Is Foldera Unfolding?

Some of you might remember Foldera (FDRA).  The company enjoyed a brief moment of prominence and seemed poised to be a Web 2.0 darling that was breaking the rules and suceeding brilliantly.  So charmed was the company that at one point they could even boast that the “Don of Web 2.0” Michael Arrington was on their board of directors. (Disclosure: I was the SVP of Business Development and Chief Mobility Officer for Foldera from Jan 2006 to July 2007)

Alas, twas not to be.  The combination of an audacious goal, a talented but immature senior engineer who had never shipped a product, overblown promises and slipping deadline after deadline turned the company from darling to deadpool candidate in less than a year.

Over the past 12 months the company has been languishing with a $0.02 to $0.03 stock price, no sales, no product to sell, no real deals in the pipeline and what seemed to be little in the way of any prospects.  All this has apparently changed with a completely surprising letter to the shareholders that the company released yesterday.

It looks as if the company is mainly just providing a shell for an entirely new organization.  CEO Hugh Dunkerely – now being referred to as Interim CEO, although when they announced his promotion to CEO a few months ago the word “Interim” was conspicuously absent from the press releases – has stepped down and slid back into his prior  role  as SVP of Investor Relations.

It appears that Reid Dabney, Foldera’s CFO will retain his position in the new entity leading me to believe that he had some significant role in this new deal.

Aside from those two familiar faces – everything else about the reconstituted organization looks piosed to change.  No longer about collaboration and organization software, the company will now be the developer of software and hardware for the carrier class 10 Gigabit switch market.

Along with the new management team and new direction the company is adopting a new name; CeCors, an acronym for Carrier Ethernet Core Switch and pronounced ‘SeaCores.’ This will become effective in the coming weeks as the Company’s legal name, registrations, trading symbol and marketing materials are changed.

Another change looks to be the capitalization structure of the company.  According to the letter they say they sent, the company intends to do a 10 for 1 reverse split of the stock which could have very significant repercussions for those people that purchased stock when the share price was several dollars as well as for those employees now sitting on fully vested options that have been left un-exercised because they have been worth less than the strike price established to exercise them.

At present I’m not sure what to make of this information.  There are a lot of unanswered questions that I’m sure are shared by the hundreds – perhaps thousands of shareholders that were left holding the bag when the brokerage firm that underwrote this security, Brookstreet Securities abruptly folded do to unregulated trading of CMO’s in mid 2007.

There are certainly a lot of hard feelings among the investors that feel that they were screwed by  Brookstreet and in particular by Neal Dabney and Steve Kerr, two savvy Wall Street raiders that managed to bank tens of millions apiece while allowing the people that made that possible- both the early investors and the employees of the original Foldera to take it in the shorts while they sold the stock right out from under us.

It is my  understanding that there is already a class action lawsuit that has been filed against Brookstreet although I don’t know at this time if Dabney or Kerr (Not sure of the spelling; please correct me if you know it) have been named in this suit or in which court it has been filed.

It is interesting as well that this leader was released via PR  Newswire before it had even reached the shareholders whose money has been paying the salaries of Reid and Hugh for more than two years now.  You’d think that such a major change in direction – particularly when accompanied by a complete management change and a ten for one reverse stock split is the sort of thing that the shareholders deserve to hear about directly rather than from a Google alert turning up the “Letter to the Shareholders” on Yahoo Finance.  Classy guys.  Off to a great start.  Are you going to write to those of us holding worthless options to explain our rights given this turn of events or has that somehow slipped off the radar too?
What a costly and frustrating experience. One I am sure is shared by more of you than I even want to think about.  For what it’s worth, while I was AT Foldera I did my best to make something happen but it is awfully tough to generate deals that produce any revenue when you never have a product that is ready for sale.

And, as Forrest Gump says; “that’s all I have to say about that”.

About Oliver

Oliver Starr is a well known blogger, speaker and serial entrepreneur. His current blogging is focused on mobile technology and applications, green (eco-protective) technologies, and entrepreneurs and their companies. He is currently engaged as the Community Evangelist for, a new social curation tool. Oliver was also a professional cyclist and six time member of the US National Cycling Team.
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5 Responses to Is Foldera Unfolding?

  1. sborsch says:

    Just stunning. The promise of Foldera was considerable and needed in the marketplace, especially in a day of $4 gasoline, need for cost reductions, and more of us living a digital lifestyle.

    As I read that shareholder letter, it was as though they took an automotive parts supplier and decided to become a chain of weight loss centers. WTF? Why wouldn’t they just launch a telecom company without the excess baggage of an Expert Systems/public company?

    Like you, I was seduced by the opportunties with Foldera, and thank my lucky stars I followed my nose that was detecting a strong odor of rot.

  2. Dave says:

    Hey, Oliver! I’m glad you wrote about this. You and having both been seduced by the snakeoil salesman, Richard Lusk. As we both know there is much more that can be told about Foldera than you touch ok here. A testament to your integrity.

    So, lemme see if I understand this strategy. First, they get into the online collaboration space. A very crowded market already, with players like Microsoft and Google at the top of that food chain, easily able to crush them at their first misstep. So intimidated were they that they were afraid to release even v1 of the product unless it was perfect.

    So now, after living high off investor and funding money (I rather doubt Dabney nor Hugh took a pay cut while coming to the office everyday to play Sudoku) they have another brilliant idea of getting into another crowded
    market with established players like Cisco and Lucent. Both with plenty of money to hold their breath longer than CeCors. And a market, that unlike sofware, is a very conservative market
    with long sales cycles. Hell, even existing Cisco customers are reluctant to uprade to new Cisco systems.u So, I’d like to see how they get a customer to dump an estblished player for once failed web 2.0 startup solution to provide what is arguably the second most important piece of infrastructure for a business behind electricity. Good luck with that. If they fail there what’s next? Starting a cola company? A new over the air television network?

  3. Flamingo says:

    A possible reason why they are now in the 10gb switch software business is that Brookstreet Securities (Dabney’s former employer before Foldera) also was underwriting and promoting a 10gb switch company (I think the product was called Raptor) in addition to Foldera. The end game was to be aquired by a Cisco or someone else once they showed up on the radar.

  4. admin says:


    why would they need to use the shell of Foldera for another company that Dabney was underwriting? Convenience? I see that they managed to push through the stock reversal now which has hurt investors again. Do you know anything about the legalities of what has gone on?


  5. researcher says:

    See this bit of history (apparently, this isn’t the first Ethernet switch the new CEO Fiedler has been involved with):

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