IdleAire Technologies Corp. has filed for bankruptcy in U.S. Bankruptcy Court for the District of Delaware.
The Chapter 11 filing probably doesn’t come as a big surprise given the fact that the company had never made money and has amassed a total net loss of more than $246 million since it went into operation, according to its 2007 annual report to stockholders.
In that annual report, company officials weren’t optimistic about its future either – so much so that expansion plans are now on hold. IdleAire is a provider of truck stop electrification and related services. Corporate headquarters and a research and development center are located in Knoxville, TN.
The report, filed April 15 with the Securities and Exchange Commission, repeatedly expresses concern about the future success of the company.
“We cannot guarantee if, when or to what extent we will become profitable, or that we can maintain profitability if it is achieved,” officials wrote in the report. “We have liquidity problems and may need to raise capital on terms unfavorable to our stockholders, or we may not be able to raise capital at all.”
One move IdleAire executives made in 2007 was to take the company public with an Initial Public Offering of its stock. Following the July 2007 announcement that the company would pursue the IPO to raise money for its operations, all of its reports have cast doubt on the company’s ability to be financially successful.
Those concerns were repeated in the annual report.
IdleAire’s ability to make money hinge on a variety of factors that company officials contend are out of their control. One such factor is the cost associated with the company’s expansion plan and the build-out of its network.
Officials report that each IdleAire space costs approximately $15,000 to build. So for a truck stop with 70 or so parking spaces up for conversion, company officials expect to spend about $1.1 million on that one truck stop alone.
The report also states that IdleAire’s potential for success include competition from other anti-idling devices, resistance of truck stops to commit to the technology, and resistance from truck drivers.
IdleAire quickly earned favor years ago with the federal government and even some regional agencies, snagging more than $54 million in grants. The report acknowledged there are no assurances IdleAire will be awarded any more grants.
Literally days before the Chapter 11 filing, IdleAire officials announced the company had secured a $25 million line of credit – and had borrowed $3.7 million from it. The bankruptcy filing indicates that company officials intend to use the line of credit to complete the company’s obligations during the bankruptcy process.
– By Jami Jones, senior editor