THE BOARD of Dublin-based Zapa Technology has appointed a provisional liquidator to the company after running into funding difficulties.
The company, founded in January 2009 by businessman John Nagle, owes more than €700,000 to trade creditors, which it cannot repay.
It had accumulated losses of €6.5 million by the end of September 2010.
Michael McAteer of Grant Thornton was appointed provisional liquidator on Thursday.
It is understood that Grant Thornton will place an advertisement in a national newspaper tomorrow seeking expressions of interest in the business. Offers are to be submitted by 5pm next Wednesday. In the meantime, Zapa continues to trade. It employs eight staff.
Zapa, which was backed by venture capital group Delta Partners, is involved in so-called near-field communications. The Zapa Tag can be used to make payments in stores, collect loyalty points and rewards, redeem coupons and special offers, pay for tickets on transport, access events, get information from media sites, and download product details.
Zapa receives a percentage of each transaction.
According to an affidavit submitted to the High Court by Jon Griffin, a director of Zapa, the company has secured seven contracts with retailers, including the Insomnia coffee chain here. This involves more than 250 terminals in about 60 retail outlets in Ireland and Britain.
It has also received a letter of intent from a “significant company in the UK which would conduct in excess of 370,000 transactions per day”, Mr Griffin said.
He said that to “maintain a strong position” in the market, Zapa needed to develop and roll out a “smart tag reading terminal network” to retailers.
This required additional funding of €15 million to €20 million, which could not be secured.
A phased roll-out, costing between €1 million and €2 million, was also considered but, again, funding could not be obtained, Mr Griffin said.
Shareholders loaned €374,000 to the company in July and August this year. A demand for the repayment of this has been made but Zapa is unable to pay the sum.
Mr Griffin said Zapa was “insolvent and unable to pay its debts as they fall due for payment”.
He said a creditors’ voluntary liquidation was considered by the board but it chose instead to appoint a provisional liquidator to “preserve the goodwill and value of the company’s assets and to seek a purchaser for them”.
No comment was available yesterday from Mr Nagle or Delta Partners.
This is the second business venture of Mr Nagle’s that has run into difficulties in recent years.
In 2008, he was sacked by Payzone, the Irish e-payments group that he created from the merger of Irish payments group Alphyra with UK ATM operator Cardpoint.
Payzone was subsequently restructured and delisted from the stock market, with equity holders, including Mr Nagle, having their investments wiped out.
