Syscan’s bankruptcy is a result of the Letter of Demand it received on November 21 for the C$207,520 ($168,000) bridge loan that it owes to Switzerland-based Bluehill ID.
The loan was initially taken out in August for C$150,000 but since then has been increased by C$50,000 and the debt has also grown because of interest.
Since receipt of the letter Syscan claims to have been attempting to secure a loan or achieve the sale or merger of the company but has been unsuccessful. Having been unable to find additional funding Syscan has filed under the Bankruptcy and Insolvency Act.
This results in a Trustee being appointed by the Court to deal with creditors. Following this all members of Syscan’s board resigned.
In the company’s financial results for the year ending June 30 it was evident that it had significantly eaten into its cash reserves. For the 2007 report Syscan had just over C$500,000 but by the following year this was reduced to a little more than C$200,000.
Without these cash reserves, and with credit increasingly hard to obtain, the company was unable to pay Bluehill. Other aspects of the company’s financial report did not suggest that the situation was too dire, although there was a larger operating loss than in 2007.
In the latest results Syscan posted an operating loss of over C$900,000, compared with just under C$700,000 for the previous year, despite sales more than doubling over the same period due to increased overheads.