Thanks for the compliment. English is not my native language. I write the substance in German and use AI to translate and structure it.
The length comes from the number of factual points I am trying to address, not from AI inventing my position. I will keep this reply as compact as possible.
In the meantime, I paid for access to the actual court attachments: the declaration, the DIP agreement and the 12-week cash-flow budget. The figures below therefore come from Storj’s own filed court documents.
Thank you for confirming that SNO payouts are included in the operating budget and that a payout reduction is already factored in. That is an important clarification.
The filed budget covers only the period from August 4 to October 25. It projects:
- $930,634 in customer cash inflows;
- $1,309,759 in total cash outflows;
- a $379,125 funding shortfall;
- $388,000 in DIP financing;
- and only $8,875 remaining at the end of week 12.
This means that the DIP facility is not a long-term restructuring runway. It is a tightly balanced 12-week bridge that ends almost exactly at zero.
The budget contains $390,854 under “Cost of Goods Sold,” divided into a $191,000 payment on August 24–25 and a $199,854 payment during September 21–27.
The budget does not separately identify SNO payouts. Since you have confirmed that SNO payouts are included and that a reduction is already assumed, could you please confirm whether this Cost of Goods Sold line consists mainly or entirely of SNO payouts?
This raises four specific questions:
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What exact payout-rate reduction or expansion-factor reduction is assumed in the budget?
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Is the $191,000 payment scheduled for August 24–25 intended to be the complete July SNO payout?
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What periods and obligations are included in the separately filed $296,316.79 prepetition “SNO liability”?
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How many dollars does the assumed SNO reduction save during the 12-week budget period?
The timing is also important. The budget assumes DIP advances of $100,000 in week 1, $160,000 in week 3 and $128,000 in week 6. The proposed interim approval initially authorises only $100,000, while the remaining funding depends on final approval.
Without the additional $160,000 scheduled before the first $191,000 Cost of Goods Sold payment, the budget would fall into a cash deficit by August 24–25.
My argument is not that Storj should do nothing.
The question is how much survival runway the SNO reduction actually purchases after the resulting network risk is taken into account.
A reduction that provides six or twelve months of runway may be a rational restructuring measure. A reduction that merely helps balance a 12-week bridge, while potentially causing large operators to remove petabytes of used storage, may reduce rather than improve the probability of a successful restructuring.
The budget also shows that employee-, contractor- and payroll-related cash outflows total approximately $595,000 during the period, compared with $390,854 in total Cost of Goods Sold.
I accept your statement that the remaining team and internal expenses have already been reduced to the minimum required to operate the service. However, the budget demonstrates that reducing SNO payouts cannot resolve the structural funding gap by itself.
When you previously said that multi-million-dollar financing had already been completed and was still ongoing, were you referring to the historical Inveniam funding that now appears as a $4,037,963.40 prepetition unsecured claim, or is there additional committed post-petition financing beyond the current $388,000 DIP facility?
Finally, reducing the storage expansion factor is not economically different from a payout reduction for operators if it produces the same reduction in paid stored data.
If it also reduces redundancy or repair headroom, the proposed factor and the corresponding durability, repair-traffic and simultaneous-departure modelling should be published before that option is implemented.
The most important remaining question is therefore: what is the concrete financing or transaction plan after October 25, when this 12-week budget ends with only $8,875 remaining?