Sales-tech firm Kennected facing lawsuit from creditor

Indianapolis-based sales technology firm Kennected Inc. is facing a lawsuit from a creditor who alleges that the company has defaulted on a $1 million promissory note.

Ultimo Global Holdings LLC on Nov. 4 filed its complaint against Kennected in Marion Superior Court. Ultimo had filed a similar complaint against Kennected in U.S. District Court in the Southern District of Indiana in June, but that case was dismissed in August because of jurisdictional issues.

Kennected was founded in 2018. Originally, the company offered a software platform that allowed users to automate their outreach to prospective customers via LinkedIn. LinkedIn sent Kennected a cease-and-desist letter in December 2022, alleging that the company was engaging in multiple violations of LinkedIn’s user agreement—including offering tools that “impermissibly automate mass, inauthentic activity” on the platform.

Kennected rebranded itself earlier this year and now does business as SalesAi Powered by Kennected. The company now describes its product as one that uses artificial intelligence to generate phone conversations, emails and text messages at scale, helping sales teams more quickly reach potential customers.

The company, which previously operated from Pan Am Tower at 201 S. Capitol Ave., recently moved to 9320 Priority Way West Drive, just east of Keystone Avenue between Interstate 465 and East 96th Street.

IBJ reached out via email to Kennected co-founder and CEO Devin Johnson, who referred IBJ to Kennected’s legal counsel.

Attorney Janelle Kilies of Indianapolis firm Lewis Wagner LLP, who is representing Kennected in the Ultimo case, responded on her client’s behalf with an e-mailed statement.

“Just like Ultimo’s federal complaint (which was voluntarily dismissed after repeatedly failing to properly allege jurisdiction), Kennected strongly disputes the material allegations in the state court complaint. Kennected plans to timely respond to this new complaint and assert all available defenses and counterclaims,” Kilies’ statement read.

Kennected has not yet filed a legal response to Ultimo’s complaint.

Ultimo President and Carmel native P. Nathan Thornberry, reached by IBJ via text message, declined to comment on the case. Ultimo’s counsel, Barnes & Thornburg LLC attorney Steven Baldwin, also declined to comment.

At the time Ultimo filed its federal lawsuit several months ago, Thornberry lived in Florida, and Florida was “the nerve center” for both Ultimo and Thornberry Group, the complaint said. But reached by text Nov. 8, Thornberry declined to answer a direct question about where he currently lives.

Thornberry is president of Carmel-based venture capital firm Thornberry Group. In 2022, the firm sold its home-warranty and home-inspector software and services business Residential Warranty Services to Seattle-based Porch Group Inc. for $34 million.

According to both Thornberry’s personal Facebook page and Thornberry Group’s website, the firm’s numerous holdings include El Grupo Thornberry, which sells and leases luxury properties in the Dominican Republic, and PriorityLab, an environmental testing lab that specializes in mold analysis.

Thornberry was also an investor in Original Man Candles, a startup perhaps best known for pitching its fart-scented candle to investors on the ABC pitch-contest-style show “Shark Tank.” (None of the investors, or “sharks,” chose to invest in the startup.)

According to a 2015 Indianapolis Star story, Thornberry invested $65,000 in Original Man Candles in 2011 in exchange for a 35% stake in the company, which also offered candles in other scents, such as bacon and new car. But the partnership later soured, the story said, and Thornberry sued the candle company’s founder for breach of contract. Thornberry won a $71,647 judgment in that case but did not collect it because the defendant filed for bankruptcy, the story said.

In its lawsuit against Kennected, Ultimo’s allegations involve a promissory note and adviser agreement between the two parties. Copies of both agreements, which took effect March 25, 2022, and were signed by Johnson and Thornberry, are included as part of Ultimo’s legal complaint.

The two companies also agreed to be bound by Kennected’s operating agreement, the complaint says.

In its legal complaint, Ultimo alleges that it has suffered damages of at least $841,779 due to Kennected’s breaches of those agreements.

Under the terms of the promissory note, Ultimo agreed to lend Kennected up to $1 million at 5% interest, payable in two years. If Kennected was experiencing a cash flow problem that prevented it from repaying the loan upon maturity, the agreement said, Kennected would have another 90 days to pay. The agreement also stipulated that Kennected would be required to provide “sufficient verification for the cash flow issue (as determined by [Ultimo] in its reasonable discretion.)”

When the payment came due this March, Ultimo alleges, Kennected said it was having cash flow problems and could not repay the loan. Kennected provided some financial information but failed to provide updated balance sheets and other information that Ultimo would have needed to determine the company’s ability to pay, the lawsuit says.

“Despite repeated requests, Kennected has blocked reasonable access to the business records Ultimo is entitled to under the operating agreement,” the lawsuit alleges. Ultimo also alleges that Kennected has “squandered its assets to purchase items for the majority members such as exotic automobiles and large compensation and bonus packages to company owners, none of which were disclosed to Ultimo.”

Through his attorney, Thornberry declined to say why the lawsuit alleges that Kennected squandered its assets, nor did he say whether he has any proof of that.

The lawsuit also references the adviser agreement that spells out certain business services that Ultimo would provide to Kennected in exchange for a 5% equity stake in Kennected.

Among those services:

◗ For three years after the signing of the adviser agreement, Kennected would receive two free round-trip flights per year for individuals of its choice using RWS Aviation LLC, a company controlled by Ultimo.

◗ Thornberry was to respond to Johnson’s text messages within 72 hours—or within 24 hours if Johnson labeled the message as urgent.

◗ Each quarter, Thornberry was to meet with Kennected to discuss strategy. He was also to introduce Johnson to at least one person per quarter that Thornberry believed could provide Kennected with at least $100,000 in annual recurring revenue; and to at least one person that Thornberry believed could be a strategic buyer of Kennected’s assets or ownership.

◗ For five years after the signing of the agreement, Kennected was to have access to Ultimate Website Creator, an Ultimo-controlled company that allows users to easily create websites. Kennected was to pay $9 per website created per month for the first 1,000 websites it created, and $5 per website per month for additional websites.

As compensation for these services, Ultimo was to receive 5,526 common shares of Kennected. Half of those shares were to vest immediately, with the other half vesting after three years.

As of the Nov. 4 filing date of the lawsuit, Ultimo’s complaint says, Kennected still has not repaid its borrowings. Ultimo also says it is not sure if Kennected has transferred to it the vested shares, and Ultimo also alleges Kennected may have violated its agreements by diluting Ultimo’s shares.•