"Did anybody do anything illegal ?
Stupidity isn't necessarily a crime."
This looks like a situation to me where they got in over their head; but, in fact, fraud is likely.
First, as soon as he talked about selling additional units to the public, to raise money to ship the original people's units, that sounds a lot like a ponzi scheme. Maybe not illegal since he straight up informed people what was happening.
He apparently said the original $190 was not enough to ship the units, asked some backers for an extra $97, then shipped theirs; fine. Later, he says he can't possibly ship any more, because the total cost for production and shipping was like $235. OK, so $190+$97 is $287. Seems like fraud to claim they neeeded an extra $97 a unit when they needed an extra $45, and not even apply the extra $52 a unit to ship any other people's coolers.
If you watch shows like American Greed, this kind of thing's not too uncommon. A lot on that show are straight-up grifters, they say whatever to get the most money possible then try to split town before they get either thrown in prison on ordered to repay the money. He's not one of them, they would have ran off without shipping a single cooler.
BUT, a lot on that show intend to run a legit business, and simply seem to be unable to admit the deal's scuttled; they have the best intentions but keep assuming that next deal will sort out all the financial problems. They will claim things are going to ship soon (or you'll get your money back soon), just one more issue to work out, just be patient, dragging it on and on until either the money hits $0 with no further cash coming in, or they get arrested or shut down by legal action.