Date: Jul 28, 2009 Author: Matt Chandler Source: bizjournals (
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Less than a month after CEO and cofounder Keith Blakely was ousted, NanoDynamics Inc. filed for Chapter 7 bankruptcy protection July 27 citing a lack of available capital to keep the research company afloat.
The "straight liquidation" of Chapter 7, means there will be no reorganization of the company, which was founded in Buffalo in 2002. NanoDynamics made solid oxide fuel cells, water filters and other advanced materials related to nanotechnology. The company was based in Buffalo and operated three other facilities outside the region. According to an S-1 filing in 2008 as part of a plan to raise capital through an IPO, over the past five years the company had revenues of about $8.8 million, and net losses of nearly $34 million.
The bankruptcy filing ends a turbulent seven years marked by high hopes, promises of job creation, and ultimately, a lack of financial backing that led to its closure, leaving approximately 100 employees out of work.
In 2007, a plan to take the company public was unveiled with then-CEO Blakely saying NanoDynamics intended to sell 6.5 million shares of stock, raising over $78 million in the process. Citing the poor economy, those plans were scrapped in early 2008, though at the same time, Blakely spoke to Business First about his plans to list the company on the Dubai International Financial Exchange, making it the first company in the United States to do so.
"NanoDynamics is focused on addressing global challenges in the alternative energy, clean technology and infrastructure markets," Blakely said at the time. "Our customers, suppliers, and partners are located throughout the world, and we see major opportunities in the Middle East and Africa for many of our products."
Those plans didn't materialize, and in March of 2008, the company laid off an undisclosed number of employees in connection with the aborted plans to go public.
Though NanoDynamics announced over $2.5 million in grants and contracts it received as recently as January, Raymond Fink, a partner at Harter Secrest & Emery LLP, who is representing the company in bankruptcy proceedings said it simply wasn't enough.
"Their operating capital needs were considerably higher," Fink said. Putting it into perspective, he said "A million dollars didn't put much gas in the tank."
In addition to NanoDynamics Inc., a second filing was made on Monday for NanoDynamics Energy Inc., which operated as a wholly owned subsidiary of the parent company.
"The reason it filed is that it is the owner of quite a few patents and trademarks which we believe have value," Fink said.
With their headquarters on Furhman Boulevard closed, calls placed to the firm handling public relations for NanoDynamics seeking comment on the filing were not returned. Fink pointed to the economic downturn as the final nail in the coffin for the company.
"The company was trying to raise capital and given the current financial market conditions the ability to raise capital is very, very difficult," he said, "particularly for a company that is primarily research and development and hasn't quite yet gotten most of its products to the market."
