Petaluma's Dilithium Networks undergoes 'deep restructuring'

<p>.</p><p>Marwan Jabri denied Web reports that Dilithium had gone out of business. </p><p>“The company has not ceased operations,” he said in an interview Wednesday. “It is undergoing a deep restructuring.”</p><p>The venture-backed startup is selling assets and closing global offices while it works on a new business model, he said.</p><p>Core management, research-and-development and marketing staff remain in Petaluma, Jabri said. The privately-held company laid off employees in recent weeks as it dealt with a cash crunch, but Jabri declined to disclose the numbers. Dilithium had 50 to 75 employees in Petaluma in the past year.</p><p>Jabri said he is serving as acting chief executive following the departure of CEO Paul Zuber.</p><p>The company's Petaluma headquarters was locked Wednesday and its Web site was shut down “for temporary maintenance.” </p><p>The Economic Times of India reported Wednesday that Dilithium had closed its R&D and sales center near New Delhi and laid off at least 75 workers there.</p><p>It had smaller offices in Singapore and the United Kingdom and sales offices in China, France, Italy, Portugal and Dubai.</p><p>The company ran into trouble when there were delays in deploying its video technology in wireless networks overseas, Jabri said. “The reality of the telecom market is that deployment can take a long time,” he said.</p><p>“You have unforeseen events and that can lead to payments being delayed. When significant payments get delayed you run into a situation of cash flow,” Jabri said.</p><p>Dilithium's board — which includes some of its venture fund investors — decided to shut down the global operations, he said. The company's secured creditors also took part in the move, Jabri said.</p><p>“The company had to make a decision to continue supporting the overseas operation or focus on a specialized market,” he said.</p><p>The company was founded in 2001 and had venture backing from CM Capital, Deutsche Bank, U.S. Venture Partners, Galleon Group, Motorola Ventures, Jafco Investments and other venture funds.</p><p>It has raised more than $12 million in venture capital since November, including $1.5 million just last June, according to filings with U.S. securities regulators.</p><p>Dilithium did most of its business outside the United States, where carriers have rolled out advanced wireless services.</p><p>Earlier this year, Dilithium said it had 120 customers in 60 countries serving more than 1.5 billion subscribers.</p><p>The company's software, hardware and services make it easier for wireless carriers and content providers to deliver video to mobile subscribers, it said.</p><p>Last December, Dilithium was named a global technology pioneer by the World Economic Forum, a Switzerland-based nonprofit that focuses on economic development and social progress.</p><p>In February, Dilithium launched Galaxy, a technology platform designed to make it faster and simpler for service providers to offer mobile video.</p>