Virginia’s NanoSonic leads the 13 southern states in small business success in nanotechnology

Blacksburg, VA, July 6, 2006 –– After the Southern Technology Council and Georgia Tech surveyed the 13 Southern states on strength of small businesses in nanotechnology, NanoSonic, Inc., of Blacksburg, Va., emerged as the regional leader in terms of the overall dollar amount of contracts it received, as well as the number of grants awarded between 1995 and 2002.

The report, Connecting the Dots: Creating a Southern Nanotechnology Network, released in June, cited only five nanotechnology firms in the 13 states that received the upper limit of 14 to 39 Small Business Innovation Research (SBIR) program awards, totaling from $3.6 million to more than $10 million.

NanoSonic emerged as the leader in both categories with the 39 awards, totaling $10,347,956 in funding.

The SBIR program allocates a portion of 10 federal agency research and development budgets to contracts with small businesses, having fewer than 500 employees. Entrepreneurial start-ups companies such as NanoSonic use this program to fund early initiatives.

"The ability to obtain SBIR funding is a leading indicator of future private sector nanotechnology pursuits," according to the report.

Richard O. Claus, named Virginia’s Outstanding Scientist in 2001, and two colleagues founded NanoSonic in 1998. Started with three part-time employees, NanoSonic’s President Claus, also a faculty member holding a joint appointment in electrical and computer engineering and in materials science and engineering at Virginia Tech, was working on a materials contract with an entity outside of the University. In order to pursue work on this project, Dr. Claus founded the company in cooperation with Virginia Tech and the state of Virginia.

Since then, NanoSonic has exclusively licensed five patents covering electrostatic self-assembly (ESA) processing and use from Virginia Tech and has established its own intellectual property portfolio. In total, NanoSonic has 18 patents, with seven issued and 11 pending.

NanoSonic is building upon its relationships with a number of Fortune 500 companies that are interested in its unique self-assembly processing methods. Its introduction of a new family of advanced materials, Metal Rubber ™, manufactured using a nanotechnology process, has drawn much attention from industry and the federal government. As a result, NanoSonic is partnering with several defense and consumer goods manufacturers.

Metal Rubber ™, developed primarily by Jennifer Lalli, NanoSonic’s Vice President of Business Development and Director of its NanoComposites Research Division, was named a Top 50 new nanotechnology product in the Nano 50 th Awards for 2006. The actual presentation to Lalli will be given at the NASA Tech Briefs National Nano Engineering Conference in Boston in November.

“In ten years, NanoSonic would like to enjoy the reputation of being the leader in providing the low-cost, environmentally friendly manufacturing process for new materials, designed with constitutive properties to fit the commercial need, ranging from electronics to biomedical to aerospace industries,” Claus said.

Currently NanoSonic has 59 employees, and 37 are research staff who conduct both basic and applied research. Of these, 15 have Ph.D.s, eight have masters, and one is a scale-up engineer. The majority has less than 10 years of professional experience.

In its early years, SBIR awards accounted for more than 80 percent of NanoSonic’s revenue. Today, NanoSonic has moved away from SBIRs as its preeminent revenue stream, and more than 50 percent of its income will be non-SBIR for the next fiscal year.

“The SBIR awards were important for the initial growth of NanoSonic,” Claus explained. Typically, the company reinvested a portion of internal funds into product development. This also included patent acquisition from the US Patent and Trademark Office. In recent years, as the company transitioned from an R&D concern to a fully developed company, NanoSonic accelerated its direct marketing efforts with reportedly successful results. The SBIR awards helped to build the company’s technology base, and allowed it to pursue a whole suite of research projects.

“They allowed NanoSonic to bring in researchers with various kinds of expertise who offered new points of view and knowledge that was used to the company’s benefit. NanoSonic’s management perceives the SBIR program as a viable vehicle for getting small and large firms to cooperate, especially through the commercialization requirements attached to the grants. Now, NanoSonic is transitioning to other commercial resources.”

CONTACT:

www.nanosonic.com

540 953 1785