Cognotec is known to have faced a similar situation back in 2003. The company then went on to win several major contracts in 2004, even though founder Brian Maccaba’s attention was diverted by a high-profile court case in the UK.
The icing on the cake appeared to come at the end of 2004, when Cognotec started working on a margin trading platform for UBS. Although by this stage Cognotec had successfully developed several other significant relationships, the UBS deal was seen as so lucrative that it became the company’s main area of focus. UBS has declined to comment.
By the end of 2005, UBS is believed to have given Cognotec until April 2006 to deliver the first stage of the project. The company accepted the challenge but failed to deliver on time. As the project ran on, Cognotec apparently started to run into liquidity issues. UBS is then said to have offered Cognotec a loan, payable against delivery of the system. Cognotec chose not to accept this and instead secured alternative funding from a UK bank in 2006.
It seems that Cognotec is now in discussions with its bankers about whether the terms of that loan are the right ones to take the company forward.