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Business Observer Friday, Oct. 12, 2007 14 years ago

Power Source

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Solicore, a tech company and thin film battery manufacturer, is gearing up to take advantage of a patented polymer product.

Power Source

manufacturing by Dave Szymanski | Tampa Bay Editor

Solicore, a tech company and thin film battery manufacturer, is gearing up to take advantage of a patented polymer product.

It's like stumbling into a scene from a James Bond movie.

Workers walk around "the dry room," a low-humidity environment, in lab suits and masks. Security is tight. They quietly work in shifts, 20 hours a day, cocooned in a plain, 40,000-square-foot warehouse-like building.

There's something interesting going on at Solicore Inc. in Lakeland. It's not espionage, although CEO Dave Corey wouldn't mind taking over the world with his products.

Solicore, founded in 2001, is a thin-film battery company with several patents that provides solid-state batteries for credit cards, power cards, financial transaction cards, radio identification cards and medical devices.

The name comes from the term "solid core," as in a solid-core, ultra-thin, flexible, lithium polymer battery, which is the kind Solicore makes.

In May 2004, Solicore brought in Corey, a self-named "hired gun" who has led organizations through successful initial public offerings, after it received its second round of venture capital.

Corey then raised a third round of VC money, bringing in another $15 million. The investors included Draper Fisher Jurvetson of Menlo Park, Calif., one of the top five VCs in the nation that recently helped sell Skype to eBay for $3 billion.

The total venture investment from the three rounds at Solicore was about $39 million. It has opened a sales and marketing office in Finland and signed a number of distribution agreements in Asia. It will soon announce new board appointments that will help the company manage and drive its growth.

Until now, it's been "flying below the radar," Corey, 47, admits, because it has been organizing, planning, investing in production, doing research and development, getting patents and raising capital. But the company knew that it had "some cool stuff" that many industries would be interested in.

Even though it makes batteries, Corey refers to Solicore as a technology company, because it is looking at other applications. Its Web site calls the company, a "worldwide leader of embedded power solutions."

Began with a merger

Solicore was born through the merger of Skylab, a Jacksonville technology company, and Leading Edge Technologies, a Lakeland company that made equipment for battery manufacturers. One of Leading Edge's customers was a joint venture company that involved Duracell, which made batteries for electric cars.

When the companies merged, managers decided to get out of the equipment manufacturing business and instead, use their innovation and products to make batteries. Executives chose Lakeland as the headquarters because three of the founders were from Lakeland.

At the heart of this new company is what Corey calls "the secret sauce," a patent-protected product called polymer electrolyte, a solid substance inside the battery that allows for the transfer of ions. Previously, this was a liquid.

Creating a solid, then putting it in a minute, thin battery was unique for a number of reasons, including strength to withstand elevated temperatures and flexibility for use in applications like credit cards, gift cards and medical devices.

Part of the market improved when legislators passed laws forcing banks to have increased security on credit card transactions. That created a need for thin film batteries, which power devices to check identification.

Corey, a St. Petersburg native, brings 24 years of experience at other private and public technology companies, some of which went public. He has been a senior executive and entrepreneur at companies such as AT&T, Westell Technologies, Southern Bell, Daleen Technologies and DaCo Solutions Group.

He has experience in executive leadership, building private and public companies, raising private and public capital, leading organizations through a successful initial public offerings, mergers, acquisitions and driving business results.

Prior to Solicore, Corey most recently held positions as founder and president of Daco Solutions Group and President/COO of Daleen Technologies.

Thousands of units

Corey would not reveal revenues at the privately held firm, but did say that they've grown around 20% a year the past two years. He said it is shipping, "tens of thousands of units." Next year, it hopes to ship out, "millions and tens of millions." Fueling this is the explosion in credit, debit and gift cards, which are on the market an average of 14 months each. Solicore's batteries last up to three years.

One example of those new cards is a pilot program at Bank of America. Next year the bank hopes to distribute new wallet-sized SafePass cards to its online brokerage customers. The card will generate a code, required for certain transactions, when you press a button embedded on the card.

Some gift cards will play, "Happy Birthday to You," at the press of a button.

Solicore has invested $15 million in equipment and now has the capacity to produce 40 million to 50 million batteries a year. Long-term, Solicore wants to open other facilities around the world to produce products with its polymer.

"We are positioned for explosive growth," Corey says. "Off the charts."

The biggest issue for the company now is getting still more new equipment for manufacturing. It is highly automated machinery. Only about 12 of its 40 people work in manufacturing.

A merger or IPO is the future of Solicore in the next three to five years because the company needs to give investors a way to recoup their money. So Corey is positioning the company for that. He has done it before. He calls himself "a hired gun," brought in by investors to do this. Venture capitalists own about 75% of Solicore.

"We're looking for a liquidity event," Corey says.

Corey lives with his wife Leann and nine-year-old twin children in South Tampa. He earned an engineering degree from the University of Florida and an MBA at night at the University of South Florida. He has a 32-minute commute eastward to Lakeland each morning because most of the traffic is going west to Tampa.

Solicore's building sits among some old-line companies such as Pepperidge Farm and Coca-Cola.

"You can see us from I-4 and you'd think we were some ol' manufacturing facility," Corey says.

But 007 knows that's only half right.

REVIEW SUMMARY

Company: Solicore

Industry: Thin-film battery-manufacturing for credit-card size applications.

Key: Provide technology solutions with the company's patented technology.

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