OrbCare Investor Eyes Financial Mishandling As Firm Seeks Buyer

The would-be chief operating officer of healthcare workflow management startup OrbCare pointed to financial mishandling and lack of oversight behind the company’s financial troubles, which have led the firm to seek a buyer while it wavers at the point of bankruptcy, BetaKit reported Sunday (Sept. 15).

Canada-based OrbCare, which provides cloud-based workflow management solutions for healthcare service providers, along with its subsidiaries Pariscribe and OrbCare U.S., reported owe a combined $1.5 million to creditors, including termination pay for former workers and debt owed to the Canada Revenue Agency, reports said, citing documents filed with the Ontario Superior Court of Justice.

Revelations of its financial troubles follow six months after OrbCare announced $2 million in seed funding.

The investment was led by iGan Partners, which subsequently provided a $1.2 million loan to the company, and whose partner Olivier Giner planned to leave the venture capital firm to join OrbCare as its chief operating officer. That plan was put on hold in early May.

According to Giner, once he obtained access to the company’s financial records, it became clear that something was amiss.

“I learned gradually that OrbCare’s financial reporting was quite out of date and that no recent monthly or annual statements were available,” Giner said in an affidavit provided to the court. “OrbCare did not maintain adequate customer records and did not diligently keep track of customer invoicing and accounts receivable. I learned, for example, that certain entities which I had been told were current customers of OrbCare had in fact never been customers, or ceased to be customers of OrbCare or any of its subsidiaries.”

He added in his affidavit that OrbCare’s finances “represented significantly lower revenue” than what the company had publicly stated.

OrbCare Founder Manny Abraham told the publication in a previous interview that the company’s bankruptcy came about because the company “was mismanaged earlier this year because my attention was not there.”