You may have heard rumors by now that Faustine is experiencing serious difficulties. It's true.  Regretfully, I have had to close our doors and file for bankruptcy. It is the saddest thing I have ever done in my life. I am personally and professionally buried in debt; every financial asset and resource at my disposal, including my retirement fund, has been exhausted to keep my company afloat. I don't take this step lightly but it has become absolutely necessary. With no income for months I have started working a regular 8 to 5 job again so I can provide for my families' survival. I am writing this letter to give a candid account (to the best of my recall) of what lead to this decision. I initially wrote this letter about 6 weeks ago, but a few pending deals to acquire Faustine have prevented me from publishing it, until now.  During my silence, speculation regarding the status of Faustine has fueled a lot of discussions on the guitar forums... most of it quite negative. It's time to step in and present the facts.  
 

I have been delaying the inevitable for months while searching for investors or a buyer for my company. Since my partner left Faustine in February, I've been in talks with several amp companies, guitar pedal manufacturers, music equipment distributors, private investors, and a law firm that brokers intellectual property deals between music equipment manufacturers. I have done everything I can think of to save the company and finish Phantom orders, but none of these attempts has been successful. With such a narrow profit margin, and the current economic climate, prospective investors and buyers simply don't like the short-term risk. They don't wish to inherit my liabilities and would prefer to see what's left to salvage after my bankruptcy. Up until this week, I was still talking to potential buyers and was holding out hope that I might sell the company and meet commitments to my customers. That's always been my goal. But with the failure of this most recent opportunity, and the very serious personal financial crisis I find myself in, it's time to finally call it quits. Bankruptcy is my only option.  I will continue to honor warranties and repairs of your Phantoms until I can work out a service agreement with a music equipment dealer.
 

My last website update explained the parts delays and how they affected the production schedule. That's only part of the whole story. I did have a parts shortage months ago that delayed production, but once the parts were available again, my funds were so depleted that they had become insufficient to continue operating my business properly.  I continued taking new orders and attempted to maintain a tight control on my cash-flow so that production could continue while I searched for new funding to get Faustine back on track.  I was able to deliver the entire 3rd production run and most of the 4th run this year, but I operated at a significant loss to do it. On several occasions over the past few months, I felt that I was going to partner with a new investor. One deal would falter, and another would immediately present itself… and this has gone on now for months. I couldn't make a public announcement until there was an agreement and a plan to move forward with a buyer or investor. This process has really been accelerating in the last several weeks.  I was confident that a public announcement would come very soon, and it would be an introduction to Faustine's new partner or owner, with a new timeline for production. But, it hasn't worked out that way.  
 

There are already debates about how I should have run my business differently. In hindsight, I shouldn't have started Faustine without capital, a good business manager, and a solid business plan. But back in 2008, I was one guy, a guitarist / electronics geek caught up in the frenzy for my new attenuator design that everyone wanted, and I started building them on my own in my little garage workshop with no real plan to meet the overwhelming demand. In March 2009, I got laid-off from my NASA job of twenty years, and I honestly thought I could make a living doing this but I was inexperienced at running a business. It took a couple of years to figure that out, and by the time I did… I had far too many orders, commitments, and debts to regroup and properly start over. The only way to salvage Faustine was to find an investor who could put up the capital to finish the back-ordered Phantoms quickly so we could start fresh with proper management. That was the intent when I found a new business partner in November of 2010. We had a plan to finish the back-orders by the second quarter of 2011 and introduce new products later in the year. We raised the price on our Phantom Dx2, took a lot of new orders, found new manufacturing partners, set up accounts with suppliers, and geared up for what promised to be a very good year. When my partner left the company in February to deal with health problems, those plans came to a halt and I was back to operating Faustine alone with no capital. My business never recovered.
 

Where do we go now? I am unable to issue any more refunds for customer deposits. That is the most gut-wrenching consequence of my business failure and the thing that continues to weigh very heavily on my conscience and keep me up at night. I've made many friends and have enjoyed talking with so many of my customers who have placed their faith in me to deliver a product that will bring their amps back to life. I was happy to take on that responsibility, knowing how satisfied my previous customers were. There is no way I can apologize enough for my failure to deliver your Phantom or refund your deposit. I have worked diligently for months to find a new partner/ investor to properly fund and manage the business and catch up on back-orders. Recently, I have been more focused on finding a buyer so that I could refund customers and pay off debts with the proceeds. With such a popular attenuator, great reviews, endorsements by "big name" players, and more innovative products on the drawing board, I never imagined that I wouldn't be successful at finding someone to take over the company.
 

Over the last few years, while struggling to make Faustine a success, I've had to incur a lot of debts to continue supporting my family and my business on a limited income.  Now I am forced to file for personal bankruptcy to get relief from those debts and Faustine has to be included in my bankruptcy as it is a sole proprietorship and I am its sole employee. All of Faustine's creditors will be included in that bankruptcy, including those customers who I owe money to. I have no choice about that. There continues to be inquiries from people who would like to  license my intellectual property somehow for their own products but at this point, it's too late to continue entertaining potential offers. As much as I would like to, my financial difficulties and the discontent among my creditors and Faustine customers has reached a critical mass and I have had to go forward with the bankruptcy.  
 
However... after the dust settles, I am optimistic that there could still be opportunities to license my designs.  If there are opportunities, it is my intention to make amends with my customers in some way, if possible.  That will continue to be my highest priority.  I know that so many of you feel betrayed and that is a very heavy weight on my shoulders, but it has never been my intention to desert those fine people who have been loyal and patient for so long.  I will do all I can to make things right with you. Even if you've given up on me, I haven't given up on you just yet.  I don't have any details about how I'm going to move forward, but I am working on it.     
  

It's very depressing to be vilified on the internet guitar forums. I can understand the anger and resentment from an objective point of view... people lost money and I was responsible for that, but it was never my intention to defraud anyone. If that was my intent, I wouldn't have kept at it for 3 years trying so hard to make it work... never catching up on orders, constantly enduring angry e-mails and phone calls, putting in long hours 7 days a week, no vacations, little leisure time to speak of, making the kind of wage I was making in the 80's or even worse... digging myself into debt. In retrospect, I should have thrown in the towel long ago, but I had customers who encouraged me and a product I really believed in. I faced one roadblock after another and was determined to persevere. I desperately wanted to make this business a success... I still do... but without capital and a good business manager, the odds were against me from the start. I got in over my head, plain and simple.
 
Someone on a particular forum has alleged that me or my wife continued taking deposits up until a few weeks ago. That is a slanderous lie obviously meant to further incite feelings of outrage. We haven't collected any deposits for months, and that was only when we were feeling very confident that a particular partnership deal was going to keep us in business and get us back into production quickly. When that deal fell through and we were becoming doubtful about our future, we stopped selling Phantoms. I've read several lies about me and I have no intention of spending time on those forums defending myself. The trouble with open internet forums is that they provide a platform for antagonists to spread lies, rumors, and slander, and the lies are accepted, exaggerated, and propagated without the burden of checking facts. Online forums are a valuable source of information and fellowship, but they have the potential to easily turn toxic with just a few antagonists... and they often do.
 
Being despised by so many, even being proclaimed a criminal by some, is not a judgment I can get used to. I've been beating myself up over this more than you can imagine, and knowing that others want to perpetrate vengeance against me... it's not something I ever thought I would experience. I don't know how to deal with that.  Please don't vilify my wife, Laura. She began answering e-mails and phones, and handling some administrative duties to take that burden off of me… but she never really wanted to be involved in Faustine and doesn't deserve to be punished for it. Laura has been dealing with some very serious health problems these past two months, and she is no longer answering e-mails or dealing with any Faustine matters.  The stress is not good for her.  
 

I want to thank all of my customers, endorsers, and friends in this industry who have done so much to help me stay on my feet these past 3 years, believing in my ideas and my potential, heartily endorsing the Phantom attenuator, and encouraging me to persevere in the face of so many difficulties. I have valued your friendship and you've given me a lot of treasured memories. Thank you so much for your support.
 
My failure to make Faustine into the company I imagined it could be is not a sign that I'm finished.  My future in this industry may be very limited, but to those who have lost money or suffered as a result of my inability to deliver products that deposits were taken on, please know that I'm going to follow every opportunity and continue to do everything in my power to find a way to make it up to you once I get back on my feet.
 
Sincerely,

 

Addendum:
 
12 / 31 / 11  -  E-mail correspondence relating to Faustine's bankruptcy should be directed to the following e-mail address; faustine_bk@verizon.net.  These e-mails, if appropriate, will be forwarded to our attorney. If you are a creditor or a customer who is owed money by Faustine, you don't need to do anything.  You will be contacted by the law office or bankruptcy court in the coming weeks. 
 
Please keep in my mind that all e-mail correspondence is being archived.  I have recently received e-mails that contain overt or "veiled" threats of vengeance.  Although I completely understand people's desire to vent their anger and frustration regarding this matter, and I have been very tolerant of such correspondence, you may wish to refrain from threats to myself, my family, my property, and my associates (personal or professional) as these e-mails are being forwarded to a law office.