Holographix Case Study

Holographix
Hudson, MA (1999 - 2004)
     Chief Financial Officer (2 days/month) - After October 1998, Holographix’ part-time Chief Financial Officer never returned; he made no preparations for his departure, gave no notice, and didn’t even return phone calls. By early the next year, Holographix had to act. They had limped by for several months paying the bills and generating basic financial statements, but now year-end reports had to be prepared, government reports waited to be filed, and income tax returns would be due shortly. Clearly something had to be done.
     Guided by his lead investor, Holographix’ President David Rowe selected Clint Marshall to get the Company’s finances back on track. Marshall’s first task was to regain control of the accounting systems after the abrupt departure of the prior CFO. This he did by recreating the general journal for the past several months and reconciling the general ledger. Next, state and federal tax and informational returns were filed, many in arrears, to bring the Company to a current status. Then, Marshall set out to make sure the recent problems would never recur by thoroughly documenting weekly, monthly, quarterly and annual financial procedures and training Holographix’ staff in how to keep the books current and how to file the proper reports and tax documents. The creation of a financial calendar was an invaluable step in this process.
     Once Holographix’ finances were again running smoothly, Marshall’s broad skill set came fully into play. Marshall then turned his attention to completing a long-delayed major financial restructuring of the Company. Several months of perseverance led to the completion of the restructuring, which dramatically improved the Company’s balance sheet by eliminating substantial debt and accrued interest and retiring a major portion of the Company’s preferred stock. Next, Marshall was called upon to develop a new stock option plan, consisting of both Incentive Stock Options (ISO’s) and Non-Qualified Stock Options (NSO’s). Drawing upon past experience, Marshall developed a new plan that addressed both the objectives of the current management and the standards established with the Company’s prior option plan. Following legal review, the plan was implemented to great acclaim. After this, Marshall moved to enhance the financial operations by designing new and more informative financial statements and reports to help President Rowe track the business.
     Soon, however, the developer and manufacturer of holographic mirrors and gratings became a strategic acquisition target for Avanex, a newly public creator of photonic processors. It turned out that Holographix’ technologies were directly transferable into Avanex’ world of fiber optics and were critical to developing the next generation of photonic processors. Following a several-month courtship, $1.5 million Holographix agreed to be purchased for $75 million in Avanex stock. After a deal was struck for the sale of the Company, Marshall coordinated the two-year independent audit required by the Securities and Exchange Commission and the filing of public notices related to the sale of the Company. Then, Marshall stepped in to work full time for a short while compiling several volumes of paperwork in response to the due diligence requests of purchaser Avanex. These volumes, reflecting virtually every financial and legal aspect of Holographix’ business, were then thoroughly examined by Avanex’ team of analysts and became the basic reference for Company history and other information throughout, and after, the transaction.
     In the year since Avanex acquired Holographix, Marshall has continued his work at Avanex’ new Hudson Division by converting financial systems and revising procedures to conform to those of the public parent. Continuing his twice-monthly visits, Marshall has also worked to close out the old Holographix shell, distributing stock and coordinating paperwork with lawyers and the government. “Clint really worked out well for us”, says Rowe. “He stepped in to clean things up and was there when crunch time came and we needed fast turnaround on the stock options and the sale. His involvement was a real win-win.”

return to Case Studies | Home