BRATTLEBORO -- Carbon Harvest has run out of cash.
The Burlington-based company this week was forced to furlough six of its 11 workers in Brattleboro, President Don McCormick disclosed Thursday, adding that he is searching for financing to keep the company operational.
But McCormick also said rumors of Carbon Harvest's closure are "greatly exaggerated," and he expects the company to bounce back.
"I've been up against walls as high or higher [than this]," McCormick told the Windham Solid Waste Management District board.
Carbon Harvest Energy's Old Ferry Road facility is leased from the management district and is billed as "the country's first integrated renewable energy-to-agriculture and algae biodiesel project."
Since 2010, the company has been harvesting landfill gas and using it to generate power for the grid. Also, heat captured from that power plant now is provided to a greenhouse where food can be grown year-round.
McCormick said the company already is selling basil and lettuce to several grocery stores.
"We have a market for everything that we can grow at the facility," he said.
But a cash crunch has, at least for now, hampered the business considerably. McCormick said there are a variety of factors including a slow economy that has left Carbon Harvest "fighting upstream."
There's also the matter of a $325,000 loan from the Vermont Community Development Program. Announced in August, the
But it has not yet arrived, and the money now is expected in November, McCormick said.
"That timeline, for us, has meant (lost) time and money and reduced efficiencies in operations," he said.
The bottom line, McCormick said, is that Carbon Harvest "has run out of operating cash."
He said investors have provided small batches of bridge financing.
"They've also said they can't do more right now," McCormick said. "We got that news on Friday."
After a few final discussions over the weekend, that decision was reiterated on Monday. That led McCormick to drive to Brattleboro Tuesday to deliver the bad news to employees who, he acknowledges, had no warning that their jobs were in jeopardy.
There were no layoffs in Burlington, where a paid staff of just three includes McCormick.
The Brattleboro cuts had to happen, McCormick said.
"If we continued to run (at full staff), we would start spending money we didn't have," he said.
McCormick said he was not immediately requesting any changes in his lease with Windham Solid Waste Management. He also said he has been meeting with financial partners including the Vermont Economic Development Authority.
Jo Bradley, the authority's chief executive officer, said the organization lent Carbon Harvest between $400,000 and $500,000 "within the last year or so."
Some has been repaid.
"I know that they are in a state of flux," Bradley said. "We are talking with Don McCormick."
Locally, Carbon Harvest rents space in the Book Press on Putney Road, a facility owned by Brattleboro Development Credit Corporation. Jeff Lewis, BDCC executive director, said Carbon Harvest uses the space to incubate tilapia before the fish are transferred to its main facility on Old Ferry Road.
Tilapia are part of Carbon Harvest's aquaculture program. Lewis said he has been assured one of the employees still on Carbon Harvest's payroll is caring for the fish.
"I've been told they're not abandoning Brattleboro," said Lewis. "They're not walking away. They've just hit a rough spot in their business."
Patrick Moreland, Brattleboro's assistant town manager, said he also had been in touch with McCormick.
"He basically conveyed to us that, ‘News of our death has been greatly exaggerated,'" Moreland said. "They continue to be operational and are fulfilling their supply contracts."
Moreland added that the town is "ironing out the details" of the pending $367,500 in loan money due to Carbon Harvest.
But that cash is not a life-saver for the company. McCormick points out that it is for construction, not operations.
"If I can't get our house in financial order, I can't, in good faith, take on that loan," he said.
That means he must come up with operational cash. McCormick estimates that the company needs $250,000 to $330,000 "to take us all the way toward operating profitability."
As he works to find investment, McCormick said he intends to keep local officials apprised of the situation. He also said he is working quickly to find ways to ensure that the company's greenhouse is adequately heated and stabilized for the winter months ahead.
Mike Faher can be reached at email@example.com or 802-254-2311, ext. 275.
Reformer staff writer Bob Audette also contributed to this report and can be reached at firstname.lastname@example.org or 802-254-2311, ext. 160.