Manabars Technologies has failed to raise $1 million in funding and is insolvent, investors were told yesterday.
A letter issued yesterday informed shareholders the "conservative attitude of NZ investors combined with the general investment climate that is heavily influenced by the finance company meltdown has impeded our prospects".
Manabars has developed a technology it says delivers a new, and secure, way to link computers over the internet. It informed shareholders in a July meeting it intended to issue 1.4 million shares to raise $1 million to meet technical, development and marketing efforts. However, yesterday's letter say the company has exhausted its reserves.
"We regret to inform you that 'MTL' has exhausted its reserves and is unable to meet its financial commitments," the letter says. "In short, 'MTL' is insolvent and must close down, unless someone is able to provide an immediate and significant injection of cash. Our staff has been informed and are no longer employed by the company."
Chief technical officer David Hughes told Computerworld a number of investors have approached him to continue developing the technology.
"We've completed the technology from a patent point of view and universities are cross-checking it on the peer-review side," he says.
"I'm looking to a number of investors who have been very supportive and want to move forward in a different vehicle," he says.
"It's an exciting time for the technology," he says.
Hughes was unable to comment on whether the insolvent vehicle, Manabars Technologies Ltd, would be able to meet its debts. He says a clearer picture will emerge over the next couple of weeks.
The intellectual property used by that company is owned by another company, Manabars IP Ltd. Hughes says the licence of that technology to Manabars Technologies will be terminated "fairly shortly".
Despite not owning the intellectual property, the proposed share issue and price would have valued Manabars Technologies at $20.6 million.
A Companies Office search show Manabars Technologies shares are fairly widely held, while Manabars IP Ltd is wholly owned by Kevin Martin, of Orakei, Auckland.
In a press release issued in July the company said approximately 200 shareholders had invested in excess of $1.5 million in developing its technology, with NZ government grants contributing over $100,000 in the past two years.
That release further explained the technology: "MTL has gone to the source of the fire and reengineered computer hardware. The hardware architecture is founded in mathematical Set Theory, which guarantees total security. Set Theory breaks all information into containers similar to directories and is known as Sets. The instructions in the CPU only allow access to information inside containers, but never outside. This fundamental premise ensures software cannot attack other software because it doesn't have access to the container.
"MTL has taken the hardware design, patented it and built the Manabars Network — a software platform that cannot be hacked and enables applications to leapfrog to an internet orientated deployment."
The Foundation for Research Science and Technology website shows grants totalling $12,756 have been made to "Manabars Internet Joint Venture Partnership".