A White Plains artificial intelligence start-up that has created technology that simulates conversations with dead people has filed for bankruptcy protection to stave off corporate death.
StoryFile Inc. declared $1.5 million in assets and $10.5 million in liabilities in Chapter 11 documents filed on May 5 in U.S. Bankruptcy Court, White Plains.
StoryFile is a “start-up with unproven but highly promising technology and business model,” interim CEO James Fong stated in an affidavit. But “despite additional fundraising and new revenue streams … StoryFile [has] continued to hemorrhage cash.”
StoryFile uses video interviews and archival footage that focus on an individual’s skills or experiences. Videos are structured in a question-and-answer format, and the technology clones the individual’s voice, eye movements and gestures.
The idea is to simulate face-to-face conversations.
A new employee, for example, can click on a CEO’s video and ask questions. A family member can click on footage created before a loved-one died.
The technology quickly sifts through the recorded videos and creates an appropriate answer that also conveys the personality of the CEO or the dearly departed.
Conversational video artificial intelligence “lets you have a real-time video conversation with anyone — even if they are not present,” StoryFile stated in a 2023 white paper. “It provides the ability to talk to a President, a favorite artist or sports personality.”
StoryFile was founded in 2017 in Los Angeles. It leases offices there and on South Broadway in downtown White Plains.
It grew rapidly in 2021 and 2022 with seed money from the founders’ friends and family,” Fong states in the affidavit. But focus on growth exceeded the funding. Now it needs to restructure its financial obligations “and find a sustainable path forward.”
StoryFile owes about $4.5 million to unsecured creditors. That includes $2.2 millions in loans from two individuals, $1.1 million in legal fees, $1 million to vendors and suppliers, and $150,000 for refunds.
It has three secured creditors: Key 7 Investment Co., $1.25 million; Blythe Global Advisors, $139,000; and the U.S. Small Business Administration, $126,000. Key 7, of Birmingham, Alabama, claims it is owed nearly $2 million, not $1.25 million, in a breach of contract complaint filed in February in Alabama federal court.
Despite the financial stresses, Fong is optimistic.
“I believe StoryFile has sufficient … business and opportunities for future growth,” he states in the affidavit, “to fund a plan for reorganization and emerge from the Chapter 11 process successfully.”
