Date: Dec 13, 2013 Author: Mara Lee Source: Hartford Courant (
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Inframat Corp., a 17-year-old nano materials company, keeps hitting on successful formulas of high-tech coatings made up of microscopic particles, 1,000 times smaller than a human hair.
For instance, Inframat worked with a major orthopedic implant manufacturer on a ceramic coating for hip and knee replacements, getting paid $1 million to research the right formula.
The Department of Defense paid the company to research wear-resistant and thermal barrier coatings for Pratt & Whitney and Rolls-Royce jet engine parts.
But over and over again, these development projects, even though they hit performance targets, never became commercialized.
David Reisner, a Ph.D. from MIT in chemical physics and a co-founder and director of The Nano Group, Inframat's parent, laughed when he was asked if he ever imagined 17 years ago that his company could go so long without producing a commercial success.
"I think what happened is we got seduced by the relatively easy money of government contracts," he said. "There's a lot of companies in Connecticut and in the U.S. that become SBIR junkies," he said.
The Small Business Innovation Research program is designed to spur innovation at small companies by giving them money to research problems for the Department of Defense, the Department of Energy and others, with the idea that small companies are where most innovation happens.
Inframat has issued 35 patents and has 15 pending, so it knows how to innovate.
SBIR is also supposed to increase the technology transfer from the federal government to the private sector.
Essentially, companies write proposals for an idea, and get $150,000 for an initial proof of concept. They then compete for Phase II follow-ons, which generally are under $1 million and last a year or two.
The hope is that then larger corporate partners will decide to use the results of the research to make new products.
But in Reisner's experience, most of the discoveries just get put on a shelf.
Between 1997 and 2010, Inframat and its sister company US Nanocorp, which researches energy storage such as advanced batteries, were awarded $23 million in SBIR grants.
Reisner said until 2008, 26 percent of their proposals were funded. But after that, only one in 10 were, as competition increased. Eventually, they had to pull back on that strategy, because they couldn't afford the time to write proposals with so few being selected.
Nano Group was honored by the Connecticut Technology Council in 2002, 2003, 2004 and 2005 as one of the state's 50 fastest-growing tech companies.
In 2005, the companies' high-water mark, the two companies employed more than 30 people and had $3.5 million in combined revenue.
Last year, they had $1.5 million in revenue, nearly all from Inframat, and they expect to have between $1.3 million and $1.4 million in sales this year.
Reisner and co-founder Danny Xiao, a Ph.D. materials scientist from UConn, work with a technician, a scientist and an administrator who are full-time employees, and three part-time employees.
A significant part of the business these days is importing the materials that will be made into nanocoatings, and reprocessing them to change the particle size, as well as packaging its own formulations.
A & A Co. of South Plainfield, N.J., which applies thermal spray coatings for industrial and military clients, said spray with nanomaterials is 20 percent of its business, and Inframat has been its supplier for those materials for about 10 years.
President Stewart Brunhouse said universities, A & A and Inframat developed the feedstock's formula together.
"When that was over, we had developed a whole host of applications for the Navy as a result of that effort," he said. He said Inframat is reliable at producing the material.
Some other nanomaterials companies "have very long lead times or they can't produce in the quantities we need," he said.
Reisner said many other nanotech firms founded in the mid-1990s went out of business as venture capitalists lost patience with years of losses.
The Nano Group has never been profitable, but its founders continue to control 80 percent the equity. A wealthy investor has put $1.8 million into the company over the past five years for operations, and they hope he will invest $3 million or more in the next year, which would allow them to buy equipment so they could make more ceramic feedstock, a high-margin product.
"It's not that the market is not there, we need to scale up production," said Xiao, who recently taught a Chinese company how to enter the field in a big way, in exchange for $900,000.
Reisner said the principals have not always been able to pay themselves over the life of the company. But if this investment and ramp-up comes through, they project they could reach $5 million in sales in a few years, about 30 employees, and either sell themselves or go public.
"It's time to retire for us," Xiao said.
