Seattle renewable energy equipment maker Hydrovolts, which was on the “cusp” of initial commercial sales of its small hydroelectric turbines, is evaluating its options after running out of capital.
“The company does not have operating capital right now, and we’re looking at ways to restructure it and move forward,” Hydrovolts president and chief operating officer Mike Layton tells Xconomy. “There’s a deal on the table, but it hasn’t been finalized and it hasn’t gone out to shareholders” for approval.
That deal Layton refers to would involve a Hydrovolts debt holder buying the company’s assets, including the intellectual property behind its turbines for use in industrial waterfalls and irrigation canals. “Their plan is to go forward—restructure, recapitalize the company—and go forward with the current products as soon as possible,” Layton says, declining to identify the debt holder.
He says a deal could be finalized in mid-March.
Layton also confirmed that co-founder and former CEO Burt Hamner has left the board of directors. Layton was promoted to president last fall after Hamner stepped down as chief executive.
News of Hamner’s departure and the possible liquidation was reported earlier this afternoon by Geekwire.
Hydrovolts had hoped to begin commercial sales of its industrial waterfall turbines this month and Layton says the company received favorable responses. “The [sales] negotiations started about the first of February, and they’re kind of ongoing, but we don’t have any capital to continue with that conversation,” he says. “We’re on the cusp. We just ran out of money before we could close the sales.”
Hydrovolts, backed to the tune of $2.8 million by investors including the Northwest Energy Angels, was struggling to raise a $1 million convertible debt round, as we reported earlier this month.
“I’m finding that in the Seattle area… it’s tough to get [investors] to understand the financial model because they’re used to apps and computer programming,” Layton said in a January interview. “Ours is bigger equipment. It’s more like buying a car. It’s industrial equipment. So the acceptable payback is longer for my customers.”
