Cloud game company OnLive has lifted the lid on the circumstances which led to it laying off its entire workforce and selling all of its assets to a new company.
Reports indicated last week
that OnLive had sold all of its assets to an unnamed company, and had let go of all of its staff, although it said that it planned to re-hire a large percentage of these back to the new start-up.
In a new statement, OnLive revealed that all of its assets have been sold to "a newly formed company" that will operate under the OnLive name, with investment from firm Lauder Partners.
This move has been made through an "Assignment for the Benefit of Creditors", which is essentially an alternative to bankruptcy, and allows OnLive to transfer its property to a third-party company in a timely manner.
The company said that it was "faced with difficult financial decisions" and was forced to lose its shares and staff as these could not be transferred under the ABC deal. However, almost half of the laid off staff have been offered employment at the new company, while the rest of the ex-staff will be offered consulting work for the company, said the statement.
OnLive also plans to hire back more of its former staff once it has closed additional funding, it said.
"The asset acquisition, although a heartbreaking transition for everyone involved with OnLive, allows the company's core innovation and ongoing offerings to survive and continue to evolve," the statement added.
OnLive also attempted to quell speculation about the move via a formal FAQs statement, which explained that OnLive users should not notice any downtime to the service or changes to their purchases.
The questions also noted that Steve Perlman, founder of the company, did not receive any stock or compensation from the transaction, while reiterating that all of OnLive's assets were transferred to this one new company, with no other transfer taking place.
Elsewhere, smartphone maker HTC announced that as a result of OnLive's restructuring, the company will lose the $40 million investment
it made in OnLive last year.