throwaway090909

It's almost certain the CEO is under major duress and has little cash. Most people are dishonest not because they like to be, but because they have their backs up against the wall.

1. Decide you are going to leave, be confident it's the right choice (it is)

2. Protect yourself, by understanding the legal implications with your own research or with a lawyer.

3. As the person in the position of power here (you are) have compassion.

4. Explain that you cannot stay, but you don't want to hurt them unnecessarily.

5.Make a plan for equity compensation, full rights to all of your work (at least for your own and further commercial use), while allowing them to use it under a license that doesn't blow up their lives.

6. Write your letter of recommendation for moving on to the next thing, and have it be clear that you finding job security is a necessary condition for things to proceed.

...Or, blow it all up, while trying to minimize the negative consequences for yourself. Which could be fair enough.