Osom Products Inc. — the mobile phone company founded by former employees of Essential, which shut down after releasing a single phone — is shutting down this week, having released a single phone.

The news comes shortly after Osom’s former chief privacy officer sued the company, claiming that it was out of money after its CEO used business funds to pay for personal trips and exotic cars.

During an internal meeting on Tuesday, Osom executives announced their decision to shutter the company, according to multiple sources who spoke to Android Authority. The report said most of the company’s employees will be laid off on Friday but will receive severance pay and be eligible for continued healthcare.

After this article was published, we received the following statement from Osom confirming Android Authority’s report:

The report in Android Authority is correct, Osom is sadly shutting down. In May of 2024, having no customers for a mobile phone despite concerted efforts, Osom at the time decided to pivot to a new project. Osom was forced to let go of a number of employees at that time to reduce our burn rate.

Unfortunately, given the bleak market climate for fundraising for consumer electronics startups, we were unable to raise a new round. While some maintenance operations to ensure contractual requirements will proceed, Osom’s general operations will shut down on September 6th. – Jason Keats, CEO

Osom was started by Jason Keats (the allegedly Lambo-loving CEO) and several former executives and employees of Essential after that company shut down in 2020, following poor sales of its Essential Phone and the departure of founder Andy Rubin. Osom’s stated goal was to create privacy-focused products, which included a USB-C cable with a switch to turn off its data transfer capabilities and the Osom OV1 smartphone, which the company revealed in early 2022.

The company partnered with blockchain company Solana later that year to launch a version of the OV1, now called the Saga, with a built-in crypto wallet and other apps that rely on Solana’s blockchain features. A few engineers will reportedly remain on at Osom as contractors to help deliver another security update for the Saga smartphone in December and complete the company’s obligations to Solana.

Update, September 5th: Added statement from Osom CEO Jason Keats confirming the company’s shutdown.