Things keep getting worse motorcycle helmet startup Skully, as its production partner Flextronics has filed suit for money and materials allegedly owed it. According to court documents, Flextronics is demanding payment of roughly $2 million dollars – $505,703 in past-due bills, $514,409 in unpaid bills, and another $1.5 million in what Flextronics calls “materials and inventory related to the Skully project.” This lawsuit is the second legal action taken against Skully since the company laid off its workforce and shut its doors for lack of funding. In the first lawsuit, a former employee alleges her wrongful termination from the Skully, but also lists a number of instances where the company and its management team wasted company money on frivolous items.
Skully on Friday finally acknowledged what has already been known in the motorcycling community: the company was going out of business. The news comes after a last-minute effort by the remaining management to secure a new round of funding. With $15 million down the drain, work still to do before the Skully AR-1 would be ready to ship, and a growing group of disgruntled early adopters, Skully’s resurrection was not to be. Instead in a letter to backers and customers, Skully announced that it would be filing for Chapter 7 bankruptcy, the bankruptcy procedure for companies that are going out of business. This news, of course, directly impacts the thousands of motorcyclists who were expecting to receive a Skully AR-1 helmet.
It was just two weeks ago that we told you about Skully’s investors ousting brothers Marcus Weller and Mitch Weller from the San Francisco startup, and today TechCrunch reports that the motorcycle helmet company will be rather swiftly closing its doors. A&R readers may remember that Skully’s latest delay to market stemmed from the Skully AR-1 helmet not being ready for mass production, despite the nearly $15 million raised through seed money and a Series A funding round, which was led by Intel Capital. As such, the closure surely stems from Skully’s investors choosing to shut down the company’s operations, rather than rebuild Skully’s tarnished reputation and retool its product for mass production.
TechCrunch is reporting, and our sources have confirmed, that the investors behind the Skully AR-1 helmet have ousted one of the company’s founders, Marcus Weller, along with his brother Mitch Weller. For those who don’t know, Marcus Weller was Skully’s CEO, while Mitch Weller served as the company’s Chief of Staff. The departure of the Weller brothers comes after Skully continually missed its delivery deadlines with its first product, the Skully AR-1, which is a helmet with an integrated rear-facing camera, small computer system, and heads-up-display oculus. Hopefully this means that Skully will finally get on the right path and begin delivery helmets to its plethora of early backers. We are not holding our breath, however.