My update has taken a while, I know. I truly appreciate your patience and hope you understand that we had to delay this update for business reasons. With this update I want to walk through what’s been going on, then, I want to talk about what we are doing moving forward--which I am extremely excited about sharing with you. As most have read there are two events that we have publicly announced, the situation with FFD and closing our transaction with Prime Focus.
FFD
The Gener8 3D conversion studio is a fantastic group of talented artists, focused on converting movies into 3D. The ability for this group to aggressively compete in Hollywood and take more market share needed two things, labour and capital.
Labour partner: In order to grow, Gener8 needed a large and experienced backend partner to help with labour. Hollywood knew Gener8 had the best quality in the industry but weren’t confident we could take on larger volumes of work because of our size. 3D conversion is very labour intensive and doubling or tripling our number of artists would put our company at significant risk given the seasonal nature of the industry.
Capital: Because of the labour intensity and seasonality, Gener8 needed a strong working capital base to deal with the gaps between paying a large work force and receiving conversion revenue.
FFD was what we hoped for as a potential partner. However, as most of you are aware, there was one delay after another. Eventually everyone lost hope in their ability to close the transaction. When the deal became “non exclusive,” we realized the need to find a new partner.
Upon finding a new partner, FFD did not act or display a business philosophy of fair play. As you may have read, we took legal action to sue for damages for breach of the loan agreement, defamation, slander, etc. Now we believe that we have isolated that issue and are excited to move forward with the company’s plans. More importantly, now that this is out in the open we are able to keep you informed.
Prime Focus
We are excited to have built a relationship with Prime Focus. We have a common vision for the future of the entertainment business and this helped us quickly come together. This partnership is very different than what we had proposed with FFD.
The FFD relationship was about joint ownership in our 2D-3D conversion technology. This technology was just starting to realize its potential when we started down the path with FFD, but had yet to really prove itself out. Today our 3D conversion technology is something unique and exceptional in the industry. The best part about the Prime relationship is that Eight Solutions retains all ownership of this technology. This gives us the opportunity to not only work with Prime to drive a revolution into 2D-3D conversion, but also explore and expand where we can take 3D visualization outside of the entertainment business.
Many have asked about the changes we have made to Eight Solutions post the Prime announcement. The technology team that created the 2D-3D conversion software is now servicing both the Stereo Suite 3D conversion software as well as the Cumul8 asset system. Below I will bring out a starting roadmap of how these Cumul8 products fit together. The key win with our partnership with Prime is that we are a company that has created a technology solution to a problem and then monetized that solution. The Eight roadmap will drive this philosophy with the product lineup rolling out this year.
Moving forward the Gener8 studio (and name) will remain connected to the service side of conversion and continue to do the actual conversion work. This studio and its brand is known in Hollywood as the creators of the 3D. The Gener8 studio uses the technology (of Stereo Suite), written by the tech team in Eight, to continue to make great 3D movies. Eight is responsible for 3D technology and also expanding the Cumul8 asset system into 100’s (if not thousands) of more seats. Prime is responsible for running the service side of the business, and supporting the ever growing need for 3D conversion.
The next stage in our evolutions is a focus on Cumul8. We are tightening our focus on what I believe we do very well--we create technology solutions that we can monetize. We are creating revenue through 4 different products:
Stereo Suite is generating revenue through its five-year license and tech support deal with Prime of the 3D. The goal is to look for revenue opportunities in expanding 3D markets (outside of entertainment).
CUMUL8 stratus is the solution that drives an asset management system for anyone managing a business with digital assets. This product currently has been used on a few existing movies and today we are excited to expand that into India and work with Prime to bring it out as an even larger viable product, and a product with revenue.
CUMUL8 cirrus is an enterprise level product which already has an entertainment customer and a manufacturing customer. This high level Cumul8 product is a customized, live dashboard, that lets the user see their data narrative live. We will be expanding our sales of this product aggressively.
CUMUL8 sky is a global business intelligence (“BI”) live dashboard product that will tap into numerous data system for numerous industries. Similar products are Tableau, Splunk, etc. We are leveraging our experience and technology developed with the enterprise clients to bring this to market on a timely basis. I look forward to telling you much more about this exciting product under development. This is far from a concept, it is taking what we are learning in the other two products and making it so each person, in a company, has the ability to be a data scientist, to define their live data narrative using the existing ERP/Data System without having to hire technical help.
Our focus is on bringing out the Cumul8 product line, increasing revenue through technology, and ultimately build a world class BI product in the rapidly expanding world of visualizing big data.
Once again I thank you for your patience as we closed out these transactions and I look forward to keeping you informed on our future.
Sincerely
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