Rosscomp Ends Operations During Solvency Inquiry

Rosscomp Corp. said it has suspended operations while executives negotiate with creditors and prospective buyers to determine whether the company will survive.

The ailing Santa Ana computer parts maker said it received from creditors a second notice of default for non-payment of more than $100,000 in interest and principal on $938,000, two-year convertible subordinated notes. The note holders, described by Rosscomp only as a small group of venture capitalists, delivered the first default notice in January. The company now owes more than $1 million on the notes.

Rosscomp said its assets, should they be collected and sold, will not be sufficient to cover the secured notes. Additionally, Rosscomp owes its trade creditors more than $600,000.