Following a financial misconduct lawsuit against the CEO and dwindling revenue, American smartphone startup OSOM decided to close doors last week.
Last week, California-based smartphone startup OSOM, which originated after Essential’s dissolution, announced its closure. OSOM’s CEO, Jason Keats, made this disclosure internally as he faces a financial misconduct lawsuit, alleging that his extravagant spending contributed to the company’s economic woes.
In 2020, OSOM was established by Android creator Andy Rubin and Jason Keats, the former head of R&D at Essential, along with several other ex-executives and employees.
The company aimed to create privacy-focused products, including the OSOM Privacy Cable and the OSOM OV1 smartphone, which featured robust privacy and security features. It also partnered with the cryptocurrency platform Solana to launch the OV1, which was rebranded as the Saga and integrated blockchain features.
However, OSOM Products struggled with poor performance and allegations against Rubin from his time at Google, including sexual misconduct. Despite focusing on privacy, their partnership with Solana did not lead to a successful follow-up device, exacerbating their problems.
The company also attempted to pivot by developing an ‘AI-powered camera’ and exploring a sale to HP, but these efforts were unsuccessful. As a result, OSOM’s funds have dwindled, leading to the decision to shut down the business.
In an internal meeting, OSOM executives announced the company’s closure. Most employees will be laid off by Friday, with a few engineers retained as contractors to fulfil contractual obligations with Solana, including a security update for the Saga scheduled for December.
Laid-off employees will receive severance and be eligible for Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits.
Additionally, OSOM CEO Jason Keats is facing allegations of financial misconduct from Mary Stone Ross, the company’s former Chief Privacy Officer. The lawsuit claims that Keats’ lavish spending has worsened the company’s economic issues, a charge he strongly denies. Keats and OSOM have stated that they are prepared to challenge these allegations in court.
With OSOM shutting down, any plans for Saga Two are cancelled. It remains uncertain whether Solana Mobile will find an alternative partner to develop the device, though no public statements have been made about plans.
