Pink Sheets to Pink Slips

1:00 PM -- Last December we posted a story about iStorage Networks Inc., a Gilford, N.H.-based company that began trading as a public company through the Pink Sheets before it even raised funding or sold any products (see Suppliers Move From Pink to Public).

CEO Tom Makmann's strategy was to make some sales through OEM deals, grab funding, develop products, and eventually move iStorage from the over-the-counter Pink Sheets electronic stock quote service onto a major exchange.

Apparently, that quest is over -- unless Makmann comes up with money fast. An employee tells us the entire staff received pink slips Thursday except Makmann, COO Greg Pelletier, and marketing and sales VP Roger Kirkland. One of the 10 employees let go says iStorage never paid staff in June after making partial payment in May.

"In retrospect, the whole thing was a pipe dream," says the former iStorage employee. "I never even saw a technology roadmap."

When we called iStorage's offices today, COO Pelletier answered the phone. Asked if the staff was laid off, he said, "I have no comment on that." Asked if iStorage is still in business, he said, "I have no comment."A voice message left for Makmann was not returned.

We'd hate to see iStorage go -- only because its executive team is the motliest crew we've seen outside of this one.

Dave Raffo, Senior Editor, Byte and Switch