IDC survival hangs in the balance of shareholder vote, says auditor

Should International Datacasting Corporation shareholders reject a proposed acquisition by Winnipeg’s Novra, it could mean the end of the road for the Ottawa company, according to a recent auditor’s report

“In the event IDC is unable to close this transaction, management anticipates that it may have to consider an orderly shutdown of IDC’s operations,” KPMG wrote in a recent audit of IDC’s fiscal year-end results.

KPMG cited several reasons for its assessment, including significant operating losses at IDC over the last four years that caused negative cash flow in all but the latest of those years. It also pointed to the firm’s accumulated debt of $26.8 million, its lack of credit facilities and recent management departures.

“The Corporation’s available liquid assets at January 31, 2016 may be insufficient to fund future required working capital,” KPMG wrote.

IDC reported fiscal 2016 revenues of $8.5 million, down from $10.3 million in fiscal 2015.

Gross profit for the year ending Jan. 31, 2016 was $4.4 million, a slight decrease from the $4.8 million the company reported the year before.

The broadcast technology provider did manage to reduce its net loss to $3 million, or five cents per share, from $4.3 million, or seven cents per share.

IDC shareholders will vote on the proposed acquisition May 30, and interim CEO Steven Archambault told OBJ recently he is confident the deal offering cash and Novra shares will be approved.