Greeley, Broomfield company settles refund policy dispute with state AG

GREELEY and BROOMFIELD — The Colorado attorney general has negotiated a settlement with a Greeley company that developed a crowdfunded antiviral face mask that it claims “cleans the air as you breathe” and then reneged on its refund policy.

Measure Inc., registered with the Colorado Secretary of State at 1130 Seventh Ave. in Greeley, and affiliated with an entity called UM Systems, will, under the settlement, offer refunds to Coloradans who supported the crowdfunding campaigns and have requested refunds under the company’s “100% satisfaction guarantee.”

Attorney General Phil Weiser said in a press statement that the company crowdfunded on both Kickstarter and Indiegogo under the name UM Systems. Both campaigns have concluded with Kickstarter reporting that 14,404 backers provided $3.02 million as of Aug. 29, 2021, and Indiegogo saying its campaign raised $4.19 million from 19,662 backers.

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The company developed what it called a UVMask, which while not FDA approved for medical use, was intended for nonmedical, consumer use. 

The company described the mask on LinkedIn as “the world’s first antiviral face mask with a patented Sterile-Vortex active UC-C sterilization that cleans the air as you breathe.” It said that UM Systems is “an optical science and biotech startup based in Colorado” and  listed Broomfield as its headquarters.

The company website lists just first names for its executives but the original Secretary of State filing listed Xiaojuan Li as the registered agent, later replaced as registered agent by Panfeng Xiang in 2020, who was replaced by a corporate filing entity after that. LinkedIn listed Kirill Rostovsky as a cofounder. He is identified as Kir on the company website.

The company touted the crowdfunding campaigns as among the most funded campaigns in crowdfunding history, according to the attorney general’s statement. On LinkedIn, the company said the campaigns “ranked Top 100 among all 363.3k campaigns in Kickstarter history.”

While originally offering the 100% refund, “Measure later limited its refund and satisfaction guarantee but pledged to honor the previous policy for people who were backers of the company before the policy changed. When these same backers tried to return their masks, however, Measure changed the terms of the guarantee and declined to provide the complete refund — instead, it only offered consumers who returned the masks store credit,” Weiser said.

“Colorado consumers made vulnerable by the fear amid a global pandemic purchased an experimental mask product, believing it would keep them safe, in some cases investing hundreds of dollars,” Weiser said. “This company neglected to honor its promises to consumers who wanted their money back. This settlement will ensure that the company fulfills its promise and customers who are unsatisfied with the product will have their money returned.”

In the settlement, Measure agreed to email the 425 Colorado backers that they can submit a claim form to request a refund. Claimants will not be required to return the product. Refunds will come through Kickstarter or Indiegogo.

As of today, the UM Systems support portal on the company website was “currently not accessible.”

Weiser said that the company will also pay a $100,000 penalty to the state and an additional $50,000 if it fails to comply with the refund process.

Larry Coleman, director of operations for the company, responded to BizWest’s request for a comment with an email saying that Kickstarter has clear policies for refunds — essentially saying that investors are at risk and refunds are not guaranteed.“However, since our marketing partner has unfortunately stated some language on the page with regard to satisfaction guarantee, we have agreed to a settlement to help protect the interests of our backers. Please note that this settlement was not an admission of any wrongdoings, but an agreement in good faith,” Coleman wrote.