The iconic photography company Kodak, which has been in operation for 133 years, has warned investors that it may face closure within the next year due to “substantial doubt” about its future viability. In a recent regulatory filing, Kodak stated that it must either pay down its debts or renegotiate its financial terms to remain operational.
The filing highlighted that Kodak has “debt coming due within twelve months” and lacks committed financing or available liquidity to meet these obligations under current terms. These conditions raise significant concerns about Kodak’s ability to continue as a going concern.
Despite having introduced the world’s first digital camera in 1973, Kodak has struggled to adapt to modern technology, as most people now carry cameras in their pockets, diminishing the relevance of standalone cameras and film.
“In the second quarter, Kodak continued to make progress against our long-term plan despite the challenges of an uncertain business environment,” said CEO Jim Continenza during the company’s second quarterly earnings report.
Kodak reported a net loss of $26 million in its latest quarter, and since the end of last year, it has depleted $46 million in cash, leaving it with just $155 million. The company is also carrying roughly $500 million in debt.
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In response to inquiries, Kodak did not immediately comment but a spokesperson expressed confidence that it would be able to pay off a significant portion of its term loan before it becomes due and renegotiate its remaining debt obligations.
Last year, Kodak announced plans to terminate its pension scheme to alleviate debt, and CFO David Bullwinkle confirmed that the transition is proceeding as planned.
This isn’t Kodak’s first financial crisis; the company filed for bankruptcy in 2012. Since then, it has diversified into other sectors, including commercial printing and advanced chemical manufacturing.
In 2018, Kodak attempted to enter the blockchain and cryptocurrency space with plans for a digital token called KodakCoins, aimed at powering a blockchain-based rights management platform. However, this initiative never materialized.
Currently, Kodak is focusing on its latest venture into pharmaceuticals, opening a manufacturing facility in Rochester, NY, to produce essential starting ingredients for drugs.
SOURCE: GIZMODO
