The company backed by Erik Trump failed to pay its employees on time after a $4.6 million loan was granted to its CEO

U.S. startup Foundation Future Industries, backed by Erik Trump as an investor and adviser, delayed paying employees’ salaries at the end of October, according to CNBC. The San Francisco-based company develops robots with military applications and reportedly did not have sufficient cash to pay its employees.

The financial problems emerged after the company’s chief executive and co-founder, Sankaet Pathak, allegedly borrowed $4.6 million from the company’s funds. The sum was reportedly used to purchase a property in Sausalito, California, in October 2025. Pathak is the principal shareholder and the sole member of the board of directors, a structure that has raised concerns about the startup’s governance.

In a message sent to employees, the CEO said he was trying to secure the funds needed to pay the outstanding wages. The company had also delayed salaries in August, by approximately two days at the time.

Erik Trump was reportedly not involved in the company’s management or operations, according to a spokesperson. Foundation is seeking to attract investments worth hundreds of millions of dollars and is preparing the Phantom MK-1 military humanoid robot. The startup had previously also faced criticism over alleged Pentagon contracts, information later qualified by sources cited by CNBC.