LumaStream, a St. Petersburg company that makes LED lighting systems for homes and businesses, has filed a voluntary Chapter 11 petition for bankruptcy.
The technology company said it filed its bankruptcy petition after John Glasscock, a former chairman of the board of LumaStream, won a final judgment of $3.9 million against the firm.
Glasscock filed a breach of contract lawsuit against LumaStream last year, saying he had loaned the company $3 million through a promissory note issued in May 2016. The note came due in May 2019, when principal and interest were due on demand. When LumaStream didn’t pay, Glasscock went to court.
LumaStream had been marketing itself, which would have provided it with cash to fund a forbearance with Glasscock, a case summary of the bankruptcy filing said.
“The prospective purchase [sic] chose not to proceed with the transaction and the Debtor needed protection from the collection activities that Glasscock indicated he was going to take. The Debtor filed its bankruptcy to allow it to conduct an orderly sale process,” the case management summary said.
LumaStream said it intends to reduce the size of its business and conduct an orderly sale of assets.
LumaStream was founded by Eric Higgs, who developed a unique LED lighting solution that provided better light using less power consumption, according to the filing. The company’s technology is protected by 23 patents. LumaStream’s gross revenue for 2019 was $3 million, the filing said.
LumaStream has raised $24 million from shareholders, from 2009 through 2019, with most of the money raised used to fund engineering costs for the development of new technology as well as funding negative cash flow that is typically experienced by start-up companies, the filing said. Other amounts were used to fund operating shortfalls and the purchase of a power supply company, Power Vector, from eCraftsmen Corp.
LumaStream owes about $2.5 million to eCraftsmen, the filing said. The debt is secured by a lien on certain patents.
A preliminary hearing on the bankruptcy case is set for Feb. 13 at the federal bankruptcy court in Tampa.