Lifesize files bankruptcy, lines up $21 million sale to Enghouse

By Sarah Lizee

Olympia, Wash., May 17 – Lifesize Inc. filed Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas.

The company has entered into an asset purchase agreement with Enghouse Systems Ltd., which has agreed to purchase all of the company’s assets and brands, including Lifesize, Kaptivo, ProScheduler, Serenova and Telstrat, according to a press release from Enghouse.

The purchase price under the agreement is $21 million, according to court documents.

The asset purchase agreement remains subject to higher or better offers in line with bid procedures and deadlines, as well as court approval.

The agreement is the first in a series of strategic actions that Lifesize is taking to reorganize its capital structure.

Lifesize will operate as usual throughout its sale and financial reorganization process to secure an owner with a long-term commitment to continuity, ongoing support and investment.

For that purpose, Lifesize has obtained $5 million in debtor-in-possession financing from its existing lender, First Citizens Bank & Trust Co., which succeeded Silicon Valley Bank as lender.

The financing, in addition to its existing working capital facility and upon approval from the court, will provide liquidity to support day-to-day operations during the Chapter 11 process.

Following a final order, $15 million of prepetition debt will be rolled up into the DIP loan as well.

The facility is set to mature in 90 days and bear interest at 12% per annum, payable in cash monthly for the new money and payable in kind for the rollup.

There is a 5% commitment fee.

The company is seeking interim access to $1.5 million of the facility.

“Lifesize was founded on the vision of providing life-like visual communication solutions to allow businesses to thrive in a digital world,” Marc Bilbao of FTI Consulting, Inc., co-chief restructuring officer of Lifesize, said in the releases.

“However, due to the global pandemic, the need for in-office video conference solutions evaporated essentially overnight.

“This ultimately put a pause on Lifesize's core business model and a strain on its financial structure.”

In its petition, the company listed 200 to 999 creditors, $10 million to $50 million in assets and $100 million to $500 million in liabilities.

As of the petition date, the debtor’s cash on hand was less than $100,000.

Its largest unsecured creditors are Logitech International, SA with an $8.37 million debt claim, Meritech Capital Lifesize LLC with a $5.43 million debt claim, Redpoint Omega II, LP with a $5.42 million debt claim, SH Lifesize, LLC with a $2.09 million debt claim and Craig Malloy with a $1.99 million debt claim. Each claimholder is based in Denver.

The company is represented by Pachulski Stang Ziehl & Jones LLP. FTI Consulting is acting as financial adviser.

Lifesize is an Austin, Tex.-based provider of video conferencing and omnichannel contact center solutions. The Chapter 11 case number is 23-50038.

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