Loading
LumaStream, a St. Petersburg tech company that has spent a decade working on direct current, low-voltage LED light systems in an effort to disrupt the 140-year-old lighting industry, has filed for Chapter 11 bankruptcy protection. One of the key lessons is an old business truism: Capital is everything — even when your product is well-received.
In a Feb. 5 statement, the company — which holds 24 patents and whose clients include automaker Tesla and fast-casual restaurant chain PDQ — says it will undergo financial restructuring and reorganization “to solidify and enhance our financial position, meet obligations to all stakeholders and emerge stronger than ever.”
The move was precipitated by a $3.9 million lawsuit against LumaStream that was filed, and won, by investor and former Board Chairman John Glasscock. The judgment exceeds LumaStream’s total revenue for 2019, which was $3 million.
However, LumaStream Chairman Eric Higgs, who founded the company in 2009, told the Business Observer in December 2019 that he had already been looking for a buyer or strategic partner that could help stabilize the firm’s cash flow and move it toward profitability.
“Our ability to expand our product line and execute our core strategies has been cash constrained,” he writes in a Feb. 12 email to Coffee Talk. “After 10 years, we are finally becoming a recognized and viable lighting solution.”
But, Higgs adds, “financing this mammoth undertaking has been a struggle.”
Higgs and CEO George Gordon have decided to stop accepting purchase orders while LumaStream goes through the bankruptcy process, but they say they will work to fulfill all open orders and continue to provide remote support to existing customers. “We have taken proactive steps to protect our core business while we restructure our financing,” Higgs writes.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
