Kairos sues founder Brian Brackeen and says company nearly broke
Kairos founder and former CEO Brian Brackeen is being sued by the company he started, which alleges theft in the form of improper expenses, along with a breach of fiduciary responsibility and interference since his dismissal as CEO in late September, the Miami Herald reports.
A suit filed in Miami-Dade County claims that Brackeen used company funds to pay some $60,000 in personal expenses, and his attached termination letter says that he misled investors about revenues and fundraising. Brackeen denied the allegations in an email to the Herald, and said that he plans to countersue.
Brackeen characterized the situation as a corporate coup.
“Keep in mind, the valuation of the company is $120 million dollars,” he said. “I’ve raised over $13 million. The $60K thing is not only false, it’s ridiculous. I’d just write the company a check for that. You don’t fire a CEO for that.”
The AI and facial recognition firm says that its CFO suggested Brackeen purchase a car, as expenses for commuting by Uber were costing the company too much, and that Brackeen bought his girlfriend a car with company funds instead. When the company stopped making the car payments, Brackeen’s girlfriend threatened to sue. Kairos also alleges that Brackeen charged other expenses, including flights, to the company under false pretences. The suit claims that he “essentially lived off the Kairos credit card.”
The Herald reports that in a letter to investors, Kairos chairman Steve O’Hara says that the company is nearly out of cash, and that its latest funding round raised $6 million, rather than the $30 million Brackeen said earlier this year the company would raise close to by the end of the third quarter. The initial $10 million portion of a Kairos ICO was closed by the middle of July, indicating that it had been funded or was “reasonably likely to be,” according to the website.
The CFO Brackeen clashed with is Melissa Doval, who was appointed to the position in June after being brought in as a consultant in May, and is now interim CEO.
“Our biggest concern throughout all this has been the well-being of our team, because they are the true backbone of Kairos,” Doval said in a statement. “Everyone has been hard at work and thanks to their talent and hard work throughout the transition… I believe the rest of the year and 2019 will be a time for rebuilding and creation in order to bring Kairos into the AI powerhouse we’ve promised in the past.”
The company plans to generate revenue to continue operating with a new product release this week.
Brackeen says that he was terminated with a voicemail, demonstrating pettiness of the action against him, and that the contents of the suit are not trustworthy. He also said that he will share his side of the story in the coming days.