Skully, a startup that promised “smart” motorcycle helmets, confirmed on Friday that it has officially gone belly up.
The San Francisco startup revealed it would file for Chapter 7 bankruptcy, meaning all of the company’s assets — including inventory, equipment and intellectual property — will be liquidated by a court-appointed trustee. The sale of these assets will be used to pay back debts owed to the company’s creditors.
“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 company said in a statement. “What this means now is that SKULLY will no longer be able to ship AR-1 Units or process refunds directly.”
It is unknown if the 3,000 customers who used Indiegogo to prepay $1,499 for a single AR-1 “smart helmet” for motorcyclists will see a refund. Indiegogo users aren’t protected by traditional consumer laws, but are considered unsecured creditors. In Chapter 7 bankruptcy proceedings, unsecured creditors are typically the last to get paid. Skully’s unsecured creditors should receive notice from the bankruptcy court with instructions on how to file a claim with the trustee.
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CEO Marcus Weller co-founded Skully in 2013 and raised an $11 million in Series A funding last February after selling more than $3 million worth of pre-orders on Indiegogo. In July, Weller and brother and Chief of Staff Mitch Weller were cast out of the company and Chief Operating Officer Martin Fichter was made acting CEO. Two weeks ago, the company furloughed 35 full-time employees.
“Our team is devastated and deeply saddened that our valued partners, vendors, employees and customers have been negatively affected by what has transpired,” the company wrote in a post. “We realize there are many unanswered questions and that this is a very upsetting situation. We are truly sorry.”