It took more than a week for remaining Skully execs to admit to themselves it was time to shut down. But late last night the company finally sent customers an email, which was obtained by TechCrunch, telling them it has officially closed its doors.
The startup’s troubles have been brewing for several months but came to a head two weeks ago when Skully’s board forced founders Marcus and Mitch Weller out of their own company. Days later most of the employees, including the engineering team, were let go and website sales for Skully’s much-anticipated augmented reality helmet were shut off.
The site is still up right now due to what we’ve been told is a website vendor payment dispute. But the company is no more.
Multiple sources inside Skully confirmed to TechCrunch the startup had run out of money and was trying to sell itself off to a subsidiary of Chinese conglomerate LeECo called LeSport. However, a number of disputes, including the possibility of an acquisition, how the founders were spending money and several manufacturing issues, caused a rift to form between the founders and investors.
What was left of the executive team were left scrambling to save the company, even telling TechCrunch it was close to raising $6 million in bridge funding to get it through this mess. But it seems it was too little, too late to salvage anything.
“Over the past several weeks our management team has worked feverishly to raise additional capital but unforeseen challenges and circumstances, beyond our control, made this effort impossible,” the letter to customers read.
Skully says it is now filing for Chapter 7 bankruptcy, which also means customers likely won’t be getting a refund on pre-orders for the $1500 AR helmet Skully was working on.
All of Skully’s assets are now subject to liens held by a secured creditor, according to the letter, which ended with an apology to those affected.
However, there is somewhat of a silver lining for Skully’s customers. Smart bike tool maker Fusar has offered a credit equivalent for the whole amount any Skully customer paid for their AR-1 helmet under what it is calling the Skully Owners Stimulus (SOS) program.
Skully customers won’t be able to redeem the full amount at one time, but, says Fusar in an open letter on its website, they will have an opportunity to recoup the entire value of the original order over time and the company will only charge customers when their order actually ships.