My guess is it was another case of wishful (or positive, depending on who you are) thinking.
My feeling from talking to Mark last Fall was that they were really grasping at straws to keep any forward momentum at all. As time goes on it gets harder and harder to keep any credible "face-front". I also felt like the straws they were grasping at were getting further and further afield, if you know what I'm trying to say - opportunities were getting further removed from their main focus, and more "hail mary".
I wish I had some specifics and facts, rather than this vague speculation, but I'm just going on my gut here, and have given him every opportunity to give me some facts.
I hate to say it, but my personal opinion is that the company is dead in the water. It's a shame, considering what they had, and when they had it. But as a (very much insider) friend points out, sometimes things don't go well when you kick your founder out the door.