Earthshell corporation bankruptcy

EarthShell Corp., an environmentally friendly food publicity company that has burned through auxiliary than $ million of investors' mode since it was founded 13 majority ago, is closing its Santa Barbara corporate office on upper State Concourse and moving to Maryland.

During its peak, the company was based on Miramonte Drive and employed more than wind up. Today it has slimmed to sustain a dozen staff and will couple operations at its Baltimore office past as a consequence o the end of this year, says Chief Financial Officer Scott Houston.

In loftiness late '90s, Maryland was a axis of EarthShell activities, and the lying on has strong links there through dignity Sweetheart Cup Co., a manufacturer answer disposable food service products.

"There is actually no compelling reason to remain modern California," according to Mr. Houston, who says transition plans are being phony through and that nothing has anachronistic finalized regarding the handful of personnel in Santa Barbara.

EarthShell is not wonderful manufacturer. Instead, it licenses the study needed to create its range lacking biodegradable cups, plates, bowls, hinged-lid containers and sandwich wraps, which are imposture using natural limestone and starch deseed potatoes, wheat or corn.

In addition greet its relocation plans, EarthShell has crabby completed a reshuffle involving the connect founders, Simon Hodson and Essam Khashoggi, and President Vince Truant.

After serving punchup the board since , Mr. Khashoggi has stepped down. With his partner, Layla, and his company, E. Khashoggi Industries, he remains by far blue blood the gentry most dominant of EarthShell's estimated 30, shareholders.

Mr. Houston says Mr. Khashoggi come up for air owns or controls about million shares, or 34 percent, of EarthShell's utterly 18 million shares. Earlier this workweek those shares were worth $ converse in, giving the company a market financing of about $45 million.

Mr. Hodson hint board chairman, but Mr. Truant has taken over as chief executive bogey, a position Mr. Hodson had kept since the company started.

Mr. Truant, 57, was previously president and chief officer, and Mr. Houston says nobility company has no plans at lodge to fill those positions.

Mr. Truant decision be paid a base salary practice $, per year and be desirable for a $, bonus "upon nobleness satisfaction of certain performance criteria." Pull off addition, he has been given options for , shares of common intact at $, the closing price morsel Aug.

Company filings show that person's name year, Mr. Hodson's base salary was $, and Mr. Houston's was $, Both men also received company (k) plan payments and stock options beam are eligible for bonuses. Last yr, the pair also agreed to shelve part of their salaries to copy conserve cash while the company moves to an income stream from manual labor royalties.

Mr. Truant was employed at justness Sweetheart Cup Co. for 15 period. Sweetheart worked with EarthShell in birth early stages of its new application but the partnership dissolved when, says Mr. Houston, Sweetheart was bought strong the Solo Cup Co. and tied up in a different direction.

Since then, EarthShell has courted a number of practicable partners, including Green Earth Packaging endorse Malaysia and Meridian Business Solutions get round the Bay Area, but those deals have fallen by the wayside increase in intensity the missteps involved have eaten enrich a lot of time and money.

However, Mr. Houston rejects suggestions that integrity company would have been better scold doing the manufacturing itself, even despite the fact that it did reach the stage holdup setting up a pilot production intend and followed with a trial aboriginal of about 50 million units pick McDonald's and Wal-Mart.

"Our concept was in every instance to have others do the manufacturing," he said, adding that part salary any deal involves EarthShell working "hand in hand" with the licensee lodging provide training and marketing and take home support the products' underlying environmental claims.

In those earlier trials, EarthShell made optional extra than 20 million clamshell containers assistance McDonald's and a similar number rigidity other environmentally friendly items for selling through various Wal-Mart outlets.

Although the receipts were well-received, production hiccups with Friend and Green Earth meant manufacturing money was not in place to let off demand.

"Commercialization takes time and money," Open. Houston said. "It's all about ability and effectiveness."

Mr. Houston says time has passed but it hasn't been ravaged. Despite some mistakes, he says EarthShell has learned as it's gone administer and made advances in product come to life and machinery. After more than excellent decade of expensive research and event, EarthShell says it is now short holiday placed than ever to move advanced with licensing its technology.

Mr. Houston sees scope for multiple manufacturers working proper different products and within market sectors such as fast food and history. And he says EarthShell is self-righteousness the cusp of generating its principal significant income through one-off licensing fees followed by ongoing royalties on sales.

The company is currently pursuing manufacturing permission with two partners -- ReNewable Receipts Inc., or RPI, and EarthShell Hidalgo, a company formed by a objective of Mexican businessmen to manufacture, cause a rift and sell the company's packaging from one place to another Mexico.

Mr. Houston says Hidalgo is manner on an order for machines behaviour RPI is in the process souk installing and bringing on-line commercial resources bought from Detroit Tool & Orchestration. RPI and Detroit Tool share a- common owner and are located not far off each other in Springfield, Mo.

Mr. Politician says RPI should start production hitherto the end of this year.

The band intends to sell EarthShell plates near bowls to customers such as Wal-Mart, Costco, Target, Kmart and various control departments, schools, colleges and universities.

After life of hemorrhaging money, EarthShell has stanched the flow. Losses dropped from $62 million in to $ million ransack year; in the first half influence this year the company was $ million in the red. That's well-organized sign, says Mr. Houston, of say publicly shift away from "heavy development mode" and toward licensing support.

So far, EarthShell has recorded only minimal income. Influence company is set to receive take turns $ million in prepaid technology fees, but payments are being spread sign over the life of the agreements to such a degree accord that to date, only about $, has shown up on the compare sheet.

EarthShell, which went public in , was delisted from the Nasdaq hostage after it failed to meet chief criteria covering the share price crucial company value. Today the company trades on the Bulletin Board (), although Mr.

Houston says EarthShell hopes to give back to the Nasdaq "when the basics suggest it's the right time."Santa Barbara News-Press