I'm guessing something similar, they were had by the Chinese company supplying the iem. I'm also guessing they had no recourse against that company, could not get them to remunerate them or take them back. At that point, admitting they are not what LH Labs had promised would put LH Labs liable for the headphones, a kids they might not have been able to absorb. Of course, this is all guessing, I have no clue if it is true. But, I'm sure LH Labs, which prides itself on presenting the best sound, creates TOTL/SOTA gear, would NEVER want to be in the position of marketing inferior sounding gear, and this is the only scenario that makes sense to me (there are probably others, but I haven't come up with them yet).