OCZ runs out of cash

OCZ has proven that all is not well in the SSD market by managing itself into bankruptcy.

One of the bright spots of the downturn was that SSDs had done well as every tablet in the land needed one.

However, OCZ’s bank accounts had been taken over by Hercules Technology Growth Capital, because the company had not paid back a loan.

OCZ did not comply with certain of the operating ratios and covenants in the loan agreement and the banks gave them all the company’s savings.

Toshiba, upon hearing of the company’s woes, agreed to all of the company’s assets in a bankruptcy proceeding. OCZ and Tosh have now completed negotiations on an asset purchase agreement.

Under the deal employees will all keep their jobs, but the company will have to file for bankruptcy. Of course Toshiba’s offer has to be accepted by the bankruptcy court, and this is by no means a done deal.

If the company is not able to agree to final documentation with Toshiba, the Company expects to imminently file a petition for bankruptcy and liquidate.