(Bloomberg) -- Ambri Inc., which has been trying to build an industrial-scale battery for 14 years, filed for bankruptcy after it ran through all the cash it had received from investors, including firms tied to Microsoft Corp. co-founder Bill Gates and hedge fund billionaire John Paulson.

The company plans to sell itself to noteholders unless a proposed auction yields a better offer. Those noteholders include Gates Frontier, and Paulson Partners, which will loan Ambri an additional $9.5 million to pay for the Chapter 11 case, according to court documents.

Ambri was founded in 2010 by two researchers who developed a “liquid metal” battery while at the Massachusetts Institute of Technology. The company has raised $150 million from equity investors and borrowed $42 million by issuing secured notes, Ambri’s chief financial officer, Nora Murphy, said in a court filing.

The company blamed its bankruptcy on an inability to raise enough money to complete a battery factory in Milford, Massachusetts. Ambri lost one of its anchor investors, who had initially agreed to back the project, and was forced to cut back spending. Eventually, its building contractor and landlord demanded payment, Murphy said in court papers.

While under court protection, Ambri will hold an auction in the coming months for its 103 patents and other assets related to the battery venture. Representatives of Gates Frontier and Paulson & Co. did not immediately respond to requests for comment.

Under the company’s proposed auction rules, the noteholders will make an initial bid worth $38 million, using the debt owed to them instead of cash. Should no higher bid come in by June 20, the noteholders would cancel the debt and take over Ambri.

The proposed new loan and the auction must be approved by US Bankruptcy Judge Laurie Selber Silverstein, in Wilmington, Delaware, who is overseeing the bankruptcy case.

Company founders Donald Sadoway and David Bradwell had developed a new technology they believed would be cheaper and more effective than traditional lithium-ion batteries, according to court papers.

Ambri finished a handful of test projects, including one used by Microsoft, and had planned to begin selling its large battery packs to utilities and other industrial users to store large amounts of electricity.

The case is Ambri Inc., 24-10952, US Bankruptcy Court, District of Delaware (Wilmington).

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