$7m actually isn't a whole lot, especially if they hired a (larger) engineering team. Assuming their cali based, that's easily 150-200k per engineer, a team of 20 easily eats through that. Idk the specifics, but I don't the organization was fradulent, it could also be that they're going commercial and no longer want to maintain their oss stack

We raised in 2024 and only burned through ~$3m of it, mostly on salaries to support a small team.

And AI tokens

Those Claude tokens are not cheap you know /s