More nanomaterials woes, this time from Unidym who you may recall bought Carbon Nanotechnology Inc’s and CSixty’s IP for a song a few years ago. We’ve herard of big job cuts and this comes from the annual report of their parent, Arrowhead Research Corporation. It can be read along the lines of desperate cash starved company mortgages its future to Tokyo Electron in exchange for a couple of million bucks.
Unidym raised a total of $14 million of equity financing in fiscal 2008. In fiscal 2008, Unidym consumed large amounts of cash to scale up the manufacture of carbon nanotubes, scale up for the production and sale its first carbon nanotube based film product, acquire another nanotech company, expand its business development activities, and prepare for an initial public offering. In the first and second quarters of fiscal 2008, Unidym expanded its executive, technical and administrative staff for these activities. Unidym’s cash burn ramped from $2 million in the second quarter, $3.6 million in the third quarter and $4.2 million in the fourth quarter.
In the fourth quarter, it was clear that Unidym would be unable to meet its fund raising goals to support its 2009 cash needs. Moreover, technical development took longer than expected. Additionally, it became evident that dramatic change in the financial market would not allow an initial public offering. Starting in October 2008, several general and administrative positions were eliminated. Approximately, half of its team in its Houston, TX facility was put on unpaid leave to conserve cash. Further cuts to personnel and consolidation of facilities are planned to bring Unidym’s cash burn to 60% of its high water mark in fourth quarter 2008. However, Unidym will still need to obtain additional cash to fund its operations and obligations through fiscal 2009.
What is particularly depressing about this story is that the IP in question all came from the lab of Richard Smalley, one of the founding fathers of nanotechnology. So far it’s taken some $40 million to get, erm, nowhere. One day I’ll get around to adding up all the money spent on taking nanomaterials to market, it must be close to half a billion by now.