Paste, the music magazine that nearly folded last year before launching a campaign to save itself [6], laid off most of its staff and has been forced to shutter its print edition.

The Decatur, Georgia-based title, which raised [7] more than $275,000 in 2009 to stay in business -- most of that via donations from readers -- told staffers on Thursday that it could not meet its payroll. Nine of 12 full-time Paste employees were let go.

“We ran out of cash,” vice president Tim Regan-Porter told TheWrap. “We’ve been struggling to sell ads, primarily, for awhile now.”

The three that remain -- Regan-Porter and co-founders editor-in-chief Josh Jackson and publisher Nick Purdy -- will try to keep the Paste website [8] afloat while they evaluate their options. (Paste's print shuttering [9] was first reported by Gawker.)

Paste was “in deep discussions” for a strategic investment that would have alleviated its debt and kept the magazine going, Regan-Porter said. But the deal fell apart on Monday, he said, refusing to go into further detail.

But according to a source close to the magazine, a current stakeholder in Paste “torpedoed” the offer and threatened a lawsuit. (However, the source wouldn’t say who that stakeholder was nor what was at issue; Regan-Porter declined to comment.)

With a circulation of 180,000, Paste magazine was one of the biggest music titles in the country, but financial struggles forced the monthly to combine four issues -- April and May, and June and July -- into two. The August issue was completed, Regan-Porter said, but they could not afford to publish it. The September issue was nearly complete, he said. (Jackson said those issues will likely not go online so the writers "have an opportunity to take their work elsewhere" and get paid for it.)

Regan-Porter said Paste had been approached by other suitors before Monday, and is hopeful an 11th hour investment will allow the company to revive the magazine, in some form, and hire back some of the staffers it laid off. “We’re just not sure how long it will be before that happens,” he said.

It’s very possible a buyer will want Paste’s digital assets. Pastemagazine.com [8] attracts 750,000 unique visitors a month and about 2.5 million pages views, according to the magazine. Its Twitter feed [10] has close to 70,000 followers.

In 2007, the magazine launched a pay-what-you-want subscription campaign modeled after Radiohead's "In Rainbows" album release. (Pasted generated more than $120,000 from that stunt -- and, more importantly, 30,000 new subscribers.)

When asked why they didn’t launch another “Save Paste” campaign, O’Regan-Porter said it would have “scared off advertisers and prolonged the inevitable.”

“We didn’t want to take their money if it wasn’t going to work,” he said.

UPDATE: Here's Paste's official statement [11] on the magazine's closing.