Blacksburg-based technology company Luna Innovations Inc. has completed its sale to a private equity company.
TJC LP has acquired Luna for $1.39 cash per common share in a deal that was announced in June and took effect Sept. 18.
The closing marks the end of a troubled chapter for Luna, which develops fiber-optic sensing and monitoring equipment. The company, which formerly had its executive offices in Roanoke, lost its spot on the Nasdaq Stock Market, deregistered from the Securities and Exchange Commission and was subject of a class-action lawsuit after accounting errors left it unable to file quarterly and annual reports with the SEC.
A California judge in June approved a $7.3 million settlement in the suit against Luna and three former executives, in which plaintiffs alleged securities fraud related to the accounting errors. In the settlement, none of the defendants admitted wrongdoing.
New York City-based TJC and Luna signed a sale agreement in June; it was approved in early September by a majority of voting Luna shareholders.
Luna, founded in Blacksburg in 1991, was trading at about $8 a share on Nasdaq in early 2024, with more than 30 million shares outstanding, when it admitted its accounting errors in SEC documents. By March of that year, the shares had lost half their value.
Trading moved to the restricted OTC Expert Market after the Nasdaq delisting, and it dropped to about 30 cents per share a year after Luna documented improperly reported payment dates going back to 2022. With the merger’s completion, further stock trading on the OTC Expert Market was suspended, according to a Sept. 22 TJC news release.
Luna’s management team turned over in 2024, with Kevin Ilcisin eventually becoming president and chief executive officer. According to the news release, TJC plans to continue working with the team in place at Luna.
“We are excited to begin our partnership with Kevin and the entire Luna management team,” TJC partner Robbie Redmond said in the release. “Luna’s dedicated employees have built a remarkable foundation in fiber optic-based measurement technology, and we look forward to investing behind their leadership — supporting the team as they scale the business, advance their product portfolio, and deliver even greater value to the customers who depend on Luna.”
TJC, formerly known as The Jordan Company, managed about $31 billion of assets as of July, according to the company’s news release.
At least one legal hurdle remains for Luna. On Sept. 1, the day before voting shareholders approved the merger, lawyers for an entity called AB Value Partners LP filed suit against Luna in a Delaware court. The case was first reported by law360.com.
The suit states that it owns 1,000 shares of Luna stock and that it twice reached out to the company to examine books and records to determine whether common shareholders were shortchanged by the sale and what role Luna investor White Hat Capital Partners had in the transaction.
Luna was unresponsive to the partners’ request, according to the suit, which was filed in the Delaware Court of Chancery because the company is incorporated in that state.
New York City-based White Hat issued Luna a $15 million loan in July 2024, with terms that required Luna to seek a sale or merger. White Hat and its affiliates, who represent about 25% of shareholders’ voting power, agreed to the merger, Luna said when the sale to TJC was announced.
AB Value Partners’ suit states that multiple loan amendments increased the balance to about $32 million. TJC’s purchase proposal was $220 million, according to the suit.
Owners of the 39.3 million common shares would divide $54.7 million. Much of the rest would be divided to pay for White Hat’s 2.7 million common shares and 55,500 preferred shares, the latter worth at least $101.3 million, according to stockholder materials cited in the lawsuit.
The plaintiffs seek documents on preferred payments, secured-debt payoffs, transaction expenses, liabilities and common-stock allocation, to evaluate whether company officials “acted on an informed, disinterested basis when allocating value among White Hat, other creditors, transaction participants, and common stockholders,” according to the suit.
A clerk in the Wilmington, Delaware, courthouse said Friday that there had been no response from Luna nor any ruling from a judge in the case. Lawyers for AB Value Partners and Luna did not respond to requests for comment.
