The 8-year-old company, which makes software for scanners and photo editing, voluntarily filed for protection from creditors yesterday in U.S. Bankruptcy Court in Santa Clara County, California. Under Chapter 11, a company continues to operate while it draws up a debt-repayment plan.
"The petition allows us to buy some time to reorganize our finances," said Carol Kruse, vice president of sales and marketing. "Our plan is to move through Chapter 11 as quickly as possible and emerge as a recapitalized Storm."
"We've been caught in the price wars and had a liquidity problem," Kruse said, noting that color flatbed scanners have fallen from $99 to as low as $19 this year.
Executives said the business was "adversely affected by increased price degradation in the personal scanner market" when the company reported a second-quarter net loss of $6.1 million, or 49 cents a share.
Stock in the company closed more than 56 percent lower today at 7 cents a share. Shares have traded as high as 3.75 and as low as 4 cents in the past 52 weeks.