Lily Robotics, which promised to deliver a crowdfunded "throw-and-go flying camera," crashed and burned last week.
First, the company announced that, despite taking in a reported $34 million in preorders for 60,000 drones along with $15 million in private funding, it was "planning to wind down and offer refunds to customers."
The other shoe dropped when news broke that the San Francisco District Attorney's office had filed a civil suit against the company last Thursday, alleging false advertising and other unfair business practices.
Most outrageously, the suit alleges that a video published to YouTube in May 2015 that seemed to show the technology in action (and eventually racked up more than 12 million views) was deliberately misleading. The video showed users throwing the drone into the air, then cut to aerial footage with titles reading "Lily Shot" composited into the footage.
However, the lawsuit alleges those shots were actually captured with a DJI Inspire, which sold for around $3,000 at the time and was operated by two people. (Pre-order pricing for the Lily drone started at $499 and increased, in $100 increments, to $899.) According to the complaint, Lily did have one working drone that was able to take airborne video at the time — but only because it had a GoPro camera mounted to it.
And the suit details some unfortunate email exchanges between Lily co-founder Antoine Balaresque and the director of the promo video. Balaresque is said to have asked, "Can you modify a Gopro image in post-processing so that people cannot tell that it was taken from a Gopro?" And, later: "I think we should be extremely careful if we decide to lie publicly."
The suit also cites the FTC's Mail Order Rule, and alleges that Lily violated it by not having a "reasonable, good faith belief" that it could deliver products by the initially promised February 2016 ship date, or by the dates that it subsequently announced when the original ship date was delayed.
Finally, the District Attorney's office asked the court to issue a restraining order prohibiting Lily Robotics from doing anything with preorder funds other than returning them to customers. According to the D.A., the company had "used and encumbered" the preorder funds to obtain a $4 million bank loan.
The Register has a good summary of the lawsuit, including a response from an unnamed Lily spokesperson and links to the actual complaint and application for restraining order.
