POTSDAM — LC Drives in Potsdam, which furloughed all of its employees in August, is permanently closing.
CEO Russel Marvin issued a memo to employees on Thursday informing them that a potential key investor pulled out, leaving the company unable to continue operating.
“The investor that was formulating an offer on Friday has chosen not to invest due to internal reasons,” the memo reads. “At this point I do not believe that there will be an investor that will bring LC drives back — at least not one that will allow it to be the current size and scale.”
The closure of LC Drives means 120 workers are out of a job and benefits.
“As of September 30th, the healthcare plan at LC Drives will be terminated and everybody will need to seek other options,” Mr. Marvin wrote.
Last month, LC Drives furloughed its workforce while the company tried to finalize its Series B funding round.
Series B funding is one part of a multi-stage financing process involving venture capitalists and other investors, who generally hold stock as a company progresses out of its startup instability.
It seems that funding never came through.
LC Drives operates in Potsdam out of the North County Incubator, a space leased by Clarkson University’s Shipley Center for Innovation through the state’s Hot Spot program.
The company developed technologies for electric motors and generators.
The death of the company brings an end to what was initially a much-hyped start-up.
LC Drives was awarded hundreds of thousands in state aid in its early existence, as well as grants from the St. Lawrence County Industrial Development Agency. In 2017, it secured a $100,000 loan through the IDA and the St. Lawrence River Valley Redevelopment Agency fund, and a $15 million investment in 2019 from Koch Engineered Solutions.
Before the furlough, the company had major plans for expansion. Earlier this year, a plan moved forward with approval from St. Lawrence County and Potsdam town planners to construct a new 120,000-square-foot facility along Route 56, as well as a 30,000-square-foot light manufacturing facility on the same property.
Mr. Marvin could not be reached for additional comment Friday.
Ellis Giacomelli contributed to this report.