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Cereva: Stalled, Not Stopped: Page 2 of 3

Could Cereva's problems obtaining further funding have led to some internal turmoil?

No, the company says. "We're not having problems getting funding, it's just taking longer," MacDonald says. "Tough economic conditions mean terms sheets are stricter, negotiations take longer, VCs want more leverage."

A lack of immediate cash, he admits, forced Cereva's management to layoff 65 people, roughly 25 percent of its staff, on May 24.

Cereva's also rumored to be late delivering product to its beta sites. Not so, says MacDonald. But he admits that the initial list of beta sites obtained by Light Reading earlier this year was inaccurate.

Indeed, when we phoned one of the sites previously mentioned by the company, GiantLoop Network Inc., for confirmation of a beta trial, we were told the provider had no plans for one.