CHAMPAIGN — A Champaign-based tech firm once listed by Inc. magazine as one of the nation’s top 1,000 fastest-growing companies has filed for bankruptcy protection.
EP Technology, which was founded in 1997 and sells video security equipment, said Amazon and Walmart would no longer sell $15 million of goods because they needed software upgrades.
“The Debtor filed for bankruptcy mainly because of cash flow impairment issues caused by approximately $15 million worth of goods needing software upgrades in order to be saleable,” the company’s lawyers wrote in September. “The Debtor learned over the last 30 days or so that Amazon, Walmart and ASI could not sell the subject products because of a problem with the software that had been downloaded into the products, and that these customers were going to return the product.”
It expected that over the next few months, the product will be returned to the company’s warehouse in Champaign to be upgraded to new software.
“In the past, the product likely would have been returned to China for upgrading, but as a result of recently imposed tariffs that would be applied if the product were shipped to China for upgrading and then returned to the United States, the Debtor believes the most economical option is to upgrade the subject product in its Champaign facility,” the company wrote.
Once the software is upgraded, EP Technology thinks it will then be able to sell the products again, and the company was optimistic it would emerge from bankruptcy.
“The Debtor recognizes that its cash collections of late have not been good, but believes that is due to several factors that will be resolved given sufficient time,” it wrote. “Indeed, the Debtor filed for bankruptcy relief, in part, to obtain a breathing spell so that it could work through inventory, collection and tariff issues that have negatively impacted its business recently.”
The company, which declined to comment, had $215,000 cash on hand when it filed for bankruptcy and at the end of November that had increased that to $376,000.