. The company wrote, “The discontinued cannabis distribution operations accounted for $3.32 million of revenue and a net loss of $2.76 million during the three quarters that ended August 31, 2021.” Manifest 7 is in default on its loans and most recently announced that its President and Chief Legal Officer had resigned. Zerucha confirmed that Manifest Seven would not be a white knight and that the deal was ended in December 2021. 

With no “deal” on the books and a looming tax bill as well, this was apparently what prompted the Apollo group to decide to pull the plug. According to Kleperis, when Zerucha replaced former CEO Salvatore Moccia the excise taxes were up to date and had been paid. Since Zerucha took over, the taxes went unpaid and eventually grew to almost half a million dollars. He was allegedly using the tax money to pay for other items, which isn’t allowed.

 Apollo also supposedly felt the company wasn’t in good shape structurally and was a hodge-podge of cobbled together licenses. The company also supposedly operated for a year without a license in good order – another problem that was bound to get caught by regulators. In other words a hot mess, not worth saving or investing any more money into.

Death Spiral

Without the Apollo money or the deal and a co-founder who believed he was no longer a majority owner, the money wasn’t there to keep the company going. Employees weren’t getting paid on time and the situation was only getting worse. The Chief Operating Officer Morgan Dodson resigned on April 29, 2022, suggesting that the company was operating in a manner that wasn’t legal, which made her uncomfortable. Like Kleperis, she was equally confused as to the ownership of Hardcar. She brought her concerns over operations that weren’t within state regulations to Apollo, thinking the company was a majority owner, only to be told to take it up with Zerucha – that he was the owner. Morgan was not only an early employee, but she also invested in the company. Zerucha was in the driver’s seat, not Apollo.

With everyone jumping ship, employee Blake Villa began informing customers the company was closing and to find a new distributor. Then Villa was let go without pay weeks before his wedding. He took to social media and aired his grievances. Zerucha told Green Market Report on May 18, that there was “significant misinformation in the public space and that Hardcar was not closing down.” 

Understandably, customers were confused. Was it closed or not? One small brand saw its limited inventory held captive by Hardcar. The brand, that asked to not be named, asked for its inventory back from the company that was allowing Hardcar to share some warehouse space. But the company declined and said that was up to Zerucha. The brand said it was asked to send thousands of dollars on an unpaid invoice, but the invoice wasn’t provided. The company owning the warehouse space did not respond to a request for comment.

Zerucha Terminated

Not long after Zerucha insisted the company was still operating, Kleperis stepped back in and terminated his employment. He has also stated that he is returning all inventory to the companies whose products remain and closing every account. Kleperis along with other investors have lost thousands of dollars with the decision to close the company. Accusations of theft, taking money from non-accredited investors, and other misdeeds are being tossed around and lawsuits are a likely outcome. Kleperis claims Zerucha was found to have comingled the client’s money and not deposited customer payments into the company bank account. All major issues are easily documented by the company. Zerucha denies all of the allegations by Kleperis. 

At least the brands will get their products returned, even if they are now once again forced to find another distributor. 

 

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


Agrify

26 comments

  • Not impressed

    June 8, 2022 at 5:38 pm

    This article is a chore to read and the writer needs to hire an editor.

    Reply

    • Debra Borchardt

      June 9, 2022 at 8:46 am

      Thank you for your feedback. We disagree. It was a complicated story, but was well-sourced.

      Reply

      • Jim M

        June 9, 2022 at 2:12 pm

        I thought the article was good. A+ on the title though….

        Reply

  • michael mclaughlin

    June 8, 2022 at 8:04 pm

    How not to do run a business.

    Reply

  • John Doe

    June 8, 2022 at 11:36 pm

    Todd built a HARDCAR by deceiving customers, employees, and investors. He made a business out of using other businesses space to get licenses, worked well out of compliance, and encouraged deceitful business practices to keep HARDCAR going. All at the expense of those that were naive to fall for his gimmick. Ask his former employees, partners, and investors. Most will all point the direction toward Todd for the basis of all the issues stated in this article. In fact, he pawned off the company on one of his associates and left them unprepared for the realities of what the current status of the company was. Saw the same thing with Genius Brands without the ability of a Russian oligarch to give credibility to the business.

    Reply

    • Pissed Off Hard Car Employee who's owed over a month in back pay!

      June 9, 2022 at 3:45 pm

      John Doe – SPOT ON!

      Reply

      • Todd Kleperis

        June 10, 2022 at 9:09 am

        Spot on about what? None of this is accurate. Nice try – who is this Jeff? The guy who moved product illegally to support his ex wife? Or is this someone like the prior management who is now terminated for cause? Hmmm I wonder – well who ever you are since you didn’t use your real name. I’m here and ready to meet in person to discuss this. I don’t hide never have and never will. I will make sure to defend all of the actions taken by a great team till the end. This chapter ends. I’m making sure this is done correctly. The prior management drove it in the ground. End of story. I have been at this for a long time so your comments are like little tiny pebbles with no truth behind them. Nice try

        Reply

    • Former Associate

      June 10, 2022 at 11:13 am

      Have to disagree. I worked with, not for, Hardcar for years and didn’t see any of that. Todd was always above board and transparent when I worked with Hardcar – sometimes he was optimistic and pie in the sky, but what CEO isn’t when talking about the future. Who invests in a company without doing their due diligence or not expecting to be sold? Hardcar had the same issue as all distributors in CA – the fact the State takes for ever to process an application and every storage location needs a separate license, so he used others licensed properties for storage – like everyone else and very much allowed. I also know for a fact that he turned this business over to the new CEO and walked away over a year ago but with a several month long period to make sure Joe understood what was going on – so if Joe was “unprepared” he had no one to blame but himself. I can talk to a lot of the more recent allegations in here because I don’t know – but if money was comingled and products were being held hostage in the last year or so – that can’t be put on Todd. This is a cannabis business in California; the bottom fell out of the market and companies are having cash issues all over the State -saying this was Todd is ridiculous. Also, the idea that a Russian oligarch adds legitimacy is pretty funny.

      Reply

    • HARDCAR

      July 15, 2022 at 6:58 am

      You have none of the facts correct and you keep posting silly undocumented false information. Check with old employees sure – ask Bryan Herrara, Morgan Dobson, Kelli Vowels, Adam Fair or anyone who had been with the company more than 3 years. Guess that works well in your fantasy world! Truth is easier to remember by the way. Worked well out of compliance? Gimmick? Right the first company to move money to the federal reserve in California for cash in transit in cannabis was out of compliance and I’m sure the federal reserve would allow that. Pawned off the company? What?? Joe Zerucha was hired as CEO – check the facts. The person who drove the company to sell to Apollo was Joe. FACT – The person who co-mingled funds in his own account from Bank of America was Joe Zerucha, FACT. Please check yours before responding otherwise you just keep looking really silly.

      Reply

  • Anthony Chamberlin

    June 9, 2022 at 1:47 pm

    What’s the point of this article other than throwing this Joe guy under the bus? It reads like a gossip column…

    Reply

    • Debra Borchardt

      June 10, 2022 at 8:22 am

      The point is small brands had their inventory held captive while the distributor fell apart.

      Reply

  • Pissed Off Hard Car Employee who's owed over a month in back pay!

    June 9, 2022 at 3:44 pm

    U OH! Several unsubstantiated claims in this article and NOT WELL SOURCED! Did the author bother to interview Joe Zerucha? Doubt it!
    All the executives and longtime employees, including those old Hard Car employees close to Todd’s new company, know that Todd is a flat-out liar and gets these articles out quickly in attempt to control the message; and of course, appear to the reader as an innocent victim of greedy mismanagement. Not this time slickster!
    Reverse projection in textbook form! Accuse others of that which in fact you are guilty of doing! This is Todd in a nutshell.
    The truth, my curious readers, is very much the opposite of what is stated in this single sourced article, namely Todd Kleperis aka Fraudd.
    Example: Stated incorrectly, Todd is the Founder of Hard Car 7 years ago. Well documented, his original business partner founded Hard Car in 2015, then Todd joined a year later. Todd was given co-founder title, to help with industry credibility. Not being truthful about a fact so fundamental as who started Hard Car, how can we believe anything he is saying?
    Here’s a gem. Todd, posing as CEO of Hard Car, behind everyone’s back, secretly started PayZel at the same time utilizing Hard Car time, resources and taking investor money for Hard Car. At one point, Todd even tried to recruit Hard Car employees over to join PayZel.
    No doubt Hard Car investor lawsuits are flying his direction.
    Toxic and sickening I know right? The previous persons comments regarding Todd’s business criminal antics are all spot on!
    This poor excuse of an article claims Todd is a victim of mismanagement. While Todd was off on his own mismanaging PaZel, Hard Car employees were barley holding the company together with no support from Todd whatsoever. In fact, Todd blocked Hard Car from advancing forward nicely several times. I assert! This is Todd’s selfish betrayal of loyal veterans who joined Hard Car to make a decent living for their families.
    He claims to be pro veteran. Ha! Todd says whatever it takes, to deflect away from the truth while hiding behind the quick attempt at controlling the message. Slickster, scammer, schemer, lair and worst of all in the name of pro veterans. So disgusting poor excuse of a human.

    Reply

    • Debra Borchardt

      June 10, 2022 at 8:23 am

      There is a quote from Joe in the article. It is the only comment he made as he consulted his lawyers.

      Reply

      • Joe

        June 10, 2022 at 2:17 pm

        Debra – while I am not going to debate the content and tone of the article in the court of public opinion here on this message board, your response here some nuances that are important to note for your readers, specifically that I was consulting our HardCar lawyer, not my lawyer.

        Per our last email exchange regarding this subject when you wrote to me that ‘others are ‘willing to talk’ and asked me to comment, I answered you as follows:

        “I will answer what I can, like I did with a couple of your earlier questions, however I do have a responsibility to be thorough and responsible to all the stakeholders in this matter. Others may be willing to talk to you but, unfortunately, that does not change my responsibility to be careful about what is said in the public space until we fully understand the facts.”

        Unlike others you quoted in the article, I was making sure we had as much information as possible before making any public comments.

        After learning of my termination from HardCar, I am surprised you did not give me the professional courtesy of a call or email to see if I was now willing to comment. Seems like a prudent thing to do if you wanted to ensure this was a well sourced and vetted article.

        Reply

    • Todd Kleperis

      June 10, 2022 at 9:04 am

      So you know a lot about HARDCAR and you are owed money. Did Todd do that? You mistakenly forgot the past. Yes a guy named Jeff started a company called HARDCAR SECURITY – which focused on a failing business model. Todd started HARDCAR. Get your facts right or don’t even start to try to comment. Who hasn’t paid you? Todd was not the owner when all of this went down. Poor excuse for a human? Nice comments from someone who hasn’t been paid by a company who was negative cash flowing and doing things that were not what the company was started for. You can be mad at me for whatever reason you want. To say I took investor money is a joke. To say I have done malicious things to people is also inaccurate. Your just mad you haven’t been paid. Why not go ask Joe? He’s for sure going to pay you right? Come meet me in person and we can discuss this anytime.

      Reply

    • Former Associate

      June 10, 2022 at 11:27 am

      This comment itself is pretty factually incorrect. First, Hardcar was founded in June of 2016, not in 2015 – that’s a State record. Second – it wasn’t legal to distribute cannabis for money under the old Medical rules, meaning that if Hardcar was in that business prior to 2018 they were operating illegally. Second, this article claims that Todd was both an absentee owner and the person who drove it into the ground – you can’t be both. The article very clearly says that there were 2 other CEO’s between Todd’s management and this situation – as anyone can tell you, in a company its the CEO who leads, not the person who owns equity. Then there’s the whole Payzel thing – Todd has been going around saying he was leaving Hardcar and doing Payzel for moths before he did – its the whole reason he brought in the 2 CEO’s. As for poaching – are you referring to the employees that Todd brought in with him from his other businesses, who ere always working on all of his companies while they were working with Hardcar, and then left with him for Payzel when Todd left? That’s not exactly poaching. Not sure if this article is accurate on what it says about Joe, but I know this comment is inaccurate on what it says about Todd. Frankly, the cost of cannabis in CA is less than $300 per pound – I don’t think any company that fails right now is necessarily anyone’s fault. Its a bad CA cannabis economy.

      Reply

  • Todd Kleperis

    June 9, 2022 at 3:51 pm

    John Doe – (thanks for using your real name so you can be called out for your BS) When I was working with HARDCAR, I never deceived customers or anyone. You can actually ask the people. Who is stepping up now to shut this down? Also you have no idea what you are talking about as I put nearly a million USD into HARDCAR and I loved that company. I still do and to shut it down is painful. So I’m glad you are able to post things on the net. But lets get your facts straight please. Otherwise use your real name and meet me in CA as I wind the company down and return the product to the right customers. Unwinding a business is never easy. I guess you are just really mad at Todd right? Come at me directly and don’t use some silly fake name. I’m fine right here. btw, I arrive in LA today. If you are in LA lets meet. I will show you real.

    Reply

  • Pissed Off Hard Car Employee who's owed over a month in back pay!

    June 9, 2022 at 4:32 pm

    John Doe summarizes the truth about Fraudd Kleperis accurately. To add to the accuracy, Todd is not the founder of Hard Car. His business partner founded Hard Car in 2015 and brought Todd in a year later. Todd is not being truthful about a fact so fundamental as who started Hard Car, how can anyone believe anything he is claiming? The scamming and hiding the truth behavior was there from the start. Everyone was so blindly trusting and maxed busy with the operational boots on the ground services, they never questioned the leader who claimed to be pro veterans.
    Savvy business owners in the cannabis industry at first glance liked the concept of partnering with Hard Car, but quickly backed away when they met Todd. A frequent statement of fact I hear so often from those who came and went from Hard Car.
    Todd redirected investor money slated for Hard Car and used it to begin his current company PayZel. Technically Hard Car investors are the owners of PayZel. One truthful claim in this article is lawsuits are flying towards someone and the ones with merit are those lawsuits directed to Todd. If you see in writing somewhere that Todd is sad about what happened to Hard Car, feel free to scoff and chuckle. The real sad is so many veterans were victims of deception and were witness to a classic case of reverse projection syndrome. Todd accuses others of behaviors he in fact is guilty of doing himself.
    One lie on top of another he is buried in lies.
    Like most business owners in the cannabis space, Todd is fueled by greed, lust and anger. All those who came in contact with him witnessed reverse projection and an ocean of deception.

    Reply

    • Todd Kleperis

      June 10, 2022 at 9:31 am

      Ocean of deception. Wow this is well written by a pissed off employee. Why not just confront Todd? That would be easier. So my take is that you have been with HARDCAR for more than a few months? You seem to know this guy very well. Why not just confront Todd? Redirected investor money? Are you serious? I am still the largest debt holder in HARDCAR. So who ever you think you are – you are sadly mistaken if you think I have betrayed vets. If anything this is your attempt to vent. GO for it. Say whatever you want since your hiding in a cloud right now. I’m here in person taking attacks on my character for nothing I’ve done has been wrong for investors while I was running HARDCAR and that will for sure play out in court. I’ve seen this from the outside. The people who stole HARDCAR are the ones who will be held accountable. I’ve tried for years to protect and help HARDCAR. Keep trying to slander my name. It won’t work

      Reply

  • J Joe 2

    June 9, 2022 at 4:50 pm

    I’ve tried posting the truth about Hard Car and the “moderator” takes my post down again and again. That should tell the reader everything you need to know about this article.

    Reply

    • Debra Borchardt

      June 10, 2022 at 8:27 am

      actually, I’m recovering from surgery. nothing has been taken down and I am not physically able to stay online 24/7 right now.

      Reply

    • Todd Kleperis

      June 10, 2022 at 9:33 am

      The truth will play out in court – pretty simple. Plus the majority of people in the industry know that this industry is incredibly difficult. I’m the guy who is doing the best thing possible for the customers and investors involved. It sucks to have personal character attacks by people but hey I’m here so go for it.

      Reply

  • Angel

    June 10, 2022 at 9:44 am

    I’ve known Todd for well over 11 years and I have always known him to be a good guy. I was also working with him for Hardcar but mostly just in the background and I have seen how serious he was about doing what is right. For the record, I’ve also worked with Jeff Breir, Joe Zerucha and even Sal Moccia. So yes, I’ve pretty much seen it all.

    I agree that Hardcar was not perfect but then again, what is? What I’m sure of is that Todd did have the best of intentions for everyone, especially his employees. I’ve seen him lose sleep and neglect himself because he didn’t want to disappoint everyone.

    Some of you might not agree with me when I say this but I think Todd is the one being thrown under the bus here. If anything, Todd had a management style that many didn’t like or couldn’t get along with but did that make him the fraud that some here claim him to be? Nowhere near.

    Reply

  • Alex Guy

    June 17, 2022 at 10:52 pm

    I was a Vice President at Hardcar

    Deborah you have made a gross error in accepting monies from certain individuals to write this pile of
    lies but thank you for printing it because very shortly it will be a key piece of evidence to be used against them,
    you & GMR

    but thank you for writing it because

    Reply

    • Debra Borchardt

      June 20, 2022 at 10:03 am

      Hi Alex,
      We received no money for writing this story. We don’t do sponsored content. I suggest all the Hardcar parties take their issues up in a court of law versus the message board here.
      Debra (not Deborah)

      Reply

  • Christina

    November 19, 2022 at 6:21 pm

    As a ripped off , horribly disappointed yes stake holder I know this is a complicated story first hand.

    Lots of mud slinging, what I don’t understand is why Matt McGinn is not being called out. He is the one that solicited me for money. He is the one that told me a pack of lies, he just wasn’t the one that took my check but played a big part in getting me set up for the rip off!

    Reply

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