Administrators called into Zylotech

IP security and surveillance distributor Zylotech was placed in voluntary administration under section 436A of the Corporations Act.

The Sydney company listed on the ASX that has operated for 10 years distributes Vivotek internet-protocol cameras, Hawkeye network video recorders, video-recording security software and services.

Its website said it counted among its customers Qantas, RMIT, Masterfoods and the NSW Roads and Traffic Authority.

Zylotech chairman Peter Granger said he stepped aside for the administrators to work through the issues.

"Due to a lack of funding the business can't continue," Granger said.

"We had no choice but to call in the administrators."

Andrew Needham and Barry Taylor of HLB Mann Judd were appointed as administrators.

Needham told CRN he had worked on the company's books for the past 24 hours.

"Essentially, the appointment means the corporation is likely to become insolvent," he said.

"My job is to take control of the company and ensure the creditors get paid.

"I have been in there for over a day and am looking at the contracts for the implantation of its products."

Needham said there's very little in the company's cash reserves.

"It's been burning $120,000 a month and with only $100,000 left in the bank, it had no choice but to appoint an administrator."

"The major shareholder has also said he would no longer put [in] any more money."

Mal Fraser-Clay confirmed with CRN that he was a major shareholder at Zylotech through Multi Vendor Support Service where he is chief executive officer and his own privately held company, DeanCorp.

"My investment so far in Zylotech exceeds $800,000 in loans and legal expenses and an additional $800,000 investment in buying shares," Fraser-Clay said.

"I was prepared to continue to fund and support the company but without the CEO's vision and a go to market strategy after five months of being in control, I could not afford to invest any more time or funds.

"I believe my stance then triggered the actions that took place last week."

Needham said Zylotech had trimmed its staff down to about 12 and three to four sub-contractors.

"Given its current reserves it would be hard for it continue to trade on," Needham said.

"I will keep drumming up some business and collect outstanding debts for the war chest, to make sure the creditors get paid.

"An initial creditors' meeting has been set for the first of September, by then we should know the direction of the company."