An Adelaide-based technology company that made a name for itself building small, portable projectors has been placed in administration, just weeks after a major investor encouraged shareholders to join in on a class action.
The controversy also came mere weeks after Digislide Holdings seemingly hit a new high, after it won a deal to distribute gaming projectors through American retail chain Wal-Mart. However, in late December it entered voluntary administration.
The South Australian company has won a number of awards for innovation for its mini projectors, which have also been sold through Amazon.
However, since listing in 2009 the company has been on a downwards slide, losing 93% of its value.
Investor Mal Fraser-Clay told SmartCompany this morning after he loaned the company money, he was promised a number of changes that weren't actually made.
"I recommended a number of changes, they weren't taken up, and then voluntary administrators were brought in," he says.
The appointment occurred on December 22, when Peter Macks and Timothy Clifton of PPB Advisory were appointed. But Fraser-Clay says it went downhill from there.
"I then contacted every single investor, shareholder and associate that had been involved, and asked if they had similar circumstances. They all said they had. I sent the top 50 shareholders an email, and I heard back from people who are very angry."
The administration of the company has also changed hands. James Humphris and George Divitkos of BDO were appointed on January 18 – they were contacted this morning but were unavailable prior to publication.
While Fraser-Clay says he advocated a class-action, he doesn't believe it will actually occur.
"I think there are simply too many classes of people that are burned. I've heard of people who have had their loaned money converted into shares, I've heard from people who have lost millions of dollars."
Fraser-Clay now awaits the next creditors' meeting, but says he is surprised at the lack of knowledge from within the company itself.
The company, founded in 2003, designs small portable projectors. Since listing in 2009 offering $3 million worth of shares, the company has expanded by making new products for different niches, including gaming. However, its share price has fallen significantly since then, by 93%.
And in its annual report from the 2010-11 year, the company recorded a loss of $2.4 million on sales revenue of $325,904. The year before saw a loss of $4.7 million.
Chief executive Luceille Outhred was contacted this morning, but no reply was available prior to publication.
Fraser-Clay says he believes the administrators will now investigate the company's circumstances, although admits "this doesn't mean we'll get our money back".
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