Rumors have been flying lately about the demise of PubSub.com. While I've seen quite a bit of exaggeration in various forums, I can't deny that things are not going well for us. Our days are numbered. A recent attempt to execute a merger has been blocked and we've been blocked from raising equity financing that would allow us to continue to pay salaries and pay off our $3 million in debt. Thus, our "doors" will close soon if we can't find someone to pull us out of the current situation. Persons with fast access to cash and a desire for some of the industry's best technology are advised to contact us rapidly...
I believe firmly that the cause of our difficulties is not the team we have built nor is it the technology we've developed. Both are great. What has prevented us moving forward is a battle with a group of minority shareholders, some of whom claim to be lead by our ex-CEO Salim Ismail and are, in any case, primarily his "friends and family." This group is using very unusual clauses in our Shareholder's agreements to block mergers or financings. We've found it difficult to determine their motives, however, some have said that they believe that it is in their interest to drive the company into bankruptcy so that they can buy our software and start a new company. Of course, I believe that by the time we go through bankruptcy proceedings, we won't have any employees and frankly, a software company without the employees that developed its software is worthless. Our assets will have a much higher value if we have the employees available, thus, the best course at this time is to sell our assets, trademarks, etc. to cover the outstanding debt and make our employees available to the purchaser.
The clause that is being used to block us is a "one-man-one-vote" clause that requires that a majority of the shareholders approve any change to the shareholders' agreement. Mergers and financings require such changes. Asset sales do not. What that means is that one of our shareholders who has 75 shares has as much voting power as I do with my 540,000 shares (38.8% of the company). So, a tiny minority is able to block us moving forward on any of the normal paths for raising money. If no alternatives arise, we'll be in bankruptcy and we'll lose the employees within days.
I'm proud of what we've accomplished at PubSub.com and I'm very happy to have been able to work with a great team in an exciting industry. I'm terribly sorry that we've spent so much time on this internal political issues and haven't devoted more time to pursuing our product plans and building a better product for our users. Hopefully, in the next few hours and days, we'll find someone who is willing to help us out of this situation.
(bobwyman .at. pubsub .dot. com)