Galaxy Online Inc. is blaming market conditions for the collapse of its deal with Tech Data Canada.
Tech Data had ordered 110 MDZR wireless routers from Moby Dark Inc., a wholly-owned subsidiary of Galaxy, in April. The deal was part of an earlier exclusive distributor agreement between the Mississauga-based distributor and the Toronto-based IP communications company.
According to a press release, Galaxy is unable to secure the financing to further develop the MDZR and, as a result, is unable to deliver the product. The company’s shares have been subjected to a cease trade order by the Ontario Securities Commission.
Galaxy failed to return several calls from ITBusiness.ca.
Ray Gonsalves, director of Xalyx and components for Tech Data Canada, said the news isn’t terribly surprising after Galaxy failed to deliver the product in June.
“They had said to us that there were some issues with the product in terms of moving it from a beta-type product to ready for prime and they were going to need about six weeks to be ready to do that,” Gonsalves said. “When that date came and passed it was pretty evident — to myself anyway — that they were having problems with the viability (of it) and we didn’t have a lot at that point invested either through dollars or effort, so I was going to take a wait-and-see approach to them.”
Gonsalves said he doesn’t believe Galaxy’s misfortune reflects negatively on the technology. He called its product interesting and said there is a place for a multi-point wireless router. He added if the technology is sold to another company he would consider negotiating another deal, but probably wouldn’t sign on again with Galaxy.
“When we start enlisting, recruiting and getting the VARs out there to promote the product,” said Gonsalves, “we have to be sure at that point it’s a company or a technology that is going to be there in the long run. I don’t want to put our credibility on the line when we get to that point, nor any of our VARs with their end users.”