It looks like OptiSense Network will need to find new financial backers to bring its optics-based grid sensor technology to commercial scale. The Plano, Texas-based startup filed for Chapter 7 bankruptcy protection on March 12, after its chief investor halted its financial support.

It’s an unexpected turn for a company that was as recently as January touting its roster of more than 30 utility pilot project partners, its early-stage work with grid vendors like ABB, and $16 million in funding as proof of plans to take its technology to the next stage of commercialization.

Stephen Prince, OptiSense’s CEO, sent an email to Greentech Media this week, saying that the company’s “technology and market are sound,” and that it’s seeking new investors to “do a warm restart with the necessary short-term capital.” He stated that he’s continuing to work on the company’s behalf on this effort, although OptiSense’s bankruptcy states that Prince resigned as CEO last month.

As for the cause of the bankruptcy, Prince wrote that the company’s “single, largest and majority shareholder experienced some significant personal financial losses, above and beyond his investment in OptiSense, and as a result put the company into bankruptcy with almost zero notice.”

According to OptiSense’s bankruptcy filing in U.S. Bankruptcy Court of the Eastern District of Texas, the company’s largest funder and key secured creditor is Andrew W. Byrd of Nashville, Tenn., who holds 39.15 percent of the company’s equity.

Byrd said in a Wednesday phone interview that he and his investment partners were key venture capital investors in OptiSense, but denied that the company’s bankruptcy filing was a result of his personal financial difficulties. Rather, he said, he ceased funding the company after deciding “the cost of bringing the technology to market was too high.”

OptiSense’s road to commercialization has certainly been a long one. The startup was founded in 2003, and landed its first partner to test a patented voltage- and current-sensing optics systems in 2005. That partner, Southern Co. utility Alabama Power, has since been joined by dozens of utilities testing its patented technology in one form or another, including EDF and E.ON in Europe, Baltimore Gas & Electric, Pepco, Duke Energy, Excel and San Diego Gas & Electric in North America, and Eletrobras in Brazil, according to Trey Beasley, OptiSense’s vice president of business development.

OptiSense’s bankruptcy filing lists $5,166,343 in assets, the majority of it in machinery, equipment and inventory, as well as a value of $876,732 assessed for the patents it holds, which stem from technology developed at the Department of Energy’s Idaho National Laboratory (PDF). OptiSense reported revenues of $2.2 million in 2012 and $3.9 million in 2013, according to its bankruptcy filing.

The company’s liabilities stand at $25,601,668 in secured and unsecured claims. Most of these liabilities consist of a series of convertible promissory notes held by Byrd, starting in fall 2012 and ending in February, which add up to more than $13 million. Other convertible promissory notes held by other individuals with Tennessee addresses, presumably Byrd’s investment partners, make up a significant remainder of the liabilities.

But the bankruptcy filing also included indications that two key utility partners have been returning OptiSense’s equipment and demanding reimbursement or repairs. These items include a $3,566,800 claim from Alabama Power, citing a date of “approximately May 2013,” and a description of a “customer warranty claim -- customer returned all product purchased for repair or replacement, which will not be possible.” The bankruptcy filing also notes that Alabama Power had returned equipment prior to its repair in February.

Another claim from Baltimore Gas & Electric for $519,310 from “approximately November 2013” is described as a “customer demand letter for return of product payment due to faulty product,” adding that OptiSense “disputes the request because no opportunity was given to remedy the problem as required by contract.”

Beyond the $16 million invested last year, OptiSense co-founders David Welch and Joseph Harlev invested $1.1 million in the company, and the state of Texas awarded the company a $1.5 million grant in 2007. An August 2013 Dallas Business Journal article noted that OptiSense had invested $1.9 million in its facility and $2.5 million in engineering and R&D, and employed 60 people at its manufacturing plant.