Boxed Inc, an online wholesaler, has filed for Chapter 11 bankruptcy protection as it looks to sell its software business.
The e-commerce firm began exploring routes to raise capital last month but confirmed on Sunday it was beginning with administrative proceedings.
“This was an incredibly difficult decision, and one that we reached only after carefully evaluating and exhausting all available options,” co-founder of Boxed, Chieh Huang, said in a statement.
Spresso, the group’s software-as-a-service business, will be sold to the top priority creditors, the New York firm added.
As well as the sale, the company confirmed that it would be winding down retail operations in the coming weeks.
The US company stated that it would be using cash collateral to cover administrative costs and near-term operations as it winds down – with the Spresso business not expected to face any disruptions.
Boxed had revealed in March that most of its liquid assets including cash deposits were held in the failed Silicon Valley Bank.
The firm noted it had up to US$103mln in assets and US$190.4mln in liabilities when it filed for bankruptcy.
The company went public in December 2021, during the midst of the pandemic when its business was thriving.
However, since then the company has seen 98% of its share price lost.
Last year, the stock dropped from around US$10 to US$1 in the space of one month.
More than 10% of Boxed shares are currently being shorted, according to Barron’s, with the stock now below US$0.20.