R.I.P. IYSA>
We do not have sufficient funds to meet our financial obligations over the next twelve months. During the three months ending September 30, 2006, Air Arabia, a large client of the Company in the Middle East, terminated their contract with the Company, causing a significant loss of recurring revenue. In addition, ACOA, a major creditor of the Company caused the debt owing them to become due and payable. The management believes that the aggregate value of the Companies' assets is substantially less than that of its liabilities to its creditors.
As a result of the foregoing, the Company and its subsidiaries filed with the Queens Bench of the Province of New Brunswick, Canada, a Notice of Intention to Make a Proposal under the Canadian Bankruptcy and Insolvency Act (the "Notice of Intention"), as further discussed below.
The Notice of Intention was filed by the Company on August 7, 2006. On October 4, 2006, the proposal submitted by InteliSys Aviation Systems of America Inc. (the "Registrant") and its subsidiaries in the Court of Queen's Bench of the Province of New Brunswick, Canada was approved by the Court. Pursuant to such proposal, a new company consisting of the existing employees of the Registrant and a group of new equity investors ("Newco") will acquire all the assets of the subsidiaries of the Registrant (the "Subsidiaries"). The consideration for such purchase will consist of $200,000 CDN in cash and $250,000 CDN in 3-year 8% notes to be issued by Newco (the "Newco Notes"). Such notes will be secured by all the assets of Newco.
In accordance with the terms of the proposal, the secured claims of the creditors of the Subsidiaries will be assumed by Newco (there are no secured creditors of the Registrant). The unsecured claims of the creditors of the Registrant are to receive $1,250 CDN within two months of court approval of the proposal. After the payment of fees and any taxes owed pursuant to the Income Tax Act (Canada), the Class A Unsecured Creditors of the Subsidiaries shall receive $150 CDN in cash for each claim, the balance of cash from the sale of assets after payment to secured creditorsand the balance thereof by having their respective proportion share of the Newco Notes. The Class B Creditor ( the Registrant ) shall not receive any cash or Newco notes from the sale of the subsidiaries. The Class C creditors ( the employees of the subsidiaries ) shall receive $50,000 CDN in Newco notes to be distributed on a prorata basis.
secinfo.com |
