The Rise and Fall of KREYOS

Hi backers, friends, colleagues, this is Steve Tan, founder ofKreyos.

First things first: I want to offer my sincerest apologies to allthe backers and customers who pledged for or pre-ordered theKreyos Meteor. I am fully aware that the final product didntend up being the product we envisioned and ultimately detailedon our Indiegogo campaign. I would also like to apologize forthe series of shipping delays all of you had to endure thedisparity between the concept product you backed and the finalproduct you received along with all the delays are things thatnever should have materialized. These are things I take fullresponsibility for.

I, along with the helpdesk team have a queue of thousands ofunread emails which increases steadily each day. I am cognizantof the fact that we have not been responding to support ticketsas quickly as we want to but I want everyone to know that weare putting measures in place to improve our response times.We are not ignoring your emails, its just that we most likelyhavent gotten to them yet.

I also want to apologize to the team at Indiegogo (Kate, Ben)who were nothing but supportive to us throughout ourcampaign. They have been taking misplaced blame and heat forour own failures. There are ongoing debates as to howIndiegogos policies are not as consumer-friendly as they shouldbe, but I think thats an entirely different topic altogether. TheIndiegogo team was instrumental not only in helping Kreyosraise the funds it needed to make the Kreyos Meteor a reality,but they were also there every step of the way offering strategicadvice even when things took a turn for the worse for us.

I also would like to express my deepest apologies to the team of16 people who are part of Kreyos a lot of whom gave up stablejobs to help me and the company build our dream. All of themhave been troopers throughout this entire thing and I cannotthank them enough for their loyalty and dedication and failingwhile working with some of the most amazing people makesthings a little more painful for me.

At this point of time and in the interest of transparency, I wantto post a detailed account of Kreyos from conceptualization,setting up our operations, moving to mass production and up tothe mess were in right now. This account is in no way intendedto shift the blame away from me, I am the CEO of Kreyos andthis is my company and, as mentioned, I take full responsibilityfor the state the company and its products are in right now. I,however, think that theres value in posting this for the benefit

of the people who backed Kreyos but, more importantly, I amhoping that people who are planning to use crowdfunding tosee their ideas to fruition to see this as a cautionary tale to keepin mind when selecting Asian CM (contract manufacturer)orODM (original design manufacturer) solution partners.

Finding a reputable ODM solutions partner is difficult andcostly, especially in terms of time and complexity. I made somebad decisions along the way but there is no worse decisions forus than going with and falling victim to a certain solutionscompanyVIEWCOOPER CORP and its CEO Pro Yang who,ultimately perpetrate an intricate conspiracy against Kreyos.

I wish I learned earlier about all the troubling things aboutViewcooper. Perhaps the Kreyos story wouldve playeddifferently than it did. Instead, Kreyos itself along with ourbackers and customers all fell victim to an elaborate whitecollar crime perpetrated by Viewcooper.

The wheels were set in motion back in Early 2010

While I was in China for a business trip sometime in 2009, Iwas introduced by a mutual friend to Pro Yang Huang Chang.Aside from Viewcooper Corp, he also runs a chain of 4050Food and Beverage stores in China and claims ownership ofelectronics manufacturing plants in the region. Ive constantlystayed in touch with Pro for the next 5 years and occasionallymet him when I traveled to Shanghai for business.

http://en.wikipedia.org/wiki/Original_design_manufacturer

This is how Pro Yang describes himself:

Pro is an experienced and passionate technologist who loves tocreate innovative consumer electronic products. He is also aserial entrepreneur with over 10 years of experiencespecializing in OEM/ODM electronic products. Has a solidunderstanding of where technology trends are moving towardsand has a knack for designing products that solve specificproblems even before the market hits maturity. His broadexperience encompasses not only design and delivery ofcomplex hardware but also includes product management.Previously, Pro was CEO at a Shanghai based hardwaresolutions company VIEWCOOPER, where he led, R&D andproduct management. Prior to that, Paul founded Innmaxwhich created 3C storage products. Major clients includes HP,NEC, Lenovo , Acer, Fujitsu, Lacie,Transcend.

QUICK SUMMARY OF HOW DID PRO YANG/VIEWCOOPER DESTROYED KREYOS?

Our agreement we entered with Viewcooper/Pro Yang, is forus to buy a complete ODM solution smartwatches from him.Towards the end, it Pro Yang and Viewcooper were unableto deliver on this and ended up with Kreyos having tooversee firmware, software and mobile app development,manufacturing and logistics on his companys behalf.

1.

Paid Viewcooper premium pricing but got in return massproduction products with quality and countless issues. Wewill be more than willing to turn a blind eye if they deliveredthe products according to the specifications.

Viewcooper took a deposit of $16K USD to begin working onour iOS, Android and Windows Apps, but they werent ableto deliver these either at the very last moment. No refundswere issued to Kreyos for these unfulfilled part of theagreement.

Kreyos paid his solutions company Viewcooper, a bigfortune$$1,692,575.95 USD, but, as we later learned, henever spent it on the product, nor did he allocate the budgetto hiring the competent resources/talents for the project.Almost $900,000 USD are pocketed from just from the 20kUnits and also the LCDs that we bought from Viewcooper.Now after finishing the first 20,000 units we ordered, we arestill left with 44K units of overpriced LCDs ($660,000) and6,000 units of Meteors ($312,000). What we are extremelyoutraged about is he has taken so much money from Kreyos,but didnt deliver a product that was up to the agreed uponspecifications. He cut a lot of corners on quality as you mayrealize from the hardware you received.

Misled Kreyos into buying and stocking unnecessary andoverpriced components namely units of Sharp LCDs$962,250 USD. Viewcooper sold us the LCDs at $15 USDeach when the actual cost was only $5USD, Kreyos bought a

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total of 64,150 pieces of Sharp LCDs.

Quoted premium prices for tooling, but ended up usingcheap materials for it resulting in countless issues ininjection.

Convinced Kreyos to give him 30% equity in the company inreturn for selling us at cost price (zero markup). The pricewe were buying the finished product from Viewcooper was$52USD/pc,which he claims is the at cost price. We laterlearned that the total cost per unit was $30 and he waspocketing $22 USD in profits per unit he sold us.

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Here are some other details about VIEWCOOPER

Viewcooper Corp./

Room 1061 Building A Block 7, No 128 Hua Yuan Rd, 200083Shanghai, China 128 Loft7 A1061 200083 http://www.viewcooper.com

Contact Details:

PRO YANG HUANG CANG/

http://www.viewcooper.com/

pro.yang@viewcooper.com

HIS PARTNERS IN CRIME:

ALEX HU/

Pros right hand man and partner in crime, who is equally asuseless if not worst, cant even handle simple instructions whenour designer sent specific files and instructions for printing ourmaster cartons.

Viewcooper Corp.

Mobile: + 86 135 6435 1785

Tel: +86 21 6076 8117

Fax: +86 21 6173 1990

Skype: jianxiong.hu

Email: alex.hu@viewcooper.com

mailto:%20pro.yang@viewcooper.comhttp://jianxiong.hu/mailto:alex.hu@viewcooper.com

Heres a quick breakdown of the ill-gotten profits PRO andVIEWCOOPER made from Kreyos

20K units X $22 = $440,000 in PURE PROFIT

64,150 units of OVERPRICED LCDs (this is exclusive of theLCDs used for the units described above)

44,150units*$10= $441,500

Total profits: $440,000+$441,500= $881,500 USD

$881,500 USD of PURE PROFIT, which I am more than willingto turn a blind eye to and chalk up to experience had theydelivered the products as originally specced out. This figuredoesnt include the profits he made from Kreyos from all thetoolings and samples he charged Kreyos premiums on.

Financial Evidence:

We have uploaded all our invoices of transactions betweenKreyos and Viewcooper. You can find an archive of all ourinvoices in the Dropbox link below:

https://www.dropbox.com/sh/fgxh1xj5ioc4pdq/AAD_SIoyBFHQKZhSr4b91TCSa?dl=0

https://www.dropbox.com/sh/fgxh1xj5ioc4pdq/AAD_SIoyBFHQKZhSr4b91TCSa?dl=0

We paid Viewcooper a total of $1,692,575.95 USD from the startof the project until the delivery of the products you currentlyhave. Here is our trial balance used for 2013 tax filings.

The publicized amount ofmoney we raised throughour crowd-fundingcampaign on Indiegogo, asyou know, is in theneighborhood of$1,500,000. In reality, afterthe IGG fees, credit cardprocessing fees, Paypal fees,and the amount we spent onPR and Marketing, we wereonly left with around $1.2MUSD.

With every painful delay we announce, we saw a spike in thenumber of refund requests from backers who understandablygrew impatient. The total number of refunds we processedfrom the start of the projects up to this day amounts to around$500,000++. If youre following, the cash left from theIndiegogo campaign is now down to around $800,000. Thisamount excludes pre-orders from our own ecommerce store.

Ive personally invested a total of $370,000 in Kreyos as well.Also in order to keep Kreyos operations running until we ship,

Ive borrowed loans from angel investors, friends and familywho forked out a total of $750,000 USD. Unfortunately most ofthat money is in the pockets of Viewcooper.

Theres also monthly operational overhead, employee salaries,marketing costs, ongoing refunds etc. The more we pushedback our launch date, the worse it got for us. If Viewcooperends up delaying production and shipment by 8 months, itmeans we have to go 8 months without substantial income andrevenue, and still have to pay all our monthly operationalexpenses and honoring refunds at the same time.

A total of $750,000 USD of loans from angel investors,friends and family:

1) $100, 000 USD on the 20th Dec 2012

2) $100, 000 USD on the 11th Jun 2013

3) $150, 000 USD on the 13th Aug 2013

4) $200, 000 USD on the 24th Feb 2014

5) $100, 000 USD on the 18th Mar 2014

6) $100, 000 USD on the 19th Jun 2014

EARLY 2012: HOW IT ALL BEGAN

During one of my trips to China in 2012, Pro invited me fordinner and showed me a hardware prototype geared towardscompeting against popular big-name action cameras. I wasquite impressed by the product and the price he says hes ableto manufacture and ultimately sell them but Pro made it clearthat he will only be focused on doing ODM and not branding ormarketing. For us, we are able to buy it OEM, slap on our ownbrand and market it as our own, which a friend and I wereextremely interested in doing. Fortuitously, before he was ableto get it out to the market, GoPro came up with its celebratedBlack version which completely made his productuncompetitive specs-wise and resulted in him shelving theproduct and go back to the drawing board.

Click here for the action cam specs:https://www.dropbox.com/s/8urjrsiugnfifc1/2012.08.24.Action%20Cam.C001.Introduction.MW.pdf?dl=0

https://www.dropbox.com/s/8urjrsiugnfifc1/2012.08.24.Action%20Cam.C001.Introduction.MW.pdf?dl=0https://www.dropbox.com/s/8urjrsiugnfifc1/2012.08.24.Action%20Cam.C001.Introduction.MW.pdf?dl=0

One day, Pro emailed me and sent me the link to Pebbleswidely successful Kickstarter page. He told me that Pebble ishaving manufacturing issues and bragged about how they areseeking his ODM company (VIEWCOOPER) in helping resolvethe manufacturing issues. He said this is a very easy product tomanufacture and Pebble didnt know anything aboutmanufacturing. I regretfully bought that and thought maybethrough working with Viewcooper, people like myself who havelimited tech and manufacturing experience can launch a viableconsumer electronics product.

So fast forward a few weeks, he emailed me and proposed hewill do a ODM project for us, for a much better smart watchand we can use our own brand. In short we buy a completeODM product from from Pros solutions companyViewcooper. All we needed to do was provide them with ourbrand, watch industrial design, packaging design, App UIdesign, and they will take care of all the rest. So I thought itshouldnt be too hard, as I wont have to work on the software,hardware, firmware and focus on building a good brand instead.He said he would charge a fixed ODM profit of $15 USD per unitfor the (at the time unnamed) smart watch, and assured us hewont take on any other smartwatch projects

DEC 2012 -> JUN 2013

So Viewcooper invited me to visit his solutions companysoffice, and also sent us a PDF, with the suggested specs andprice which I have described below. Before everything started,Viewcooper promised to sell the Kreyos Meteor at BOM +$15USD, of which $50 is the BOM (bill of materials) cost from thefactory. After the success of the IGG campaign we were initiallysupposed to pay him 20,000 * $65 USD for 20k units of theMeteor.

Since I very limited technical knowledge as far as consumerelectronics would go , we relied on his company to define thespecs. After all, Pro made himself to be an expert in thisindustry. He suggested that we add a Microphone, Speaker andANT+ connectivity in order for us to differentiate ourselvesfrom the 1st Gen of smart watches that were out in the marketat that time. I thought it made perfect sense. Click on the belowto download the PDFs. Im keeping the original file names thatwas sent to us.

i) Kreyos Specs.pdf

ii) 2012.11.05.SmartWatch.Customer DevelopmentGuildline.pdf

iii) 20121.12.25.Smart Watch APP and Gadgets.pdf

https://www.dropbox.com/s/mxsnk6djhsybuk5/Kreyos%20Specs.pdf?dl=0https://www.dropbox.com/s/5143uhcco73s1j5/2012.11.05.SmartWatch.Customer%20Development%20Guildline.pdf?dl=0https://www.dropbox.com/s/4c9m89oz3rwdv8n/2012-1.12.25.Smart%20Watch%20APP%20and%20Gadgets.pdf?dl=0

iv) 2013.05.31.Smart Watch SDK.Proposal.pdf

My marketing team and I brainstormed a few brand names andsettled on KREYOS. We started with the ID design with adesigner, and also booked a small amount of Sharp LCDS forthe Kreyos campaign. We initially ordered only 3150 pcs ofSharp LCDs at $15 USD each . Prior to the campaign we alreadypaid almost $200K USD to Pros company for the moldings,LCDs and samples. I have been working in online marketingand branding for almost 10 years, so we know which resourcesto use and how to launch and package a new product (SEO,PPC, Media buy, FB campaigns, Retargeting etc). This is ourinitial design of the Meteor which originally was very thin butViewcooper was not capable enough to execute on this design.Click on the below to download the PDF.

i) KREYOS_SMART_WATCH.pdf

JULY 2013:

The fact of the matter is when Kreyos launched the product onIndiegogo, All we had was a small marketing team of 4 peopleincluding myself and some outsourced providers. We also hired3 part-time customer support personnel from oDesk and thatsit. In the beginning we did a wonderful job handling thecampaign launch, emails, social media and pretty mucheverything else. After the campaign period we considered ourpart done. At that juncture, the ball was on Viewcoopers court

https://www.dropbox.com/s/zrlohxesy9bc9i7/2013.05.31.Smart%20Watch%20SDK.Proposal.pdf?dl=0https://www.dropbox.com/s/j6n7hp4ftkq3x6a/KREYOS_SMART_WATCH.pdf?dl=0

and to manufacture the product based on the agreed uponspecifications. Weve already provided everything they requiredon our end: App UI designs, watchs UI, packaging, etc.

Our original goal was $100K, we did 15X more. When our smallteam and I launched the Kreyos project, and hit a $1.5MMproject, we were all so happy, and we thought it was thebeginning of a successful startup. We had no way of knowingthat the person that would cause all of this misery, delays andissues would be the person who brought me into this industry.

AUGUST 2013:

Since we were able to launch an extremely successful campaign,and pushed for more competitive pricing ($149), we negotiatedwith Viewcooper on dropping their price by $15. Pro counteredthat offer and suggested that we give VIEWCOOPER equity inreturn for them dropping the price. It sounded like a good dealto join forces with them and merge our companies , become co-founders and work with his team in order to augment ourweakness: hardware and FW, software R&D. If they are able tosell to us at cost price, we should be able to drop our price from$169 to $149.

In exchange for selling the Meteors at cost to us, Pro was givena 30% stake in Kreyos. 30% is given to him to distribute to keymembers of his company/team. He claimed that he will spreadthe equity around in his own discretion. We later found out that

he never shared any of these details with his team, whom welearned, wanted to join Kreyos too.

So far so good. We buy at actual cost price, our solutionscompany Viewcooper becomes our partner, so we can be morecompetitive price-wise and we get his whole team to join.Whats strange and something that shouldve raised a red flag atthat time was we were never given access to his team, but onlycommunicated with Alex and Pro himself. As things slowlyprogressed, they finally gave in to allowing us to contact theirFW and Hardware engineers.

Take note that they only allowed us to do this towards the latterpart of the manufacturing run, whereby his staff startedresigning/stopped working as few claimed they didnt see anyhope in Viewcooper and the project as there were only fewpeople working on a project this big. We started digging andfound out that the at-cost price which we were supposedlygetting the Meteors for from Pro and view cooper was not $50.

The at-cost price is only $30 and Pro was already earningaround $22 USD from selling us at $52. His total PURE PROFITper unit is around $37 USD(if including the $15). And to makethings worse, the LCDs cost which he misled us into buyinghuge batches of, was not $15, but only around $5 USD each.

All R&D, firmware, hardware, software App personnel are fromPros solutions company Viewcooper Corp. As you guys know,

we only had a goal of $100K USD when we launched thecampaign, we had no way of knowing that we would sell$1.5MM USD in such a short period. So after the campaignended, we had to immediately pay 50%($52*20000)/2=$520,000 USD, part of which was $150,000worth of LCDs that been already been paid for) of the invoiceto Pros company VIEWCOOPER to begin manufacturing.

During this period of time, Pro and Alex constantly made usbelieve that the SHARPs LCD of the watch is always out ofstock, as Pebble and Nike is booking up the entire Sharpsmanufacturing line. They claim that there is only 1 line thatmanufactures the small Sharp LCDs, and the other linesmanufacture LCD TVs. They also told us that the LCDsbooking time is usually 46 months just for the 2nd batch ofLCDs to arrive unless we order and stock now. So we becameworried because this will be a major problem if we start scaling.Judging from how well we did on Indiegogo, we expected ourmarketing team to be selling it very well on our owneCommerce channels as well. So we placed our 2nd order ofLCDs for 20k Units and followed by 44,000 units of LCDs, for atotal of 64150 pieces of LCDs, of which we paid a total of$966250. Now with all we were are sitting on 44,000 pcs ofLCDs$660,000 of worthless LCD inventory. )

MID AUGUST 2013

We spent a good amount of money to hire a design firm to

design the Kreyos homepage to make sure we properlycommunicate our key features to the public. We outsourced allour ecommerce development work to a Philippine softwarecompany to build our magento eCommerce platform.

They kinda screwed up as it wasnt ready when the Indiegogocampaign ended, so I rushed over to the Philippines to see whatthe hell is going on. We were losing so much potential salesafter we completed our IGG campaign and the eCommerce siteis still not ready. I had no idea that the time I flew was theworst time of the year to fly to Philippines. The moment Iarrived, one of the worst typhoons hit the Philippines. I gotstranded in Manila for a few days as we were not able to traveldue to the mass flooding all over the city.

We had to risk our lives todrive 3 hours all the way toSubic (a province in thePhilippines) where weencountered heavy floodsand broken bridges alongthe way. We reached ourdestination to find thedevelopers cramped in asmall, almost inhumaneworking space still workingon the eCommerce site.

Upon returning to Manila, Igot to meet anotherSingaporean friend who hasa small team ofprogrammers and customersupport personnel tomanage his eCommercebusiness in a shared office.

After figuring out the costs in Philippines is WAY cheapercompared to the US, I decided to share a new office space withmy friend and setup a small team of Customer support reps inPhilippines -Manila. This is how we came to setup ourPhilippine office.

SEPTEMBER 2013

Seeing that our eCommerce store still had a lot of issues withthe software provider I mentioned above, weve decided to endour relationship with them and hire our own web developers towork on our eCommerce store in-house. Things started to getbetter at that point.

OCTOBER 2013

We finally finished with our simple renovation of the office. Wehired our first customer support employeeKatrine, whommany of you have exchanged emails with in the past. We havesince expanded our customer support team from there toaround 5 full time customer support personnel.

NOV 2013:

Remember when we announced our first delay? When wecouldnt ship in time for Christmas , our marketing team wasthe first to come under fire from the public. I couldnt say itthen, but in reality, Viewcooper was all to blame for this and

should be the ones answering to the public.

Every time we encountered delays, we were the ones whounfortunately had to come up with excuses for Viewcooper notdelivering. For every delay, we process around $100K USD ofrefunds, which is a HUGE loss for a small startup like us. Intotal we refunded around $500,000 USD of what we receivedfrom Indiegogo & preorders due to DELAYS. And when wecomplained numerous times to Viewcooper about it, Pro simplysaid, how it is not a loss and how were just refunding what theyprepaid upfront.

During this time we are still pushing everyday forprototypes/samples and also the iOS and Android Apps,because we havent seen any developments from them at thispoint.

DEC 2013:

Finally we received prototypes from Pro good enough to bringwith us to CES. We tested it and the speaker sucked big time.He placed the blame on his partner ALEX HU who tested thespeakers. And whats even more ironic was that the echoproblem was found out by my friend when he was playingaround with it. And Viewcooper has no clue at all when theyprovided the prototype.

JAN 2014:

In all honesty, I didnt feel like we had to attend CES, as its aunnecessary expense for us in the meantime. Most of thedistributors/retailers have already reached out to us one way oranother before the show. But the show itself was a success aswe practically didnt have time to take a break as the booth wesetup was always swarmed by people.

BUT the experience was a nightmare tech-wise. I was given 20prototype units, of which by the end of the show, only 1 was leftfunctioning.

During the whole show, Pro was NEVER at the booth, he wasalways with his uncle going around the floor. And when I calledhim to tell him how crazy it was that so many units werebroken, he shouted at me over the phone saying, JUST TELLME THE PROBLEMS AND I WILL FIX IT! At this point, it kindof felt like Kreyos was working for Viewcooper and reporting toPro as the boss. After the show, he mentioned we will need todelay shipping again due to the fact that they need to makeopenings to the mold to fix the speaker and sound issue weuncovered.

Also remember we had to do the retooling of the molds? Thiswas done because the initial molds were useless and Pro evencharged us a premium for them. As I learned later, Pro markedthis process up by 200250% on top of what the supplier

charged him. We paid a premium expecting to get a premiumproduct done but that was not the case. His employees advisedto redo the tooling very early on(during October, but he is sostubborn and didnt want to fork out extra money from his ownpocket. Only in XXXXX/2014 did he agree to redo the tooling,but by that time, we were already so close to the shipping dateswe announced. Every change in molding, PCB requiresextensive testing.

FEBRUARY 2014:

We designed the mobile UI and paid him $16K USD depositback in 2013 to build our iOS and Android app. They neverdelivered those. Pro finally told me that his team was not ablework on our iOS, Android and Windows Apps this late when inthe past, he lied and said they were almost done. We scrambledto start hiring mobile developers in the Philippines to work onthe mobile app for Kreyos.

Many would ask why didnt hire developers in the US to get thisdone on time. The simple answer is cost and budget. Anexperienced iOS/Android dev would easily cost us anywherefrom 80k150K annually in the US, while it would only cost usaround 1020K USD in Philippines. We simply cannot afford 45 full time mobile developers in Silicon Valley this late in thegame. If youve been following, weve also have paid out a large

portion of our funds to Viewcooper. Part of the reason whymany US/EU corporations have development/support teams inhere. And to make things worse, Viewcooper provided almostnone if not incomprehensible and very incomplete at bestdocumentation on Firmware resulting in the mobile teamhaving a VERY hard time working on the integration, since then2 mobile developers have left because they felt it wasimpossible to work with Vewcooper. Not even one workingproduct was given to our team to work on the app. The worstthing is, the batteries on the units they did provide were noteven soldered to the board. We had to go to the mall, buy somekeyboards, cut out their USB cables and look for someone tosolder them for us.

MARCH 2014:

We had a potential angel investor who wanted to invest 300KUSD, and wanted to meet with Pro. Pros response?

Pro: How much is he investing?

Steve: $200300K depending on valuation

Pro: Not worth my time meeting with an investor only planningto invest such an insignificant amount. I can easily provide andlend you this amount myself.

There were numerous times when Kreyos needed Pro to put hismoney where his mouth is and never once did he come throughand even offer a single cent to help Kreyos. Even with the lastdelay, Viewcooper promised to AIR FREIGHT all theinventory to the US for us, but never did.

A lot of you are probably asking why we continued usingViewcooper at this point in time after we have encountered somany delays and issues with them(Note that at this stage, wewerent aware of the ridiculous markups and the money Propocketed from our entire deal)

i) We do not have working relationships with any othersolutions company

ii) We do not know any other EMS factories in China

iii) Most importantly we already paid him more then 50% of ourmoney (50% of the 20k Units and also the 64150 units ofLCDs), so we are held hostage with virtually no way out. We arenot going to be able to raise enough money in time to pushthrough with the project if we dropped Viewcooper at thispoint.

iv) We are a marketing team with very limited hardwareexperience.

So what can we do? Tell our backers that we are having issueswith our solutions company whom we have PAID 50% to startproduction and, under whose advise, we stocked overpricedLCDs. We were put in a very bad spot where the only viablething to do was wait and wait until they deliver what waspromised to us and our backers. If we ditch them, we are notgoing to be able to find a solutions partner in such a shortwindow and needless to say the delivery date will be furtherdelayed.

16th of May 2014:

The update we posted on 16th of May is another thing I want tocome clean on., Remember the time when we posted that wewere ready to ship, and posted images of the Kreyos loaded inthe boxes? Those were not 5000 units. In fact, the picture is of a

single pallet as most components didnt arrive. Pro asked us togive them another 30 days to start shipping. I agreed but on thecondition that that he uses air freight to ship everything so wecan get our stocks into our US distribution facilities at the sametime. He agrees to this with his team and other manufacturersas witness. But when the day came for him to supposedly shipthe units, he said it was too expensive and not willing to do so.

JUNE 2014:

So when we were close to fixing all these issues, weencountered another problem: Viewcooper forgot to place anorder with the accessory supplier, and the supplier did not haveenough manpower to rush the orders. So we flew in again toChina, and traveled all the way to Wujiang, which is about 23hours from the Shanghai Airport to visit this Silicon supplier.We spent a premium on the mouldings, but it is only capable ofchurning out 500 pcs per day. And they didnt have enoughmanpower and some machines werent even working. To makethings worse, the beltclip molding broke down, so much forquality.

After all these issues, we started to become very suspicious. Wealso found out that he only paid the EMS factory 30% to get theorder working, but he claims that the EMS factory requires 50%to begin with and another 50% before we ship out ( this affects

our cashflow as well. If they only require 30% to start theproject, it is much easier for Kreyos). But due to the long delay,he told us to pay the remaining 50% or else the EMS factorywont continue to work on it (guess Pro exhausted the fundsand therefore pressured us to pay him, this is my WORSTmistake, we shouldnt have paid him, but being pressured todeliver I didnt see any recourse).

After I started traveling so frequent to the EMS factory, welearned that Viewcooper has only paid 50% (30% followed by20%) since, and still owed the factory 50% of the funds eventhough we have already shipped out 14K Units to ourwarehouses. He has had difficulty in paying the suppliers andthe EMS factory, The EMS factory was not willing to release theremaining 6K Units of Meteor units that we were supposed tohave. Our guess is Pro misused the funds for his personal gainsor used the funds for his other businesses.

JULY 2014:

We finally started to ship to our Hong Kong warehouse. Prodidnt even bother to come to the factory and he practically isjust 20mins away from it. I persuaded him to come twice as it isa huge for Kreyos and the team to see our products finally goingout, but he wouldnt hear any of it. I got really annoyed at thisand realized that, outside the problems he caused which I have

already detailed, he was a horrible partner.

I started to get familiar with the manufacturer, his employeesand started to put the pieces together. Something was definitelyvery wrong about this entire situation. (Note that at the earlierstages, we werent given access to his employees nor are weable to travel to the manufacturer without him bringing usthere.)

Disgruntled Viewcooper employees are leaving because theywerent getting paid (they only get paid when we ship, Pro paysthem $12USD per unit), and also because these people areworking crazy hours.

We also realize that Kreyos, suppliers, are mere pawns in hischess game. In fact, his real intention was to make use ofKreyos to develop an ODM solution for smart watches wherebyhe can resell it instantly as a turnkey solution to othercompanies looking for this kind of product.

Basd on statements by his former employees and friends, welearned that Viewcooper had around 15 projects on hand, ofwhich several are Smartwatch projectssomething hepromised not to do for other companies.

We received the original invoices from the molding supplierswith the same prices, but we learned that local China supplierswill gladly issue a fake invoice based on what Viewcooper told

us. They will then pay Viewcooper a commission based on theactual cost. A quick example:

Supplier quotes Viewcooper $10,000 USD. But Viewcooper tellssupplier to send Kreyos an invoice of $20,000 USD. Kreyospays directly to the supplier, and supplier will then payViewcooper $10,000 in commission for the deal. Moldings,protoypes, samples, accessories all fell victim to this.

AUGUST 2014 -> Current

All hell breaks loose. I wasaccused of being a scammerand trying to run away withall the money we raised onIndiegogo.

Images of my holiday trip toItaly back in 2010 Italywhere I went with someclose friends to visit theFerrari factory (one of my

friends bought a Ferrari) were even pulled out from myFacebook page as part of a smear campaign.

The picture of me with the outlet shopping bags were actually

taken using the bags of my friends wives. I was goofing aroundwhen I took that picture. That was used for the smearcampaign. I already posted a clarification on our officialFacebook page but, after doing so, BetaBeat still went on to saythat doesnt explain where he got his haul of stuffedFerregamo bags. Seriously if one of my friends can afford tobuy a Ferrari , they can afford to buy some bags for their wives.Out of all the shopping bags in that picture, the ONLY thing Ibought is a pair of shoes from Hugo Boss. Is this good enoughfor you @BetaBeat?

This undoubtedly has been one of the most stressful andtoughest periods of my life. I can afford to fail, lose money orstart again from scratch, but I cannot afford my reputationbeing ruined with something that I didnt do or plan to do.

One of the major reasons why we delayed posting these facts isbecause, even though we have paid so much money toViewcooper. The remaining inventory belongs to Viewcooper,and not Kreyos. Therefore we have been working on gettinghim to sign documentations that would allow us to transfer thethe toolings (useless as of now) and most importantly theremaining 44K LCDs which most probably is useless now aswell, which we can at least try to dispose off at a huge loss.

WHAT WE DONT UNDERSTAND:

What I dont understand till now is, with the success of Kreyos,and the amount of money we paid him, why didnt Pro invest intalent or hiring the right people. The total amount of peopleworking on Kreyos from his end was only around 4 people,some of whom we realized are just working part time. Wewouldnt have minded him pocketing so much money if he atleast delivered something that we can fix for our backers andcustomers and continue selling for a few more months until weconceptualize a new and improved version.

He constantly bragged that we will impress our backers byshipping earlier then the promised date. But things started tolook bad after numerous delays

We wanted to hire our own firmware guys, but he wouldntsend us the firmwares source code, and insisted we wont beable to manage it. He said he will hire more people in hisTaiwan office to help speed things up, but apparently thosepeople are working on his other projects and not Kreyos.

ISSUES:

Waterproofing: The Meteor has waterproofing issues. At thispoint, we DO NOT recommend you using it on activities thatmay involve it getting wet.

Waterlogged Watches: Viewcooper will provide replacementunits for this. Replacement units are not waterproofed as well.

Speaker: Due to the design of the Meteor itself, unless thewhole design is changed, the output of the speaker will not bemaximized. And also the codec component is also one of theissues that caused the poor sound quality. We were assuredagain and again by Viewcooper that they will fix the soundissues, but it didnt happen. The firmware can further optimizethe quality of the sound decreasing the pitch. They are still inthe process of improving this part.

Battery Life: We were promised 7 days of battery life byViewcooper as you can read up in the Kreyos Specs.pdf.Reasons that the current battery life doesnt last as long asadvertised is (A) the firmware is not optimized, (B) the batterycomponent was kept idle too long in the warehouse because ofthe repeated delays resulting in them losing charge capacity. Inthe battery specs sheet, it specially mentioned that if it is notbeing used, it needs to be charged every 3 months, to avoidlosing charge capacity.

Firmware: We are still pushing for the Viewcoopers FWdevelopers to fix known issues. Updates will be posted to theserver from which you can download and update your watch.We are also going to allow users to update the watch from thecomputer using the charger.

https://www.dropbox.com/s/mxsnk6djhsybuk5/Kreyos%20Specs.pdf?dl=0

Windows APP: Our developers are still working on this, buthave hit a roadblock as we have issues with the protocols thatViewcooper provided to our team, as per Nikka has mentionedon Facebook.

Kreyos Custom: It has come to our attention that one of ourbackers has been working on a new firmware. We will beworking closely with him to see if we can help out in anyway.

Refunds: The only reason why we wont be able to refund anymore orders is because we are not financially capable of doingso, we are burned/cheated out of all the funds, we dont evenhave money to continue running our office operations norpaying our employees. After we finish shipping to backers wewill be wrapping up and shutting down Kreyos as a whole.

CONCLUSION:

If we were ever planning to run away with the money in the firstplace, why even bother continue running the company till now,or even borrow money from investors, friends and family justso Kreyos can continue running, or spending money to goexhibit on CES, flying back and forth to China endlessly just tomake sure things are moving. We didnt work so hard just tomake it a failed/scam campaign, we want it to be a success fromthe first day we launch our campaign. I took a ALL IN mindset

if not I wouldnt have invested so much time and money onthis.

After our IGG launch, we were constantly reached out to byhuge companies who wanted to sign us up on retaildistribution, partnerships, distributors who fly in from all overthe world just to discuss exclusive distribution in their country.

To wrap things up, Kreyos is really done, our reputation isalready shot beyond redemption and I wish we could providefurther remedies, fixes and refunds, but the lack of availablefunds wouldnt allow us to do so. We did all we can up to thispoint.

It has been a extremely tough journey during these 2 years. Wethank you all for your support, and we are very upset that wewerent able to hit our expectations of this product and also notable to continue working on Kreyos. My team and I really didour very best salvaging whatever we can but ultimately it didntwork out well due to Viewcooper, if they are willing to even usethe actual amount of money for what we paid for, things mighthave turned out really different for Kreyos.

WHAT WE WILL BE DOING:

Releasing all source codes, documentations available until1.

now for the Firmware, iOS, Android and Windows Phone 8apps as open source either in Github or BitBucket. Will postupdates when ready.

Kreyos will shut down all operations worldwide by end ofSeptember 2014.

WHAT VIEWCOOPER WILL BE DOING:

Viewcooper will continue to provide updates and fix knownfirmware issues.

Viewcooper will provide exchanges for waterlogged watchesand quality issues. Please contactexchanges@viewcooper.com for exchanges.

Thanks for your time in reading this!

- Steve

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WRITTEN BY

Steve Tan

https://medium.com/@stevekreyoshttps://medium.com/@stevekreyos