STREAMING GAMING SERVICE Onlive was sold for just $4.8m despite previously having been valued at $1.8bn
The deal was revealed by US newspaper the Mercury News, and there we learn that the company had not much under $19m in debts, as well as other obligations like rent.
A letter seen by the paper sheds some light on the financial predicament that Onlive was in and reveals that its creditors will get around 26 cents for every dollar owed.
The letter is signed by Joel Weinberg, the CEO of Insolvency Services Group, the firm that is handling the deal, and shows that the company looked around for a solution when it grew concerned about the direction its cash was flowing.
"Had the sale to the buyer not taken place, the assignee would have been left with inadequate capital to fund the significant costs to preserve and market Onlive's patents and other intellectual property, thus greatly reducing expected recoveries essentially to those of a forced piecemeal auction," writes Weinberg in the letter.
The authenticity of the letter has been confirmed, and the new Onlive dignified the report with a response. It told the Mercury News that it was low on options "when planned financing didn't work out", adding that it is in a much healthier position now.
One of the firm's creditors is a bakery in Palo Alto. Onlive reportedly owes the Prolific Oven Bakery $2,000 for a month's supply of baked goods. µ
Plus the cost of ambition as moonshots eat into the coffers
Spoiler alert: it's probably VeriSign
Did we say cuts off? We meant traps them inside their own home