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LATEST UPDATE ON K

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André S said:
Hmm

is there any explanation why they ended up in such a situation like this?
And sorry for asking... but, is it possible to let us know how much money is needed to get them out of this situation and to get back to normal.?
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I think the interview posted in the other thread is very revealing. I took away that they were expected a higher degree of product ramp up this year (I.e. Revenue), but this was slowed by them having to take on more of the functional work to develop product integration/features after the chip manufacturer dropped. They originally thought they would get a lot of help from them. If they would have made their original timelines, they would likely have come out OK. I think they just need to finish some of the key developments so the products are fully integrated (e.g. Disk Server playable from a Strato, 4K/HDR). They seemed so close to the finish line on several of these areas. With some cash, maybe they could finish and take time off to generate revenue as the solution was well received by many. SJ
 
cinelife said:
It's just money. It is not about debt, there is very little. I will not publicly discuss the specifics, but suffice to say they are working on several options. In all situations like this, it is always about money. What is different from company to company is how that money needs to be applied to fund a recovery. Those discussions are ongoing.



Jim
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Cinelife explained this in an earlier post. Essentially, debt isn't an issue, but instead that some higher than expected costs, combined with a vendor problem, let to a cash flow company.

A lot of companies run relatively tight in terms of cash reserves and it can be challenging to make payroll if there are any bumps in the road.
 
I hope it works out and Jim thanks for the encouragement for those of us who are invested in a system or otherwise.
 
SJHT said:
I think the interview posted in the other thread is very revealing. I took away that they were expected a higher degree of product ramp up this year (I.e. Revenue), but this was slowed by them having to take on more of the functional work to develop product integration/features after the chip manufacturer dropped. They originally thought they would get a lot of help from them. If they would have made their original timelines, they would likely have come out OK. I think they just need to finish some of the key developments so the products are fully integrated (e.g. Disk Server playable from a Strato, 4K/HDR). They seemed so close to the finish line on several of these areas. With some cash, maybe they could finish and take time off to generate revenue as the solution was well received by many. SJ
Click to expand...


That's a fair read, these things are always so complex, impossible to point to a single factor, but this company CAN recover, if given the opportunity to move forward. Having spent some time looking at all of this over the past several days, I can say that K can be fixed. It will take a little time, but it can happen. We'll see.



Jim
 
cinelife said:
That's a fair read, these things are always so complex, impossible to point to a single factor, but this company CAN recover, if given the opportunity to move forward. Having spent some time looking at all of this over the past several days, I can say that K can be fixed. It will take a little time, but it can happen. We'll see.



Jim
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Regardless of the ultimate outcome, you (and ex K employees) providing some insight and information about what has happened and what might happen going forward, is very helpful. Normally, and without you the boat we would be in, you get a communication blackout in these cases and have no clue if moving forward is even a possibility.
 
Still very hopeful, there are very positive people involved in moving forward, and many people and businesses, as well the AV industry in general, that want to see K back on it's feet. A lot of positive energy......



Jim
 
If it's just a matter of money then why not simply get financing? Should not be an issue for a company with little debt.

Seems to me that the owners threw in the towel and refuse to continue to pump personal funds into the business to keep it going. If they can project future profits, then why shut the doors? And the next question is if the owners don't see a potential for profit then why would anyone else?
 
I think I have an idea what may be going on but based on my conversation with Cheena and a promise that it was not to go beyond that discussion, I cannot really talk about it. I do believe this is going to be just one of the pains of converting from one form of business (physical media centric) to another form (online content delivery centric).
 
One thing is certain , I will remain Kaleidescape customer & owner until the end

And i have only been a customer for 2 months.!! The strato is my first kaleidescape product.
 
I'm like you. Only been a customer for a few months (have 2 Stratos and a Disk Server). Never had an interest in K prior, but I can tell you it has completely refreshed my movie watching experience. I think there is a solid market for their new systems and delivery model which will bring in a whole new group of customers. SJ
 
cinelife said:
It's just money. It is not about debt, there is very little.
Click to expand...

It's always just money. You don't go bankrupt when you have more liabilities than assets, you go bankrupt when you run out of cash to pay the bills that are due this week.

I don't have any inside information, but I imagine K doesn't have a lot in terms of hard assets, so it's all IP and goodwill. That makes it easy to run out of cash (and in the interview, I read Cheena as saying that they were undercapitalized--I'm not sure many entrepreneurs recognize when that's the case, but I'd guess it was likely they were already on this trajectory when he took the helm).

Hoping for the best for K and all of its employees and customers...
 
My concern is that the owners have loads of personal cash and assets but are not investing in their own business. WHY??

I know for sure when my business was not doing well in 2007, I put lots of personal cash into it to keep it going.
 
carajo said:
My concern is that the owners have loads of personal cash and assets but are not investing in their own business. WHY??

I know for sure when my business was not doing well in 2007, I put lots of personal cash into it to keep it going.
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Without knowing for sure . I do not think they have the amount of money that you might assume they have.
or to put it another way . I do not think they have enough money together to get them out of this situation.
 
André S said:
Without knowing for sure . I do not think they have the amount of money that you might assume they have.
or to put it another way . I do not think they have enough money together to get them out of this situation.
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Yea, it was mentioned that there were 70 employees and that a lot of them were high paid programmers. So, let's just do this. Let's say across the board the average salary across all 70 was 50k. Ok, then you are going to look at probably a minimum multiple of 1.25 to cover employment taxes, benefits, etc. (and could be quite a bit more), so that is basically $170,000 every two weeks to cover payroll (depending on actual taxes, benefits, average salary, that could easily be 200k, 250k or more every two weeks.

Then, on top of that you have all of the other expenses, vendor payments, building payments (rents/mortgages), etc.

Now, offsetting that you have revenue coming in, but we don't know what that is. Point is that they could easily be looking at $50-100k+ every two weeks short fall that would have to be made up. It could also be many times more than that if for instance they have to make monthly/quarterly licensing payments to studios, etc.

I know absolutely nothing about the owners, and therefore know nothing about their wealth, but the point is that it could take some pretty extreme wealth to be able to subsidize a company by $25, $50 or $100k per month.
 
I just wish I pulled enough out of my business to buy a $22,000,000 house with no mortgage.
 
I am just curious what the revenue is per HD, or UHD movie purchase for Kscape if this can be disclosed?

Also if it can be disclosed what is involved on Kscape's end to get the HD/UHD movie into the store? Do the studios send them a file with the movie that is then uploaded to the store?
 
carajo said:
I just wish I pulled enough out of my business to buy a $22,000,000 house with no mortgage.
Click to expand...



Don't know if you are implying someone took that money out of K and bought a house, but if you are, then you don't know what your talking about. No one, from day one, has taken any "millions" out of K. If you are implying Mike M. did that, then you do not know where his money comes from, and it isn't K.

I'm intentionally not commenting on any of these monetary discussions, but do feel I have to remind everyone that you have not seen the financials, you do not know under what circumstances K was operating the company, nor do you know the personal financial position of anyone associated with K. So if you want to speculate, fine, but lets not start making comments that appear to based in reality that are not even close to what is, or was, happening in the company.




Jim
 
Jim, if this was your business, would you as a start...layoff half the employees, cut out all benefits, cut salaries, renegotiate rents/costs, etc.. and try to keep things going? I just don't understand the sudden closing down and send all your dedicated people packing without at least a labor force cut?
 
carajo said:
Jim, if this was your business, would you as a start...layoff half the employees, cut out all benefits, cut salaries, renegotiate rents/costs, etc.. and try to keep things going? I just don't understand the sudden closing down and send all your dedicated people packing without at least a labor force cut?
Click to expand...


There are a lot more complexities to this situation than might be evident on the outside, as Jim has already mentioned. There are various obligations, legal and otherwise, that may need to be met.
Jim has already indicated that he can't, and won't, discuss financials, nor is a public forum a place for those discussions.

I, for one, have found Jim to be open, candid, and working hard with the owners among others to try and save not only the experience that Kaleidescape owners have enjoyed but also those dedicated employees. I trust him when he says that it's complex and that they are working round the clock to try and save the company in some meaningful way. It just takes time and careful planning.
 
carajo said:
Jim, if this was your business, would you as a start...layoff half the employees, cut out all benefits, cut salaries, renegotiate rents/costs, etc.. and try to keep things going? I just don't understand the sudden closing down and send all your dedicated people packing without at least a labor force cut?
Click to expand...

Again, no inside knowledge, but have seen the other side of this. I suspect that management knew they were running out of cash and were scrambling like hell to secure adequate funding while maintaining an outward appearance of normal operations, thought something was going to come through, and either it fell apart or time just ran out before they could close.
 
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