Retirement didn’t last long for Dr. Mansour Mohamed, founder of three-dimensional fabrics and composites development company 3TEX. Not even two months ago Mohamed turned 65 and stepped down from his 4-year-old concern, but today he’s back in the saddle as chief scientific officer.

Droopy sales and quickly drying cash reserves are forcing other changes in the management team at the Cary-based startup. The board has voted to appoint Chairman Ken O’Herron, 52, to the role of chief executive, replacing former CEO and President Brad Lienhart. Lienhart, one of the largest shareholders of the company, assumes the position of vice president of sales and retains a seat on the board.

One of the first things O’Herron did as CEO, he says, is ask Mohamed to return to 3TEX full time. “This is a very technical product, and no one knows the technology better than he does.”

Since Mohamed’s departure, 3TEX has slashed its staff by half to 20 in a second round of layoffs and reduced its burn rate by 75 percent.

Former CEO to focus on sales

“We’ve had problems getting from a research and development company to a commercial company,” says O’Herron, whose background is in finance and money management. “[Brad’s] skill set is in sales, and the board decided we needed to give him more time on the road to push sales. From the standpoint of the company, he understood that he had to get out and make sales happen.”

O’Herron, an early investor of 3TEX who’s working without pay, says 3TEX offers a product that attempts to change the way companies have been doing business for the last 15 to 20 years. When 9/11 hit, most of 3TEX’s sales orders were pushed back, since most companies became reluctant to move forward with capital expenditures and new technology. The vast majority of those orders continue in a wait-and-see pattern.

3TEX’s claim to fame is the three-dimensional weaving technology developed by Mohamed, and funded by grants from NASA, when he was a professor at the College of Textiles at NC State University. This method of weaving together fibers enables companies to produce composite materials that are stronger than steel, lighter than aluminum and less costly.

The company is now focused on working with three primary customers: FRP, a subsidiary of Ashland Chemical; Adelphi Automotive; and Second Chance, a manufacturer of soft concealable personal body armor in the U.S.

FRP is a composites company with a strong presence in the marine industry, and 3TEX is partnering with it to leverage FRP’s 72 salespeople. 3TEX also is exploring opportunities with Boeing.

More financing is likely

The company will be seeking a round of bridge financing in the neighborhood of $500,000 to $1 million, says O’Herron. “The plan is that it will take us to cash-flow break-even, which is about six to nine months out.”

It’s likely 3TEX will need new money for working capital even after break-even, he says.

Since the company was founded in 1998, it has raised approximately $15 million from DB Capital, an affiliate of Deutsche Bank A.G., and more than 100 private investors.

Despite the dire straits the company is in, O’Herron remains optimistic.

“I have competitors telling folks we’re bankrupt. I can’t stop the rumors, but I know the lights are one, the phones are working and I just saw orders go out the back door,” he says. “And, we have Fortune 500 companies telling us we have a great product that will change things and make things happen.”