NORTH KINGSTOWN – The heady rise of American Biophysics Corp., maker of the Mosquito Magnet, ended this Monday when a Washington County Superior Court judge ordered the company into receivership.
Jonathan N. Savage, of Shechtman, Halperin, Savage LLP in Pawtucket, was named the company’s temporary receiver. He confirmed that the receivership had been requested by one of American Biophysics’ creditors, and that the company had been in trouble for some time.
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American Biophysics was honored by Inc. Magazine as the nation’s fastest-growing private company in 2003, and was named to Forbes Magazine’s Midas List of Hot Private Companies in 2004. The company and its mosquito trap have also been the subject many profiles in newspapers, magazines and even network TV.
“Founded in 1991,” the company’s Web site notes, “AmBio originated as a designer and manufacturer of specially engineered mosquito traps for surveillance by entomologists, state departments of environmental management, and the U.S. Department of Agriculture (USDA). The company adapted its technology for the consumer market with the launch of its patented Mosquito Magnet in 1998.”
The propane-burning devices are “designed to emit a precise amount of carbon dioxide, heat, octenol and humidity, while simultaneously vacuuming insects into a net, taking advantage of the mosquito’s instinct to turn upwards as it approaches the trap,” the site explained.
“No other mosquito trap has been scientifically and independently proven to be as effective as the Mosquito Magnet,” the company added. “Only AmBio traps have the extensive evidence from independent research studies, as well as data and testimonials from: the USDA; U.S. Army, Navy and Coast Guard; the Centers for Disease Control; numerous universities and state mosquito control agencies; health departments; and independent, nationally-renowned entomologists around the world.”
But the devices have been the subject of a number of legal battles, as AmBio charged competitors with infringement on its many patents.
And they – like a chemical attractant, released in 2004, that targets the Asian Tiger mosquito, a U.S. newcomer that is a possible carrier of diseases including West Nile virus – are the product of an aggressive research and development program AmBio said “has isolated over 330 compounds emitted from human skin and is continually scanning, separating, and introducing these compounds to mosquitoes.” The global program included the establishment in 2003 of an East African research center seeking ways to control the mosquitos that carry malaria.
The company’s other known difficulties have include labeling issues raised by the U.S. Environmental Protection Agency, for which AmBio agreed in 2004 to pay a $500,000 fine, and persistent problems with quality control.
AmBio blamed the quality issues and high return rate on Cowan Plastics, which it had contracted to make the Mosquito Magnet, and eventually brought a lawsuit against the Providence firm. The suit and countersuit, and the loss of the AmBio contract, appear to have contributed to Cowan’s failure this fall, Savage confirmed.
AmBio’s total debt appears to be between $6 million and $7 million, Savage said, including back rent and unpaid bills from vendors. But, he noted, the full financial picture is not yet clear, so other liabilities may be found.
Also not entirely clear is how the company’s financial troubles arose. Savage cited “operational issues – we’re not sure yet.”
The company is partly funded by Ritchie Capital, the AmBio Web site notes.
Asked about his plans for American Biophysics, the receiver replied: “Keep the company operating, stabilize operations and find a buyer willing to pay, obtain the best price we can – sell it as an operating business; that way, we can get the most money for the creditors.”
Additional information on the company and its Mosquito Magnet is available at www.ambiocorp.com.
By PBN Staff Writers Natalie Myers and Susan A. Baird
