All of us have seen or directly experienced some effect of the recession, ranging from friends or co-workers losing their jobs to budget cut backs to bankruptcy.
Nanoindustries have not been immune to the recession’s effects. Many. if not the majority of nanoindustries are small businesses and lack the depth of financial resources that older, more established companies have.
Evident Technologies, Inc, located in Troy NY and specializing in the production of quantum dots and nanocrystals, filed a petition for Chapter 11 bankruptcy protection and reorganization in the US Bankruptcy Court for the Eastern District of New York on Monday. Evident’s press release cites as the major contributing factor to the bankruptcy a patent infringement case in the US District Court for the Eastern District of Texas (Invitrogen Corporation et al v Evident Technologies In 08cv163). Evident Technologies was also involved in a trademark infringement suit (Evident Technologies Inc v Everstar Merchandise Company LTD et al 08cv10230) in the US District Court for the Southern District of New York, which was dismissed with prejudice and with each party having to bare the cost of counsel. The cost of the cases and a lack of clients are, presumably, the reason that Evident’s monthly income was $10,000 while monthly expenses added up to $200,000 a month. No business can last for long bleeding cash like that.
Evident Technologies has arranged DIP financing of either 2.7 million or 1.35 million (the article in the Albany Business Review gives the 2.7 million figure, while the press release gives the lower one) to enable it to continue in business while reorganizing. In addition to its financial problems, the bankruptcy petition indicates that there’s been some instability among the corporate officers, with the former CEO and COO both resigning in May of 2009.
Nanotechnologies and nanoindustries have often been seen as one of the keys to a brighter economic future – a newspaper in Sri Lanka described nanoindustries as the way to solve the current global recession – but nothing prevents nanoindustries from suffering the same business problems as any other industry. Evident Technologies probably isn’t the first nanoindustry to file for bankruptcy nor will it be the last. Some, as with other companies, will not emerge intact, either having to file Chapter 7 petitions or being merged into other companies. Others will survive the recession and the venture capitalists will look at them again as viable investments.
Here’s hoping that Evident Technologies is one of them.