Developing a new industrial-focused battery that is less expensive, more reliable and environmentally friendlier than lithium-ion batteries has been a goal of battery technology companies that is becoming a reality.
One battery technology company was on the cusp of reaching that goal of manufacturing and marketing that alternative product, but the high costs of developing such technology got in the way of success.
Ambri Inc., a start-up Liquid Metal battery technology company backed by billionaire Bill Gates' venture investment firm Gates Frontier, Paulson Partners and Reliance New Energy, just needed to complete its manufacturing facility to begin producing its game-changing product.
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Unfortunately, the battery technology company fell short of its needed funding and on May 5 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware seeking a sale of its assets to its prepetition senior noteholders.
The Marlborough, Mass.-based battery development company was co-founded in 2010 with $4 million in Series A seed funding that backed Liquid Metal battery technology created by Prof. Donald Sadoway and Dr. David Bradwell at Massachusetts Institute of Technology. The patented Liquid Metal battery tech has 103 issued and pending patents.
The company was working to develop Liquid Metal batteries that are low-cost, highly reliable, extremely safe, degrade only minimally over their lifespan, and can shift fundamentally how power grids operate and source their power, contributing to a cleaner energy future, according to court papers.
Liquid Metal batteries have advantages
The Liquid Metal battery technology inventors claim their product has numerous advantages over lithium-ion batteries such as requiring lower capital and operating expenditure while not posing fire or thermal run-away risk, using readily available materials that are easily separated at end of life and completely recyclable, are resistant to capacity fade and can be charged to their full designed capacity for a longer period of time.
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The company's bankruptcy problems arose after efforts to secure Series F funding in spring 2023 fell through. The tech firm subsequently sought $50 million in bridge financing in fall 2023 to fund a scaled back business plan, but a potential investor declined to participate, creating an $8 million shortfall, according to a declaration by Ambri Chief Financial Officer Nora Murphy.
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The shortfall of funding interfered with the company's plans to complete its manufacturing facility in Milford, Mass.
With only $42 million in commitments, Ambri needed to cut back on costs, which included a reduction in workforce by 105 employees in November 2023, court papers said. The company also sought to restructure debt obligations through December 2024, but was unsuccessful.
Ambri determined that filing a Chapter 11 petition and seeking a sale of its assets was its best option, according to court papers. The debtor hired affiliates of Portage Point Partners as its investment banker and restructuring adviser to secure $9.5 million in debtor-in-possession financing from the prepetition secured lenders, which include Gates Frontier and Paulson, to fund costs of the Chapter 11 case, near-term working capital, ongoing business operations and pursue a value maximizing transaction.
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The debtor also filed a motion seeking approval of bidding procedures for the sale of all of its assets and designating its prepetition secured lenders as its stalking horse bidder with a credit bid of $38 million for the purchase of the assets subject to higher and better offers in a Section 363 auction.
Under terms of the bidding procedures, the debtor seeks a bid deadline of June 20 with an auction to be held June 24 if there is at least one qualified bidder in addition to the stalking horse. A sale hearing will be held July 9 to approve a sale. The debtor seeks to close a sale by July 11.
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