Updated 7/6/18 with comments from Kraig Clark on the financial status of the company.

Rocklin, California-based JLM Energy laid off its workforce last week, freezing one of the more unusual projects in the energy storage industry.

The technology startup had scaled up a business around its Phazr battery, which attaches to solar racking and sits underneath the solar module. The company claimed it has thousands of units operational across California, Arizona, Connecticut, Hawaii and North Carolina, although its units are much smaller than typical battery products.

The Phazr concept applied the distributed logic of microinverters to the energy storage sector, promising modularity and easier installation. Its DC-coupled architecture eliminates the cost of a storage inverter and reduces roundtrip efficiency losses.

To succeed, though, it had to overcome the industry's instinctive reaction that the rooftop is no place for a lithium-ion battery.

JLM was funded by Kraig Clark, a founder of analytics firm CoreLogic Systems, and was run until recently by co-founder Farid Dibachi. The company ran out of money to pay its employees after last week and is searching for new funding options, sources familiar with the company told Greentech Media.

"We laid off staff with the caveat that, once we get some funding, we’ll bring whoever wants to come back to the company, we’ll bring them back," he said.

In the mean time, about a dozen of the former 38 employees are showing up for work, even without the immediate promise of pay. They are keeping the company's customer service operation running, Clark said.

The layoffs came shortly after an abrupt change in leadership: Dibachi left in May after eight years at the helm, and Chief Operations Officer Erin Clark, the former president of PetersenDean's consumer solar business, took over the top job.

At the time, Kraig Clark described the transition in leadership as a "natural progression" for a company of that size and growth trajectory.

“We have transitioned from a product development focus to market execution and rapid growth in a hot industry," he said. "It makes sense to have an executive with deep experience in the solar industry to lead our next phase of growth.”

Erin Clark reported then that sales had grown 425 percent from the previous year, on the back of the Phazr product.

As of Tuesday, Clark's LinkedIn page listed his stint as CEO as running from May to June 2018. The webpage now describes him as a contractor in the Sacramento area.

Kraig Clark has jumped in as acting CEO with the goal of securing more funding. He's also recruiting board members to join him in overseeing the company.

He believes in the Phazr product, and wants to pursue untapped revenue opportunities associated with the control software Measurz.

Structurally, the company offers a relatively blank slate to an investor. Its ownership remains with the founders, because there haven't been any dilutive fund raises. And with a one-man board, new investors won't have to win over many stakeholders.

One thing Clark did confirm: he doesn't plan to put in more of his own capital.

"I’ve put a lot of money into it already," he said.

Before the recent turmoil, JLM had also worked on financial innovations, securing a $25 million project financing facility from North Sky Capital's Alliance Fund II. That fund enabled JLM to offer commercial storage customers guaranteed monthly bill savings with no money down.

Solar installer Barry Cinnamon, writing this week for Greentech Media, gave the Phazr a generally positive review.

"JLM’s Phazr is a unique battery storage system that solves several problems typical with ordinary systems: It is very modular, the battery is easy to install underneath each solar panel, and no additional wall space is required," he wrote.

As for downsides, Cinnamon noted that the Phazr cannot provide backup power, and "the efficiency and longevity of rooftop batteries is not yet proven." That said, he expects that batteries, like microinverters and optimizers before them, can be designed to withstand the exposure of a rooftop deployment.