A Victoria company’s dream to revolutionize municipal energy use has run into some hard market realities, leaving public investors nationwide in the lurch.
Last month, Streetlight Intelligence (TSX-V:SLQ) suspended operations and laid off its employees without warning.
The company specializes in street lamp technology, notably its trademarked Lumen IQ system, which allows street-light operators to reduce lighting costs through dimming.
Business in Vancouver first wrote about the company in 2008, shortly after it signed a half-million dollar contract to supply 4,000 units to a city in Mexico (see “Company hoping its dim idea has bright future” – issue 985, September 8-15, 2008).
Since then, the company has signed lighting agreements with the Penticton, Manitoba Hydro, Calgary, Kelowna, Prince George and Hydro Ottawa.
Vancouver also bought products from the company, spending approximately $25,000 to install a lamp system in Yaletown.
The system has been functioning without problems for more than a year, said Craig MacKenzie, a superintendent in Vancouver’s traffic and electrical operations branch.
But the city had no idea the company had suspended operations.
“It’s news to us,” MacKenzie said.
In an April 19 statement, Streetlight CEO Vince Krynski said the company was seeking “strategic alternatives” to fund its business.
Calls to Krynski were not returned, and the company’s CFO, Mark Alenius, also declined to comment.
Streetlight’s demise comes after years of public support for its technology.
In 2009, Streetlight received $1.3 million of public money to fund a lighting project in northern B.C.
At the time, former economic development minister Ida Chong praised Streetlight’s technology for its “economic and environmental benefits.”
Later that year, Hydro Ottawa, which provides power to more than 300,000 customers in the capital region, agreed to invest up to $1 million in the company.
Alan Hoverd, Hydro Ottawa’s CFO and interim president and CEO, joined Streetlight’s board of directors.
Hoverd quietly resigned April 6.
The utility declined to comment on the company, but issued a statement saying its investment was “secured through priority rights to all of the assets of Streetlight Intelligence, including its intellectual property.”
Calgary also has strong ties to Streetlight.
In addition to using Streetlight’s technology, Calgary’s wholly owned utility ENMAX Corp. has a 16% stake in the company.
And Streetlight’s chairman is Lee Richardson, the Conservative MP for Calgary Centre.
Penticton electric utility manager Eric Livolsi said he had no idea the company had gone bust.
“I thought they were doing well,” Livolsi said.
Penticton has installed Streetlight’s technology in 70 of its street lamps.
Livolsi said the system has worked well.
He added the company’s suspending operations would have only a minor impact on the city.
Even though Streetlight had ongoing sales contracts, a closer look at its financial statements shows that it has struggled for some time.
Last year, the company recorded $291,506 in sales, while operating expenses, notably general and administrative costs, totalled nearly $3 million.
Streetlight recorded a $3.3 million loss in 2010, and results for 2011’s first quarter didn’t look much better.
On February 1, most of the company’s staff and all of its senior management agreed to defer 100% of their pay until more money could be raised to continue operations.Then, on March 7, the board appointed a special committee to seek out new capital, joint venture with another company or sell some or all of Streetlight’s assets to stay afloat.
The company has yet to announce if a deal to resurrect its operations is pending.
At press time, Streetlight’s shares were valued at $0.01.