ASHLAND Unity Aluminum, formerly Braidy Industries, appears to be moving closer to a sale of subsidiary Veloxint.
In a letter sent to investors Oct. 9, Unity Aluminum CEO Don Foster wrote the company was in negotiations with an investment group called Clearbrook Global regarding the sale of the beleaguered subsidiary, for the firesale price of $1 million.
The Massachusetts-based company — which is billed as a developer in lighter and stronger tools — was bought for $29 million under the leadership of then-CEO Craig Bouchard, per the latest Securities and Exchange Commission Report. Foster wrote that since that purchase, the Unity Aluminum has sunk $21 million in losses into the subsidiary and still remains 18-24 months out from its first commercial sale.
In the infamous Bouchard report that surfaced in April 2020, Veloxint was claimed to have the technology ready for sale as early as 2018 at the time of its acquisition. At the time of that report, a salable product wasn’t ready — projected before 2021.
The two companies entered into a “non-binding term sheet” — the basic terms of a sale — on Sept. 29, according to the letter.
Since April, Unity has engaged a third party to sell off Veloxint. That third party has approached 71 firms, entered into seven non-disclosure agreements and found two firms had a real interest, per the letter.
Per the Foster letter, the close date on a deal is listed as Oct. 31.
In another letter sent to investors, Clearbrook Global confirmed that the purchased assets would be wrapped up into a new company, aptly named NEWCO. Partnered with Touchstone Labs, NEWCO will sell 70% of its shares for a value of between $1.5 million and $3 million, according to the letter.
Clearbrook will keep a hold of the remaining 30% of stocks as a payment for structuring the deal and to cover $500,000 the company put down as a deposit on the company.
The letter stated Unity investors would have until Oct. 23 to close on investments.
Noting the rounds of layoffs Veloxint experienced over the course of the COVID-19 pandemic, Clearbrook stated that “there are considerable risks associated with NEWCO because we do not know whether we can attract back key employees that were furloughed or laid off during the pandemic.”
There’s still uncertainty as to whether the technology developed at Veloxint would be commercially successful, per the letter.
A Unity spokesperson did not offer a comment regarding the sale, citing federal SEC regulations.
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