Ingenu Inc bankruptcy was filed under Chapter 11 on July 27, 2020 in San Diego. Ingenu Inc’s current business is an “Internet-of-Things” (IOT) network. It hopes to deploy these new networks in major cities around the world. It apparently has an IOT network running in the Dallas Fort Worth area for which the company claims a successful proof of concept.
Unlike most recent bankruptcy filings, the Ingenu Inc bankruptcy seems to have nothing to do with pandemic shutdowns. Rather, it appears that the company’s former CEO, Tom Horn, fell short of the entrepreneurial vision he sold to investors and lenders. Current CEO, Alvaro Gazollo, is apparently trying to keep the company alive long enough to find a profitable exit strategy– hence the Chapter 11 filing.
Ingenu Inc (originally On-Ramp Wireless, Inc.) has raised $123.6 million from investors since 2008. The company was originally launched as a power grid management technology, but this initiative failed to generate revenue.
In 2015, the company was rebranded in a shift of focus to the newly-emerging Internet-of-Things market. Ominously, the company has apparently not raised a major funding round since the rebranding.
The Ingenu Inc bankruptcy lists $55,438,074 in liabilities (to 247 different creditors) against only $1,501,022 in assets. However the big unknown asset value lies with the company’s patent portfolio, which is listed at an unknown value. Whether this set of patents, some of which cover the IOT space, is valuable enough to rebuild the company around remains to be seen. If not, auction sale of the patent portfolio, and liquidation, seems likely.
In the meantime, the judge in the Ingenu Inc bankruptcy has issued an interim order allowing a super-priority debtor-in-possession financing in the amount of $400,000. However this DIP loan is only intended to cover operating expenses for 13 weeks, of which $88,000 will be used for employee compensation and $258,000 will be used for legal and other professional fees.
It appears from the 13-week budget that Sherwood Partners will likely be tasked with the patent portfolio valuation. (However, the $35,000 budgeted to Sherwood seems inadequate for a complete valuation.) But under any scenario, patent portfolio is the asset that will likely determine the ultimate course of the Ingenu Inc bankruptcy proceeding.
So basically this DIP loan is enough to buy breathing room for the company and its counsel to attempt to find a way forward. In the meantime, creditors are scrambling to recover investments.