JustLight in Ann Arbor faces creditors pushing it into liquidation

0

The founder of a struggling Ann Arbor-based infrared light therapy device maker says his creditors are trying to force him into liquidation because of soured relationships and a battle over intellectual property.

Creditors say they just want out after investing more than $1 million in a startup vision that didn’t materialize.

An involuntary Ch. 7 bankruptcy petition was filed last week against Archimedes Innovations PBC – doing business as JustLight – in US Bankruptcy Court for the Eastern District of Michigan in Detroit.

It is the second time since late April that a forced liquidation has been attempted by a group of investors linked to a former CEO of JustLight and the Auburn Hills-based auto supplier Eypex, which had been contracted to manufacture the therapy devices. .

The second bankruptcy petition also follows a lawsuit filed by JustLight founder and CEO Peter Forhan against Eypex in May, alleging the supplier withheld products, design files and software that were preventing the startup to do business.

“While Mr. Forhan may be a visionary, that ‘vision’ does not appear to include running his business in a manner reasonably calculated to pay its uncontested obligations,” according to the bankruptcy petition filed by Brooks attorney Matt Wilkins. Wilkins Sharkey. & Turco SARL. “Noteholders’ notes are in default and the company, despite numerous promises, has offered no credible pathway as to when this could possibly happen.”

Forhan argued otherwise.

“I don’t think that’s true,” Forhan told Crain’s in an interview. “I think the viability of a photobiomodulation device is an incredible path.”

Wilkins declined to comment on the matter.
The company says its technology focuses on delivering infrared light “at the right frequency and location for the optimal amount of time,” improving cellular function, a process “crucial to the health and well-being of the human body. “.
The idea, Forhan told Crain, is that light helps the body produce energy, although he acknowledged that this belief may run counter to broader scientific consensus.

The “vast majority” of Americans get “too little sun each day,” Forhan told Crain’s. “Getting more sunlight, especially in the morning or evening, will ‘directly increase your body’s energy levels,’ according to the founder.

“You will improve every health metric,” Forhan said. “And it will help prevent degenerative brain diseases, including Alzheimer’s disease, (and) many other degenerative diseases.”
Before the lawsuits fizzled out and relations soured, the startup and automotive lighting supplier teamed up to try and come up with an idea inspired by UV light to change the pain relief game. .

Forhan, who earned a bachelor’s degree in materials science from the University of Michigan in 2018, founded JustLight in 2020 after a few other startups, including a UV sanitizer for hands and phones during the COVID-19 pandemic. .

JustLight’s flagship product is the Sunflower, a lamp-like device that emits infrared light intended to relieve joint and muscle pain, according to the company. The JustLight website lists them for sale at $1,100 each.

After developing the technology, Forhan worked to move to mass production raising approximately $3 million, primarily through convertible equity notes with a 20% discount and no cap on value.

Share.

About Author

Comments are closed.