In a fast-moving series of events earlier this month, the company warned that it was running low on cash, followed by:
On November 21, 2008, the company received a notice of default from investors Victory Park Credit Opportunities Master Fund, Ltd. "...with respect to a Forbearance Agreement dated May 31, 2008. The VP Notice set forth alleged events of financial default by Phantom under the Agreement, including the failure by the company to make installment payments of cash due."
Phantom management advised that it was unable to generate sufficient additional cash from operations or through debt or equity financing to satisfy its cash obligations and had been unable to amend the terms of the Agreement with Victory Park.
Consequently, the management said it did not believe the company could continue as a going concern, and terminated the employment contracts of all employees. Those departing included the Chief Technology Officer of the company, Herbert C. Sears.
On the same day directors Stephen Gesner and Shimon Constante resigned with immediate effect, followed by fellow director Konstantine Lucas on November 23rd.
At the end of October Phantom Fiber announced a mobile deal with Mahjong Time, and it is also known to have ongoing agreements with banking services firm Smart Ventures and Scientific Games, among others.
The last financial numbers for the company - Q3 of fiscal 2008 - showed the loss from operations had increased by $263 782 to $420 295, substantially up on the the comparative quarter in 2007 when a loss of $156 513 was recorded. After the net impact of other income and expenses the net income for the quarter ended September 30, 2008 was $599 287 compared to a net loss of $1 189 269 for the same period in the preceding year, a increase of $1 788 556. Total revenue decreased by $160 761 from $294 013 for the quarter ended September 30, 2007 to $133 252 for the quarter ended September 30, 2008, a decrease of 55 percent.
CEO and chairman Jeff Halloran, who has over 20 years of management experience in digital technology and telecommunications, founded the company in January 2002 after discovering the limitations of existing wireless technology during the implementation of an online banking system for a major Canadian bank.
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