Rohinni Inc., a Liberty Lake-based LED manufacturing company, has filed for liquidation under Chapter 7 of the U.S. Bankruptcy Court after reporting a 96% drop in revenue in 2023, court filings with the Eastern District Court of Washington show.

A Jan. 17 court filing shows Rohinni had over $5 million in liabilities and assets worth $40.4 million, including $128,000 held in bank accounts at Wells Fargo. Many of those assets, however, are intellectual property rights that are tied up in exclusive-use agreements with a Chinese joint venture company.

Rohinni is the second Spokane-area tech company to fall in recent months. In December, Kaspien Holdings Inc. announced plans to delist its stock voluntarily from the over-the-counter exchange it had been trading on and wind down operations in an attempt to avert a bankruptcy filing. 

At Rohinni, several factors are attributed to the company's Chapter 7 filing and closure, says Steve Rector, chief financial officer and treasurer at Cowles Co., a Rohinni investor.

"In simplest terms, they just ran out of sources of capital ... and couldn't find a path to continue to fund their operations," Rector says in a email response to questions from the Journal.

Specifically, contractual exclusivity agreements limited Rohinni's ability to sell its intellectual property assets to other parties, plus there was a significant decline in the demand for displays in China, where the company had focused on new business partnerships and activity.

The company's decision to pivot from technology licensing to designing and manufacturing equipment was another factor behind Rohinni's filing, says Rector.

The company's intellectual property includes over 100 issued patent assets, three copyright registrations, and 13 active trademarks valued at $2.1 million, according to court filings. 

"(Rohinni) had to deal with intellectual property risks in China with a very limited customer base that had most of the (intellectual property) tied up in a joint venture," Rector says. 

It's unclear what will happen to Rohinni's patents during the bankruptcy proceedings, says Rector, adding that Cowles has the potential to end up with the assets as a secured creditor in the bankruptcy.

Cowles Co. is one of Rohinni's 15 creditors and is owed $4.5 million, court records show. Cowles also owns the Journal of Business through a subsidiary. 

Rohinni's 2023 gross revenue of $137,500 was down 96% from 2022 revenue of $3.4 million, records on file with the bankruptcy court show.

In November 2022, Rohinni CEO Ryan Cameron told the Journal that the 10-year-old micro-electronics development company had been on a "path to profitability by the end of 2024." At the time, Cameron announced a new partnership with BOE Technology Group Co., of China, which had signed a letter of intent with Rohinni to buy hundreds of production machines for use in manufacturing advanced electronic display panels.

Following the launch of the joint venture, dubbed BOE Pixy, the machines were to be mass produced in 2023 and lead to improved sales by the end of 2024.

Bankruptcy filings show the company has an ongoing interest in two businesses, BOE Pixy and Luumii Co. Ltd., for displays, backlights, and keyboards. 

Rohinni has a 35% share of BOE Pixy, valued at $32.9 million in addition to a 15.8% ownership in Luumii, valued at $2.3 million, according to court records.

Luumii was formed in 2016 from a joint venture between Rohinni and Taiwan-based computer and equipment manufacturer KoJa Cayman Co. Ltd., the Journal  previously reported.

"This Chinese-based joint venture partner was one of the largest display manufacturers in the world, but also saw a huge drop-off in the display market," Rector says.

A request for comment to Rohinni's communications coordinator Kinzie Ridgewell generated an automated response that states, "Unfortunately, Rohinni has ceased operations and filed for Chapter 7 bankruptcy as of end of day 16 January 2024."

Some Rohinni executives and board members didn't immediately respond to requests for comment, but Rector confirms that 10 employees were laid off in January. The company had a staff of over 20 people in November 2022.

Other creditors are owed a total of over $570,000, including investment company Amalfi Investments LLC, of Fort Lauderdale, Florida; Davis Wright Tremain LLP, a Seattle law firm; Spokane Valley-based commercial HVAC contractor Divco Inc.; Coeur d'Alene-based internet provider Intermax Networks; IT Savvy LLC, an Illinois-based information technology company; individual John Stone, of Coeur d'Alene; Moss Adams LLP, a Seattle-based accounting firm with a Spokane office; and Zayo Group LLC, a Dallas-based communications and network solutions company. 

A handful of companies including Spokane-based Avista Corp. are listed as creditors but aren't owed any funds at the time of filing, court documents state.

Cameron and two additional Rohinni executives, chief financial officer Geoff Rowand and chief technology officer Justin Wendt, received over $840,000 in compensation for salaries, benefits, reimbursement, and a bonus in the year prior to the bankruptcy filing, court statements show.

Rohinni's 28,200-square-foot plant at 23221 E. Knox, in Liberty Lake, is available for lease, according to leasing information from Spokane-based real estate brokerage Kiemle & Hagood Co.'s website.

To its credit, Rector says, Rohinni kept investors updated on the financial trouble it experienced throughout last year, so the bankruptcy didn't come as a surprise.

"It is a very unfortunate situation," he says. "(Rohinni) just fell victim to the circumstances of the headwinds of 2023."

Despite the timing of the Rohinni closure and the winding down of Kaspien, Rector says Spokane's startup landscape remains vibrant.

"I think Rohinni and Kaspien are apples and oranges," he says. "Rohinni's bankruptcy was a result of circumstantial strategic limitations in its business and challenges in markets it was attempting to serve."

Kaspien was founded in 2008 as Green Cupboards, which was rebranded to etailz Inc. in 2013. In 2016, the company was acquired by New York-based TransWorld Entertainment Corp. for $75 million, as previously reported in the Journal.

"Kaspien was a successful Spokane startup that was ultimately acquired by a larger public company, which created success for the local Spokane investors," Rector adds.