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Hear this: San Diego headphone maker goes silent

Most of us have at least one pair of earbuds. The small listening devices have a couple of advantages: they’re lightweight, fit inside the ear and they’re inexpensive. While those are all important upsides, the downside of earbuds is obvious at first listen: sound quality is typically poor.

That’s why so many people were excited about San Diego 3D headphone startup Ossic. Unfortunately, that excitement has turned to ashes with the recent announcement that the company has shut down operations, citing a lack of funds needed to ramp up to full production. That leaves Kickstarter backers and other investors out of luck and headphones. Or does it?

A recent article in the San Diego Union-Tribune quotes a Kickstarter spokesperson who said that when a funding campaign launches, a contract is formed between the creator and those who back the project. If the campaign’s creators are “unable to satisfy the terms of this agreement, they may be subject to legal action by backers.”

Ossic said in a statement that despite “funds from the crowdfunding campaign, along with angel investment,” they were unable to do more than develop the product and ship a few units. Their project “still requires significantly more capital to ramp to full mass production, and the company is out of money.”

According to the article, Kickstarter backers kicked in $2.7 million. The company also raised a little more than $500,000 on crowdfunding Indiegogo and another $130,000 on StartEngine.

For all of that, Ossic was able to deliver about 250 sets of its headphones that combined 3D audio algorithms, anatomy sensors and head-tracking tech.

When business contracts and arrangements fail, it makes sense to discuss your legal options with an attorney experienced in business litigation.