Computer backpack manufacturer OK Computer announced it was going private on Friday, bringing its business to the brink of bankruptcy and closing a $3 million fundraising round that helped it turn around its troubled product.
OK Computer’s founder, John McDonough, and a group of investors, including former AOL executive Steve Case and billionaire tech investor Dan Loeb, plan to return the money to the company and keep it focused on its research and development, the company said in a statement.
The move comes a month after OK Computer was the subject of an SEC investigation over its marketing materials.
The SEC investigation came after OKComputer was one of several tech startups that were accused of misleading investors about their products.
The companies accused OKComputer of misleading them about the potential use of its technology, as well as misleading consumers by falsely portraying its computers as more powerful than the products that consumers were buying.
OKComputer’s investors included former Microsoft executive Steve K. Lawler, who founded the investment firm D.O. Shaw, and former Facebook chief operating officer Tony Bates.
The fund’s new owners are a group led by Case, who has also been an investor in OK Computer, as he seeks to take the company public.
OKC Technology said in its statement that it would be liquidating its assets in an orderly fashion, and the company would also be donating the remaining $3.6 million it raised in the deal to OK Computer to help with its research.
“We appreciate the continued support of the OK Computer community,” OKC said in the statement.
McDonaugh said in his announcement that he planned to keep the company’s headquarters in Silicon Valley, where he built OKC Computers, and to focus on the research that goes into its products.
Mc Donough said he hoped to use the money he received to further the company.
“It’s a really exciting time to be in this business,” Mc Donaugh said.
“There are a lot of companies out there that are really going to be struggling with the same problems we’re facing, and we are going to make it easier for people to get their next product or product innovation.”
OK Computer has also hired more than 100 new employees since the end of February.
In March, McDonugh was one a key part of the company that created a virtual reality headset for Oculus, which was later acquired by Facebook.
The company’s Oculus Rift headset, which costs $600, has been criticized for being too expensive and not allowing users to move around in virtual worlds.
“The fact that I can talk to you is really amazing,” McDonigh said in an interview.
“I don’t want to say it’s the first time, but the fact that you can do it in a virtual world, I think that’s really the most exciting thing I can say.”
The deal with McDonoys was announced on Facebook’s website.
It said the $3 billion in equity was to be used to continue to expand the company as it goes forward.
“Our mission is to develop the next generation of smart computing technologies that will transform our lives and the lives of millions of people around the world,” the company wrote.
“As part of this mission, we will also continue to make investments to expand our operations and accelerate the company in its quest to make its vision a reality.”