Last month, 30-year-old Stratos Product Development closed abruptly.
No explanation was given for the closure, and some wondered how an innovator in product development could so quickly disappear.
Little is known about the events that led to the closure of the product development firm, which has worked on everything from Microsoft Xbox controllers to Apple laptops to Nike sunglasses.
But court documents filed in King County Superior Court last month show that Stratos Product Development is now in receivership, a situation where courts bestow upon a receiver the “power to do all things which Stratos might do.” That includes control over all assets, and the ability to pay bills.
The court-appointed receiver overseeing the Stratos assets is Orse & Co, which is looking to bring in extra revenue by selling off physical assets and inventory from Stratos’ Seattle office in an online auction.
RELATED: Stratos Product Development closes abruptly; clients included Microsoft, Apple and other big names
Court documents list Washington Trust Bank as the sole creditor with a security interest or lien with a value of $1 million and collateral of “all assets.” Stratos owed approximately $1 million in a variety of unsecured claims, taxes and payments to employee wages and other compensation.
Some of the top unsecured creditors include Stratos Product Development Co-Founders Allan Stephan and Michael Nelson as well as TCAM Core Property Fund, the owner of the building where Stratos’ office is located. The largest unsecured creditor is Stratos Product Development’s parent company Stratos Group at more than $325,000.
The company had approximately $160,000 in the bank in various accounts, records show. Accounts receivable totaled more than $861,000, and of that, about $504,000 was unbilled.
GeekWire has reached out to Stratos Group Chairman Harold Kawaguchi as well as multiple Stratos co-founders, former employees and the receiver for further details.
Over the years, Stratos assisted a number of companies on cutting-edge hardware projects.
It helped Intellectual Ventures build a device that stores vaccines without requiring power, an important innovation for third world countries where inconsistent power access can spoil temperature-sensitive vaccines.
It was working with the Bill & Melinda Gates Foundation to make a device that quickly takes in blood, saliva and other samples and diagnoses diseases like tuberculosis and malaria. The device is meant to work in small clinics without consistent access to electricity.
Stratos Product Development is under the larger Stratos Group umbrella, which also includes biotech company Stratos Genomics and medical company Carewave. Kawaguchi told GeekWire last month that Stratos Product Development is in the midst of an “orderly wind down” and emphasized that other Stratos Group entities are not affected.
Going forward, Orse will be required to submit a monthly report to the court that documents all of Stratos’ financial and operational affairs.
Editor’s note: GeekWire is one of the parties with unsecured claims against Stratos.
