The board of ASX-listed RFID security specialists Mikoh have ousted chief executive Matthew Blomfeld seven months before the end of his contract, as the company continues to struggle with cash-flow issues.
Mikoh, which designs tamper-proof RFID (radio frequency identification) tags among other security devices, is currently trading at 5c per share, coming off a high of 70c in late 2007.
The company announced Blomfeld's departure on the ASX today, replacing him with "transition CEO" Dr Paul Scully-Power, who was brought into the company as group head of strategy and operations in December 2009.
Blomfeld's contract was due to expire in late September 2010, and the contract dictated that either party was required to give three months notice before termination. A spokesman for the company told iTnews that the date Blomfeld's contract was due to expire was "irrelevant" to the reasons for his termination.
The company said Mr Blomfeld "will not work out the remainder of his contract, but will be paid accordingly."
Mikoh chairman Peter Tyree said the company would now "reorient the company as a security solutions company."
Shares in the company have been suspended since February 15, pending the "announcement of the signing of a major contract."
The company requested its shares be suspended for two weeks. The company spokesman told iTnews that it has informally been told it has won a deal of "significant" size, and will request its shares trade again once this deal is signed off.
The freeze in trading was "unrelated" to the management reshuffle, he said.
Cash flow troubles
Mikoh's revenues have been on a steady decline in recent years - dropping from $2.2 million in 2003/04 to just under $800,000 in 2007/08, which was 9.6 percent down on the prior year.
The company's loss for the 2007/08 year was $4.9 million.
In the six months to December 2009, the company has lost a further $2.1 million, as of the end of December 2009 it only had $1.51 million cash left in the bank.
In the company's last annual report, former chairman Doug Halley begged shareholders to be "patient" and protect the company from the "general state of the stockmarket."
Halley stepped down from the Chairman's seat in June, 2009.
"While Mikoh's revenue aspirations were not met during the past year, progress was substantial, and the shortfall was largely due to external influences - in particular the fact that a number of Mikoh's target applications are large-scale, involving a substantial strategic decision on the part of the government or corporate end-user," Halley said.
"Patience is a well-tested virtue of Mikoh shareholders and your directors remain convinced that this will be rewarded."
A company spokesman said the company stands by forecasts of record revenues of $5.3 million in 2009/10.