A venture capital partnership plans to buy Luna Innovations Inc., a tech company whose time in Roanoke ended with a multimillion-dollar class action settlement on civil securities fraud allegations.
Luna, which develops fiber-optic sensing and monitoring equipment, announced on Friday a signed agreement in which New York City-based TJC LP will acquire the company in full for $1.39 cash per share, as first reported by investment publication Seeking Alpha. The agreement comes about four months after a federal judge in Los Angeles approved a $7.3 million settlement in a class action suit against Luna and three former executives.
Plaintiffs had alleged that the company and its leaders committed securities fraud related to accounting errors that left Luna unable to file quarterly and annual reports with the Securities and Exchange Commission. Under the settlement terms, none of the defendants admitted to the accusations.
The TJC acquisition might answer questions about those errors, according to Luna’s announcement.
A proxy statement that the company will provide to stockholders “will include financial statements for the fiscal years ended December 31, 2025 and 2024 and the interim period ended March 31, 2026,” the statement read.
It was the company’s admitted accounting errors and inability to file quarterly and annual reports with the SEC that led to a precipitous drop in Luna’s stock price on the Nasdaq Stock Market, from a high of $8 a share to about half that during March 2024. More than 30 million shares were outstanding at that time, according to court documents.
Luna stock was delisted from the Nasdaq and relegated to the OTC Expert Market, where only broker-dealers and professional-level investors are allowed to view quotations. It was trading at about 30 cents a share in March 2025, but was listed at $1.28 on Friday afternoon.
In SEC filings beginning in March 2024, the company reported that quarterly and annual financial reports were unreliable, with “material weaknesses” in Luna’s “internal control.” Six quarterly reports and one annual report were never rewritten, and the company did not file any such statements with the SEC after fourth quarter 2023.
The SEC filings indicated that an investigation “identified accounting errors relating to revenue recognition” dating to 2022. Under federal law, companies must recognize revenue during the time that they deliver products and services to customers, not necessarily when the customers pay them.
Plaintiffs blamed former Luna President and CEO Scott Graeff, along with former financial officers Eugene Nestro and George Gomez-Quintero. Graeff resigned in March 2024, shortly after the first SEC disclosures. A special committee of board members and outside legal and financial advisers later announced a finding that Graeff had engaged in conduct that constituted “cause” under his contract. The company canceled his severance payments and took back stock from him.
The plaintiffs alleged that the company was responsible for its executives’ actions.
New York City-based White Hat Capital Partners issued Luna a $15 million loan in July 2024, with terms that required Luna to seek a sale or merger. According to Friday’s announcement, White Hat Capital and its affiliates, who represent about 25% of shareholders’ voting power, have agreed to the transaction.
The majority of voting shareholders must approve the transaction, and Luna will hold a special meeting to vote on the merger, which the company expects to close later this year. Until then, Luna’s business will continue as usual. Afterward, the company will operate under TJC’s umbrella.
TJC, formerly known as The Jordan Company, is headquartered in New York City, with offices in Chicago, Miami and Stamford, Connecticut. The more than 40-year-old group was managing $31.9 billion of assets as of April, according to the announcement. According to its website, its portfolio is about 13% digital and power infrastructure and 9% industrial technology, with 14% focused on consumer products, including Bojangles and AriZona beverages.
“We believe this combination strengthens our commitment to our loyal customers and provides greater opportunities for our employees and suppliers,” Luna President and CEO Kevin Ilcisin said in the announcement.
Emails and voice messages left for Luna and TJC were not returned on Friday.
Luna, which was headquartered in Roanoke, is now based in Blacksburg, where it was founded in 1991 and retained some operations.
