It sounds like your friends collectively invested $100k and now whats left is 1% of that. Maybe spend the $1000 on a pity party - I'm being serious - throw a dinner party inviting your investors, explain what happened and that all that's left is the meal and celebrate what you learned along the way. Maybe to soften the news have an agreement drawn up that the code/product would be in "escrow" for you and your co-founder and if you spin it back up again/pivot they're still "in".

Curious what business sector your SaaS was in that it was impacted by the pandemic.