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NanoDynamics stock sale may raise $92 million Buffalo company plans to sell 6.6 million shares

Buffalo is poised to add another publicly traded company to its list of corporate citizens.

NanoDynamics, which opened in 2002 on the city's waterfront, has applied to list its newly minted shares on the Nasdaq stock exchange, a filing with the U.S. Securities & Exchange Commission indicates.

The developer of nanotech water filters and non-polluting "fuel-cell" electric generators has priced its initial public stock offering at between $12 and $14 a share, with expected sale of 6.6 million shares, the filing said. Plans for the offering were first announced in May.

The potential capital injection of $79 million to $92 million -- or a maximum of more than $100 million, if extra shares are sold -- would fuel the company's plans to open a factory to launch production.

"We are capitalizing on the increasing demand for cleaner energy and water, and the emphasis on sustainable renewable resources," the filing says.

The capital would also support the company's technology development efforts. NanoDynamics burns through about $1.5 million a month as it readies inventions for commercial sale, according to its SEC filing.

"Increasing our revenue and achieving profitability will depend substantially on our ability to achieve wide-scale . . . customer acceptance of our clean technology solutions," the company said.

Company officials were unavailable to comment because of the pending stock sale, a representative said. NanoDynamics is headed by Keith Blakely, founder of a Buffalo ceramics materials developer called Advanced Refractory Technologies that was sold to a unit of Tyco in 2001.

In 2005 NanoDynamics pledged to create 325 jobs as it received grants and tax breaks from the state worth $4.6 million. It currently has about 75 workers in the area.

In its cavernous building on Fuhrmann Boulevard, NanoDynamics toils on a number of high-tech ideas, from nano-scale industrial powders to low-spin golf balls that are less prone to hooking.

Now its most promising products are solid-oxide fuel cells and water filters with nano-scale technology that have many times the surface area of conventional filters, the company's filing says.

Solid oxide fuel cells use a chemical reaction to generate electricity and heat from natural gas or even bio-fuel sources, without emitting pollution caused by combustion.

With oil prices soaring, products aimed at clean alternative energy push investors' buttons these days. But success may not be easy in a fledgling industry that is both crowded and unprofitable, according to analysts.

With current technology, fuel cells cost about 15 times more than the target that would make them competitive with existing electricity generation technology, according to a report by Wintergreen Research in Lexington, Mass.

"Economies of scale and new materials are needed to bring the units within target costs," the 2006 report says. The report lists 111 companies that are working on fuel cells or aspects of them.

NanoDynamics' technology is protected by 19 patents, with 35 more patent applications filed, the company says. A 250-watt fuel cell is expected to go into production in 2008, with a one-kilowatt model to follow the next year.

There would be 26.5 million shares outstanding following the offering, including shares already issued. Shares would trade under the symbol "NDMX."

Its proprietary "Cell Pore" filter products are sold commercially, with a nano-enhanced version currently being tested by outside labs and potential customers. A joint venture with a unit of Royal Dutch Shell is looking at applying the filter technology in the oil and gas industry, the filing states.

NanoDynamics also has business units in Pottsdam, N.Y., Pittsburgh and Columbus, Ohio.


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