Unified Science - Case Summary

Business Description

Headquartered in Osceola, Wisconsin, Unified Science, LLC, which does business as United Science, provides a range of consulting and manufacturing services to the pharmaceutical and nutraceutical industries.

• The Company’s services include product development, process engineering, analytical development, and compliance.
• Unified offers specialized drug formulation to optimize absorption, develops functional foods and dietary supplements, and operates a lab focused on high-quality natural ingredients.

Unified serves a global client base, with current or completed projects in North and South America, Europe, Africa, Asia, and Australia. The Company notes that it has built a significant pipeline of international business opportunities.

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Corporate History

Unified Science was formed as a Minnesota limited liability company in 2007 by its sole member and CEO, Jon Thompson, who holds a doctorate in chemistry. While organized in Minnesota, the Company maintains its primary assets and operations in Osceola, Wisconsin.

Affiliate Structure and Prepetition Merger

• In April 2019, the Company’s CEO formed JDT, LLC to hold its primary real estate assets—located at 500 Simmon Drive and 811 Pine Street in Osceola—as a means of protecting the properties from operating liabilities.
• Nemadji Management LLC was formed in 2018 and is 51% controlled by Mr. Thompson. The affiliate was established to pursue smaller business opportunities outside of Unified’s core focus, manufacturing botanical-based ingredients using Unified’s excess R&D capacity.
• United Science IC Disc. Inc. is a wholly owned subsidiary formed for tax planning and foreign payroll purposes.
• Prior to the bankruptcy filing, JDT was merged into Unified to streamline the reorganization process. As a result, Unified now directly owns the business real estate. The Company states that because it was already an obligor on the associated debt, the merger had no material impact on creditors.

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Operations Overview

Unified currently employs 22 individuals, including 21 full-time and one part-time staff member, in roles spanning accounting, sales, research and development, and production. The Company’s biweekly payroll expense is approximately $77,000.

Workforce and Benefits

• In 2024, Unified consolidated its workforce by moving all but one employee from its affiliate, Nemadji Management, onto its own payroll.
• A single employee remains on Nemadji’s books for health insurance purposes but performs services for Unified, which funds the salary via an intercompany transfer.
• The Company provides employees with a variety of benefits, including health, dental, vision, and life insurance, as well as a 401(k) plan with a 100% company match on employee contributions up to 3% of compensation.

Cash Management and Accounting

• The Debtor operates a centralized cash management system with accounts at Union Bank & Trust and Byline Bank, which includes an operating account for collecting receivables and a dedicated payroll account.
• The Company utilizes an accrual-based accounting system. Under this method, the full value of a multi-year customer contract is booked as an account receivable upon signing, prior to work being performed. Cash is subsequently generated as project milestones are achieved.
• Nemadji Management currently has no active contracts or tangible assets and utilizes excess capacity at Unified's R&D facility to fulfill orders.

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Prepetition Obligations

As of May 2025, the Debtor’s primary funded debt obligation consists of approximately $10.8 million in principal and interest owed to Byline Bank. The Company also reports approximately $77,153 in accrued prepetition employee compensation.

Secured Debt

• Byline Bank Facility: Approximately $10.8 million is outstanding under a loan facility originating from a September 2021 refinancing.
  • The original debt totaled $10 million across three promissory notes and is secured by liens on the Company’s real estate and a general business security agreement covering its other assets.
  • The obligations are guaranteed by affiliate Nemadji Management LLC and CEO Jon Thompson.
  • Byline Bank’s liens are believed to encumber the Debtor’s cash on hand of approximately $117,000 and accounts receivable of approximately $3 million. The Company notes that its collateral, including real estate and equipment, is worth substantially more than the debt owed.

Unsecured and Employee Obligations

• The Company owes $293,175 to Tradewind for an equipment purchase, which it believes is unsecured due to an unperfected security interest.
• Unified estimates it owes approximately $77,153 for employee wages and related taxes for the prepetition pay period running from May 4 to May 17, 2025. The Company was otherwise current on its payroll and trade debt obligations.

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Events Leading to Bankruptcy

The Company’s financial distress follows a period of significant growth, which saw revenue increase to $23.7 million in 2019 and earned it recognition from Inc.5000 as one of the fastest-growing private companies in the U.S. in 2020.

Pandemic-Related Disruptions

• Beginning in mid-2020, Unified’s operations were severely impacted by the global pandemic, which disrupted supply chains and limited its ability to engage with customers at tradeshows and facility visits.
• The Company reports that at least $13.7 million in signed contracts failed due to shutdowns and international travel bans, which also resulted in the loss of more than two years of international business development opportunities.
• Concurrently, inventory swelled to $7.1 million as domestic vendors enforced delivery of pre-pandemic orders. Subsequent supply chain issues, including "indeterminable" lead times for critical components, further delayed the Company's ability to fulfill new orders and damaged its credit rating.

Default and Failed Workout

• Unified maintained its loan payments to Byline Bank until May 2023, at which point it defaulted. After attempts to resolve the default by securing new business and investors were unsuccessful, Byline Bank filed a lawsuit against the Company, its affiliates, and its CEO in April 2024.
• The parties negotiated a stipulated judgment that provided for a foreclosure on the Company's real estate but delayed entry of judgments against Unified and other parties until after Dec. 1, 2024, to allow time to secure new investment.
• Despite ongoing negotiations, a capital infusion did not materialize, leaving Unified without the liquidity to cure the default.

Chapter 11 Filing

• In December 2024, Byline Bank scheduled a sheriff’s sale of the Company’s real estate and obtained a replevin judgment for its equipment.
• To avoid liquidation and preserve its operations, Unified negotiated a stay of the real estate sale through May 19, 2025, and filed for Chapter 11 protection on that date.