Skully, a San Francisco-based startup with hopes of building a motorcycle helmet with Head-Up Display (HUD), announced that it would be shutting its doors.
The closure notice came a few weeks after Skully's board of directors forced out Marcus and Mitch Willer, the brothers who founded the company.
Now, Skully is facing a lawsuit by the founders' assistant, Isabelle Faithauser, for using funding for personal uses.
Faithauser claims the Willers, "used the corporate funds of Skully in such a fraudulent manner as to render the corporate entity a sham."
The suit, which was filed last month, states that the brothers asked Faithauser to participate in the bookkeeping procedures to decieve the investors.
The investors were tricked into believing that the company was using funds for product development when it was actually being used for the founders' personal expenses.
Some of the alleged personal expenses in the lawsuit include the purchase of two Dodge Vipers, one after the first one was involved in an accident, a rental Lamborghini, four motorcycles, the brothers' hotel and restaurant bills, and $2,000 (Rs. 13 Lakh) at a strip club called "De Ja Vu".
Skully had raised approximately roughly 979 percent of the company's original goal of $250,000, from 1,940 people through crowd-funding.
The investor's money was supposed to be used to develop helmets with a HUD, but the company kept postponing its release date.
Reports reveal that the customers who pre-ordered Skully's AR-1 helmet will not be getting a refund.