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Smach Z on the road to becoming vaporware as Smach claims to be on the verge of bankruptcy

Smach has admitted that the Smach Z is unlikely to ever reach its backers. (Image source: Smach)
Smach has admitted that the Smach Z is unlikely to ever reach its backers. (Image source: Smach)
Smach is on the verge of calling time on the Smach Z, nearly five years after taking it to Kickstarter. According to its founder, Smach is on the verge of bankruptcy, despite receiving over US$1 million from two crowdfunding campaigns.
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In August, we predicted that it might be the end for the Smach Z, the handheld console that launched on Kickstarter in October 2016. Subsequently, Smach reached out to us and insisted that it was 'very close to ship[ping]. However, it did not 'want to talk about dates' because of pandemic-related uncertainty. Smach invited questions from us, but it never responded to any of our emails, the last of which we sent in January.

It turns out that Smach has run into some serious problems, so serious that it believes 'the chances are low' of the Smach Z shipping. You can read Smach's statement below, posted by its founder, Daniel Fernandez.

Hi everyone,

Today we have tough news to share with you, and we think it's better for everyone to be as clear as possible from the very first paragraph: we have lost the private inversion that was sustaining this project and, as a consequence, we might soon enter bankruptcy. Before getting into details and stepping into how the future looks for us, we have a few things to say.

This project kicked off thanks to all of you, thanks to your support on platforms like Kickstarter and Indiegogo. For that, we will always be grateful, the entire team. We became, literally, the most successful Kickstarter in the history of our country. It is fair to say it has been a pretty surreal journey. With an uncertain future in front of us, we really want to thank all of you: without your support, we couldn't have started all of this. Again, from the entire team, thank you.

Even though the funds we collected in Kickstarter, Indiegogo and later on our own website helped us to start the journey, the project was way more ambitious than the budget we were managing. Because of that, the project kept going thanks to the public aid by our government and, mostly and foremost, private inversion. Unfortunately, after a few missteps, the investors felt forced to decide to stop supporting the project. There are a few key reasons we would like to explain to you:

The covid pandemic. We don't want to blame it as the sole cause, but the timing was extremely bad for our project, to put it blandly. We were just arranging the last details of production when it started, forcing us to change production partners from China to Spain, resetting key production elements. After that, the company felt forced to start an ERTE (a measure from the Spanish Government to help companies survive), meaning we reduced our workforce… considerably. For us, the mentioned ERTE lasted almost for one year and a half, due to the lack of funds. Because of that, since then, we have been moving things forward being 3-5 workers.

Before starting production, we were proceeding with a final testing in a CE certification laboratory, and any emissions test failed, driven from the charger even though the manufacturer had certified it. The defect in question was never resolved by them. It was another unexpected issue that halted production once again, meaning more funds were needed until it was fixed. It was not too serious or difficult to resolve, but again it was a new problem at a critical moment.

During the assembling and testing of the first 200 units, problems related to the final batteries were found; we have not been able to determine or solve them and, therefore, an analysis by an external technical expert team is required. When the device has a load of less than 10% and the charger is plugged, a heating occurs in the batteries. This increase of heat activates automatically the system protection, which stops the batteries to avoid degradation, leading to a shut down of the system. Even if we turned off this automatic protection, the batteries would degrade sooner than expected, reducing their full charge in a matter of months, so that was not something acceptable for final units.

After all, more than a specific cause, the continuous delays of a project that had still not caused clear revenue, along with the pandemic landscape, made the investors decide they didn't want to keep supporting the project. They are on their right to do so, and we want to make something very clear: we don't want to blame anyone in this update. We are glad for their support all this time, as well as we are to all of you.

Does this mean your device will never come out? As hard as it is to say it, we think the chances are low. We have a few months to look for new investors until declaring bankruptcy; if we are able to find them, we might have the necessary funds to, at least, produce your devices. And from there, whatever comes next. However, we want to be clear about our current situation: the future looks tough for us, even more in the current economic landscape. Being at the current time a team of 3, we are doing our best to focus all our strengths into looking for a way to make this happen.

What about refunds? If we finally declare bankruptcy, then all the resources obtained by selling our remaining assets will move towards your refunds. Please understand that there are priorities to follow; for example, direct customers from our website will be refunded first, and so on. We have been refunding for a very long time, but those refunds were emitted thanks to the private inversion. As you know, we haven't been able to keep refunding these last months for the same reason, and as we hope you understand, right now we are not able to keep refunding you either.

This is our current situation. We have tried to be as clear as possible. We are attaching a form for all of you to track all the refunds inquiries, please take a look and feel free to fill it out, considering that at this point we can not promise you any specific date or amount refunded:

We are all well aware that the scope of the project was too ambitious for us, way more than we anticipated. The project started off on the wrong foot, as we were scammed by ImasD (the lawsuit is still ongoing), forcing us to raplan everything from scratch and assume command of the project, with the handicap of having 200K less that was in ImasD's bank. It has not been easy to deal with the different providers and this project required a lot of external work. We often found issues, delays and over costs. The most remarkable has been the plastic molds that have passed by 3 different molding companies until bringing them from China to Spain. The electronic design and BIOS development have not been easy either. With very few exceptions, the external providers have to focus on their own interests, requiring a huge amount of time, effort and fights to move tasks forward.

This high dependency of external providers, dued to our lack of experience in the industrial sector, together with the very limited resources that we had and a big component of bad luck in key moments, have definitely brought the project to this situation.

We know we have failed, over and over, to commit to the communication goals we were stating. We are very sorry for that. We can say we have tried our best, and we are still glad we started this journey with all of you, for real. We have learned and grown. And as we have mentioned before, we are still doing everything we can to move this forward. There is still a hope that the project can continue somehow, but it's a possibility that we can't trust at this point. In any case, if that possibility finally arrives, we will fight for it and tell you.

We understand that from your point of view you will be angry with us, we can only say that we did all we can with the best intention and efforts. We can guarantee that all the money raised has been dedicated exclusively to cover the project costs. The company has been audited by an external entity, and we can show the certification. Also, as you can imagine, in order to get financial support from the government, we have passed strong controls and requirements. Our investors have lost much more money than the money raised in the crowdfunding campaign. So there is nothing weird or dishonest, just a project that has failed, we're very sorry for that but we hope that you can understand it.

We will continue to inform you about all the process, evolution of this situation and possible solutions. Please, feel free to send proposals or ideas that you may have to save the project. We really hope that, along the way, we have achieved to share some of our passion and joy with all of you.

Even more than ever: thank you all for your support, your trust and your patience.

SMACH Team.

Smach managed to ship a prototype device to The Phawx, which he reviewed in 2019. The device's hardware is now so out of date that it renders it almost irrelevant. Hopefully, Smach issues refunds to as many backers as possible.

Purchase the GPD Win 3 on Amazon

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Alex Alderson
Alex Alderson - Senior Tech Writer - 4265 articles published on Notebookcheck since 2018
Prior to writing and translating for Notebookcheck, I worked for various companies including Apple and Neowin. I have a BA in International History and Politics from the University of Leeds, which I have since converted to a Law Degree. Happy to chat on Twitter or Notebookchat.
contact me via: @aldersonaj
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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2021 05 > Smach Z on the road to becoming vaporware as Smach claims to be on the verge of bankruptcy
Alex Alderson, 2021-05-14 (Update: 2021-05-14)