The shell left behind after Hemisphere Technologies sold its assets to a foreign investor has gone into liquidation with debts of nearly $5 million, including hundreds of thousands of dollars owed to security vendor Kaspersky.
Just a month after its assets were acquired, the company now called "ACN 152 546 453 Pty Ltd" – formerly Hemisphere Technologies – owes $4.9 million to unsecured creditors including the Australian Taxation Office ($1.6 million), Beyond Trust Software ($810,000), Portfolio IT ($1.4 million) and Kaspersky ($295,000).
According to documents lodged with corporate regulator ASIC, Riad Tayeh and Suelen McCallum of DVT Group were appointed liquidators on 17 January 2017 and the business stopped trading. A special resolution was passed that the company be wound up.
In December 2016, Hemisphere Technologies' assets were acquired by Hong Kong business investor Harry Cheung who has become a shareholder along with managing director Andrew Mamonitis.
Mamonitis was previously managing director of Kaspersky ANZ, while Cheung was managing director of Kaspersky APAC.
Kaspersky had been Hemisphere's top vendor until the security vendor filed a lawsuit against the company over alleged unpaid royalties.
Mamonitis told CRN that the company under liquidation, ACN 152 546 453, had no bearing on the new Hemisphere entity, and that this new entity purchased Hemisphere's IP and registered a new company under the same name.
"The Hemisphere management team, backed by private investment, have purchased certain entities and assets which make up the core of the Hemisphere business. The new owners are excited about the prospects of the business moving forward," said Mamonitis.
"The Hemisphere business consisted of a number of entities. ACN 152 546 453 Pty Ltd (formerly known as Hemisphere Technologies Pty Ltd) will not form part of the Hemisphere business moving forward. The liquidation of ACN 152 546 453 Pty Ltd (formerly known as Hemisphere Technologies Pty Ltd) has no bearing on the continued operation of the Hemisphere business," Mamonitis told CRN by email.
Following the acquisition, Hemisphere director Peter Phokos said in a statement early January he had left the company and was "not a part of Hemisphere Technologies’ new business model".
Next: Battle in court
In October, Kaspersky Lab terminated its distribution relationship with Hemisphere. According to court documents, Hemisphere claimed the deal had been wrongfully terminated.
During the hearing at the Supreme Court of New South Wales on 14 October 2016, judge Bergin said: "The plaintiff [Kaspersky] claimed that the defendant [Hemisphere] owed it royalties. In late 2015 / early 2016, the defendant entered into a payment regime over a period of months of approximately $100,000 per week in respect of its obligation to pay the plaintiff royalties."
An agreement was reached on 26 July 2016 "that certain credits would be brought to account in the defendant’s 'ledger', on the condition that the defendant would continue with the previously mentioned arrangement of paying $100,000 per week to the plaintiff".
Hemisphere believed that the credits were not brought to account as anticipated and it continued to pay the $100,000 for another two weeks.
CRN reached out to Kaspersky Lab. The company would not comment on the $295,000 debt owed by its liquidated distributor, but told CRN: "Kaspersky Lab is confident that it always acted in accordance with the agreement and fair market practices in its dealings with Hemisphere Technologies, including during the course of the commercial relationship, the termination, and now in ongoing judicial proceedings."
Because of the ongoing legal case, the security vendor said it could not provide additional comment.