SAN MARCOS, Calif. (BRAIN) — Mountain bike brand Eminent Cycles, LLC has filed for Chapter 11 bankruptcy protection.
The company lists debts of $1.4 million and assets of $139,000. The secured debt includes $320,000 that company founder and president Jeffrey Soncrant loaned his business in 2018; $640,000 invested by Humberto Zavaleta, a Philadephia man described in court documents as Soncrant’s father-in-law; and $448,000 owed to Stella Mondo, LLC. Stella Mondo is a San Diego company formed by Kevin Sigismondo, an industry veteran whose LinkedIn profile says was a founder of Eminent and of Valiant Components.
According to court filings, Stella Mondo also is suing Eminent in a collections case.
The only unsecured creditor listed is a $3,000 SBA loan.
The company’s Chapter 11 filing includes a restructuring plan with cash flow and sales projections for the business through 2023. The document shows total 2020 sales of $681,000. The 2021 sales projection is $943,000, a 40% growth rate. The document also forecasts a 40% growth rate in 2023.
The document shows a 2020 net loss of $127,000, with a projected 2021 loss of $49,000 and a projected 2023 net income of $93,000.
In a media statement, the company said it will continue to operate and move forward without any interruption.
“The company has secured financial funding from existing ownership. Said funding will provide the company with the money it needs to complete the reorganization process. The restructuring is solely focused on the existing shareholder debts,” the media statement said, adding that no supply partners will be affected and it does not anticipate any supply interruptions during or after the reorganization process.
Eminent said it will continue to support product owners and customers and will invest in the future with new model introductions planned for later this year.
“As an Investor and Manager, I am committed to the brand, and I remain optimistic about the future of the company,” said Jeff Soncrant, the CEO. ” The combination of Covid-19 challenging our sales team to interact with new dealers, and industry-wide supply chain challenges has delayed our profitability, but I expect Eminent Cycles to emerge from restructuring stronger than ever.
“It is our sole intent to continue to innovate through the sharing of new technology, creation of eye-catching designs, and embracing our customers through the bikes we build. Thank you for your continued support and we look forward to seeing you on the trails.”