Luminetx Corp. is operating in the red and may soon run out of money unless its shareholders agree to sell the company to Christie Digital Systems Inc.

Shareholders have one week to decide whether to take $15 million for the company, which will work out to about 37 cents a share for common stock or 74 cents a share for preferred stock, according to a summary of the agreement obtained by The Daily News.

Luminetx had only $313,377 in cash as of Oct. 31 and was operating with a $2,874,544 net income loss for the first 10 months of this year. Christie has already loaned Luminetx $1.3 million and holds the patents for the technology behind the company’s VeinViewer products as collateral.

The board of directors for Luminetx have voted unanimously in favor of the acquisition. After the company issued a brief announcement Thursday about the decision without disclosing details about the confidential agreement, the company issued another brief release about the departure Richard Kindberg, who had served as company president since March.

Al Gossett, who owns car dealerships in the area, served as interim head of the company from June 2007 after the departure of Jim Phillips as CEO until Kindberg was appointed.

The new interim president is Chris Schnee, the company’s vice president of global marketing and international sales.

The financial hardship of the company is a far cry from the high expectations of a few years ago. The VeinViewer product, which allows medical professionals to easily see blood vessels beneath the skin, was launched in 2006. TIME magazine hailed it as “one of the most amazing medical inventions of the year.”

The company was hurt by management turnover, boardroom conflicts, the downfall of one of its major investors, Stanford Financial Group, and legal fights with a new competitor.

Luminetx sued Accuvein LLC of Cold Spring Harbor, N.Y., last year after that company announced it was launching a competing product. The two companies reached a settlement agreement in August, but did not disclose financial terms at that time. According to the acquisition agreement, Accuvein agreed to pay Luminetx $2 million. That money will be distributed to Luminetx shareholders after the company is acquired by Christie.

Although Luminetx is selling its assets and its VeinViewer product, the company will retain its shares of Snowflake Technologies Corp., which is developing a biometric identification product. Holders of Luminetx common stock will receive one share of Snowflake for every share of Luminetx stock they hold, while holders of the preferred stock will receive two. This is in addition to the cash payments.

Herb Zeman, the founder of Luminetx and the inventor of its technologies, was ousted from the company two years ago, but he remains a major shareholder. Although Zeman said he stands to gain about $1.5 million from the acquisition, he said he is doubtful of receiving the money. Zeman is skeptical because of a risk clause in the agreement that allows Christie to hold the funds in the event of “any breaches of any representations.”

“The problem with that is we have no idea what Luminetx management told Christie,” Zeman said. “Even if we knew that, we wouldn’t know if it was true or not because we don’t have any of that information. We are basically betting that they were honest with Christie when they weren’t honest with us. There were months and months and months where management said, ‘Oh, Luminetx is doing fine. We have all these sales.’ It turned out that they were running out of money and that they were almost bankrupt. If they didn’t tell us the truth, why would we think they would tell Christie the truth?”

In July, Luminetx released a statement stating its second quarter sales orders were the highest since the company began shipping its VeinViewer product. Last month, the company received the 2009 Global Business Award from the Greater Memphis Chamber International Business Council.

The shareholder vote on the proposed acquisition is set for Friday at 10 a.m. Zeman said one week is not enough time to consider the proposal and wants shareholders to reject it.

“The goal is to take over the board of the company, to be a member of the board, to remove the present board, to raise capital and to run Luminetx properly so that it can be a successful company,” Zeman said. “The shares instead of being sold at 37 cents a share could be sold at $35 a share in five years or in 10 years or something. That was the original goal – to have the shares be worth something. The present management has systematically destroyed the company to make the shares worth nothing.”

Christie manufactures a variety of display technologies for both large and small audience environments. It is a subsidiary of Ushio, a privately held company.