Rim Semiconductor goes up for sale

Rim Semiconductor is seeking acquirers after the company defaulted on its loans and was locked out of its own offices for failing to pay rent.

“The board has decided to explore selling all the assets, the technology and the patents,” Brad Ketch, Rim’s chief executive officer, told Telephony in an interview Monday. “We’ve had some cash flow problems for quite some time. We’ve been successful over the last few years in raising the money we needed to move forward. But in the last few months, that’s been real tough for us to do. It’s real scary for investors these days. The hedge funds that have backed Rim have not been able to supply what we need.”

In 12 profitless years, Rim raised some $90 million and made a few acquisitions (even dabbling in the movie business), eventually settling on its most recent focus: “IP subscriber line,” proposed as a faster, more efficient alternative to DSL that makes dynamic use of upstream and downstream bandwidth. In January the company hailed a chip capable of sending 40-Mb/s of data over 5,500 feet of 26-gauge copper.

But Rim faced an uphill climb, as the technology, in order to be useful, would need to be included in both access networks and customer premises gear. Efforts to standardize the technology were in their infancy as Rim’s cash flow problems mounted.

This summer the company defaulted on loans it secured last year, giving its lenders the option of demanding full and immediate repayment or taking possession of (or forcing the sale of) all of Rim’s assets, including any products under development.

“It’s been a couple months; they have not foreclosed yet,” Ketch said. “They’ve not shown any interest in doing so. These guys are stock traders; they’re not technologists.”