Create a 2 page report . The report should outline ALL of the issues presented in the case, corporate, financial, and ethical. And then the student should come to a firm conclusion as to an action plan and in progressing with that action plan, the impact on all stakeholders should be discussed and defined.

The Case:

Two years ago, you met two engineering students who were focused on creating the Next Gen of flat panel display technology. Though their focus was in consumer electronics, primarily large flat panel displays, you had a sense that there was a strong military application for this technology as well. They were looking for a business partner who understood finance and accounting. Given your major at Rutgers Business School as well as two summers spent interning at Panasonic, you believed that you were the ideal candidate. And so did they.

You joined forces with them and began an entrepreneurial journey that has been both exciting and rewarding. The first twelve months saw great progress in securing funding, founding the company, creating a prototype, hiring four marketing/sales employees and, most importantly, securing a domestic manufacturing relationship so that orders could be filled once they were received and customers could be serviced if there were issues with the product. Everyone was in agreement that the company would not market directly to consumers but would market through various national retailers and brand name manufacturers.

The Product:

Quite simply, these two engineers figured out how to cram 9,000 pixels where the industry could only fit just under 8,000. The standard of around 8000 pixels is called 8K. This product is called 8K Plus. The important thing is that the projected cost of this technology embedded in a flat panel screen is cheaper and lighter than the current 4K technology. The company raised enough funding to create two prototypes in a 50 inch screen format as well as pay the entry fee for the 2017 Consumer Electronics Show (CES) in Las Vegas. The screen was a mega hit with two major retailers, including Walmart, asking for an exclusive if they issued a purchase order and prepaid for some of the order. Everyone who was at the 2017 show and saw the screen realized that delivery for the 2018 holiday season is dependent upon getting funding almost immediately.

Luckily for the company, a private equity fund was at the 2017 CES, searching out the next great thing. Within weeks, they invested $ 2,000,000 in the company at a $ 20,000,000 post money valuation. Their only condition was that some of the funds be used to file a patent. The rest of the funds would be used to hire additional employees and complete final engineering so that the screens can be manufactured against the promised orders.

As 2018 began, the company was in terrific shape with an order in-house from Walmart, some cash in the bank and the first production run being planned for May, 2018 in the sizes 50 inches, 55 inches and 65 inches. The two engineers are the CEO and the CTO (Chief Technology Officer). You are the CFO, but are functioning as the Chief Operating Officer (COO).

You have been informed that the first production run will be ready for inspection during the first week of April. You gather all the stakeholders in the company, including the private equity investor for a meet-and-greet on a late Friday afternoon. A cable feed is attached to the screens and they work flawlessly. You are no expert, but the screens appear to offer a clarity of color and image that you have never seen before. Everyone leaves really happy, feeling certain that the Walmart order can be filled which will propel the company to a new and much higher valuation.

The Saturday A.M. Phone Call.

Saturday morning, fairly early, you get a phone call from the CTO. He does all of the talking. And here is how it goes:

We have a major production issue with the screens. Though the prototypes seem pretty good, in production, we cannot achieve 9,000 pixels. It is more like 7000 pixels, which is, essentially the 8K standard. Walmart wants us to box up a screen and send it to their testing lab. So does the U.S. Government, as they are considering giving us a very big order for the screens. We can send them the prototypes, which will test well, but if they ask for a production model, we will fail the test. In addition, our investor is anxious to see these test results and was kidding me by saying, Anything less than 8500 pixels and I sue you guys. Our CEO is frantic and he asked me to not speak to anyone, but I felt I should warn you.

As the CFO, you are out raising another $ 5,000,000 in investor capital, which will be critical to market the finished product throughout the world, after the Walmart and US Government success. You are asking for the funds to be invested at a $ 50,000,000 post money valuation. You, the CEO and the CTO each own 20% of the company. Completion of this round and deployment of those funds to drive product revenue creates a great deal of personal wealth for the three of you.

The only question that you ask the CTO is, Can people tell that this screen does not measure up in the pixel count? His answer was quick and decisive.Only in a lab or with scientific measuring equipment.

What do you do ?