True, Morphos was in development way before Genesi. It started out alittle after AROS, about 10 years ago as an idea that grew. Genesi came along, promised money to the developers which would allow them more time to work on Morphos, not to mention new members to the dev team attracted by the money. With that money gone, the developers in it for the money are going to be pissed and rightly so. Development will probably continue, but at it's pre-Genesi pace as it returns to a pure volunteer venture. Oh, there will be some disruption in development til all of this settles out. Stuff pulled out of CVS by the disgruntled unpaid developers, parts will have to be rewritten, etc.
Continued development means no company support and marketing anymore, no dedicated hardware platform, and a few other benefits they had with Genesi. That is assuming that this all results in all present and future ties with Genesi being cut. Guess that depends on who controls Morphos development. I assume Ralph Schmitt. That would put the ball in his court. I can't see him giving up on his project, even though it's going to take a hell of a hit. I just wouldn't expect 1.5 anytime soon.
Those 4 developers, that we know of so far, are out collectively to the tune of about $100,000. That's not an OOPs. Guess that explains the face change on the Morphos.net website awhile back.