LinuxDevices.com: Update on Lineo Recapitalization

“Lineo will complete its recapitalization this week. As a result
of the recapitalization, the company will be in a better position
than ever to succeed. The legal mechanism used by our venture
capitalists to accomplish the recapitalization is foreclosure on
certain secured demand notes held by the venture capitalists. The
result: the same people, doing the same work, using the same IP,
for the same customers, with a new injection of capital, a strong
balance sheet and the very real prospect of profitability by
mid-year and cash flow positive operations within the next six
months — and perhaps as soon as Q2.

“What does this mean for customers? A stronger Lineo, a better
financed Lineo, with a greater capacity to execute on contracted
work. We are tenacious at Lineo, we believe in the embedded Linux
market, we helped to create the market and now we plan to make sure
the market thrives. Our Embedix solutions are helping drive that
market and we will work day and night to make sure that
continues.

“What does this mean for former employees? Ordinarily, this sort
of legal proceeding will leave former employees in a difficult
position, but the new legal entity has put a plan in place to
ensure that former employees receive all of their paid vacation
accruals. Lineo’s CEO has made this a condition of his employment
with “Lineo v2,” and has set his salary at $1/year until all of
these obligations are satisfied…”

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