AUSTIN, Texas, March 10, 2017 /PRNewswire/ -- Crossroads
Systems, Inc. (NASDAQ: CRDS), an intellectual property licensing
company, reported financial results for its fiscal first quarter
ended January 31, 2017.
On March 22, 2016, Crossroads sold
its product business to Canadian-based StrongBox Data Solutions,
Inc. The presentation of the company's quarterly financial results
excludes product revenues and expenses, which are now reflected as
discontinued operations in the prior period.
Fiscal Q1 2017 Financial Results
Intellectual property
("IP") license revenue for the fiscal first quarter was
$19,000, compared to $210,000 in the same quarter a year ago. Gross
profit was $16,000 or 84 percent of
revenue, compared to $159,000, or 76
percent of revenue in the same quarter a year ago.
Fiscal Q1 2017 operating expenses decreased 63% to $863,000, compared to $2.3
million in the same period a year ago. The decreases were
primarily due to reduced litigation related expenses.
Fiscal Q1 2017 net loss available to common stockholders was
$(444,000) or $(0.36) loss per share, compared to a net loss
available to common stockholders of $(188,000) or $(0.15) loss per share in the same quarter a year
ago.
At January 31, 2017, cash, cash
equivalents and restricted cash totaled $3.1
million compared to $4.1
million at October 31,
2016.
Management Commentary
Richard
K. Coleman, Jr., President and CEO at Crossroads Systems,
said, "The hearing before the Federal Circuit on March 7, 2017 concludes the appeals phase of our
'972 litigation. We look forward to a timely and favorable decision
that permits us to continue our efforts to compel the defendants in
our cases to pay for the use of Crossroads' technology. The
non-'972 sales efforts are ongoing as the company seeks to maximize
shareholder value."
About Crossroads Systems
Crossroads Systems, Inc.
(NASDAQ: CRDS) is an intellectual property licensing company
headquartered in Austin, Texas.
Founded in 1996 as a product solutions company, Crossroads created
some of the storage industry's most fundamental patents and has
licensed patents to more than 50 companies since 2000. Visit
www.crossroads.com.
Important Cautions Regarding Forward-Looking
Statements
This press release includes forward-looking
statements that relate to the business and expected future events
or future performance of Crossroads Systems, Inc. and involve known
and unknown risks, uncertainties and other factors that may cause
its actual results, levels of activity, performance or achievements
to differ materially from any future results, levels of activity,
performance or achievements expressed or implied by these
forward-looking statements. Words such as, but not limited to,
"believe," "expect," "anticipate," "estimate," "intend," "plan,"
"targets," "likely," "will," "would," "could," and similar
expressions or phrases identify forward-looking statements.
Forward-looking statements include, but are not limited to,
statements about Crossroads Systems' ability to implement its
business strategy, changes in the fair value of its derivative
instruments and its ability to achieve or maintain profitability.
The future performance of Crossroads Systems may be adversely
affected by the following risks and uncertainties: variations in
quarterly results, the ability to obtain, maintain or protect
patent and other proprietary intellectual property rights,
developments in litigation to which we may be a party,
technological change in the industry, future capital
requirements, regulatory actions or delays and other factors
that may cause actual results to be materially different from those
described or anticipated by these forward-looking statements. For a
more detailed discussion of these factors and risks, investors
should review Crossroads Systems' reports on Form
10-K, Form 10-Q, Form 8-K and other reports filed with
the Securities and Exchange Commission, which can be accessed
through the SEC's website or by clicking "SEC Filings" on the
Company's Investor Relations website
at http://www.crossroads.com/investor-information.
Forward-looking statements in this press release are based on
management's beliefs and opinions at the time the statements are
made. All forward-looking statements are qualified in
their entirety by this cautionary statement, and Crossroads
Systems undertakes no duty to update this information to reflect
future events, information or circumstances.
©2017 Crossroads Systems, Inc., Crossroads and
Crossroads Systems are registered trademarks of Crossroads Systems,
Inc. All trademarks are the property of their respective owners.
All specifications are subject to change without notice.
Investor Contact:
Mark
Hood
Crossroads Systems
ir@crossroads.com
Press Contact:
Matthew
Zintel
Zintel Public Relations
matthew.zintel@zintelpr.com
CROSSROADS SYSTEMS,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands, except
share data)
|
|
|
|
|
|
|
|
|
|
|
|
January
31,
|
|
October
31,
|
ASSETS
|
|
2017
|
|
2016
|
|
|
|
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,005
|
|
$
2,634
|
|
Restricted
cash
|
|
1,050
|
|
1,459
|
|
|
|
|
|
|
|
|
|
Total cash, cash
equivalents and restricted cash
|
|
3,055
|
|
4,093
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
1,212
|
|
1,212
|
|
Prepaid expenses and
other current assets
|
|
244
|
|
179
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
4,511
|
|
5,484
|
|
|
|
|
|
|
|
Other
assets
|
|
107
|
|
120
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
4,618
|
|
$
5,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
391
|
|
$
339
|
|
Accrued
expenses
|
|
501
|
|
637
|
|
Deferred
revenue
|
|
1,068
|
|
1,531
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
1,960
|
|
2,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
1,960
|
|
2,507
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Convertible preferred
stock, $0.001 par value, 25,000,000 shares authorized,
2,591,257 and 2,591,257 shares issued and
outstanding, respectively
|
|
|
|
|
|
|
3
|
|
3
|
|
Common stock, $0.001
par value, 75,000,000 shares authorized, 1,225,472 and 1,225,472 shares issued and
outstanding, respectively
|
|
|
|
|
|
|
1
|
|
1
|
|
Additional paid-in
capital
|
|
239,906
|
|
239,835
|
|
Accumulated
deficit
|
|
(237,252)
|
|
(236,742)
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
2,658
|
|
3,097
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
4,618
|
|
$
5,604
|
|
|
|
|
|
|
|
CROSSROADS SYSTEMS,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In Thousands, Except
Share and Per Share Data)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
January
31,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
IP license, royalty
and other revenue
|
|
$
19
|
|
$
210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
|
IP license, royalty
and other cost of revenue
|
|
3
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
16
|
|
159
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
General and
administrative
|
|
863
|
|
2,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
863
|
|
2,349
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(847)
|
|
(2,190)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense:
|
|
|
|
|
|
|
Other
income
|
|
471
|
|
2,671
|
Income (Loss) from
continuing operations
|
|
(376)
|
|
481
|
Loss from
discontinued operations
|
|
-
|
|
(618)
|
Net loss
|
|
$
(376)
|
|
$
(137)
|
|
|
|
|
|
|
|
|
Dividends
attributable to preferred stock
|
|
$
(68)
|
|
$
(51)
|
Net loss available to
common stockholders, basic and diluted
|
|
$
(444)
|
|
$
(188)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share, basic and diluted:
|
|
|
|
|
Discontinued
operations
|
|
$
-
|
|
$
(0.51)
|
Continuing
operations
|
|
$
(0.36)
|
|
$
0.40
|
Available to common
stockholder
|
|
$
(0.36)
|
|
$
(0.15)
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding, basic and diluted
|
|
|
|
|
|
1,225,472
|
|
1,214,634
|
|
|
|
|
|
|
|
|
CROSSROADS SYSTEMS,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
Unaudited
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
January
31,
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net loss
|
$
(376)
|
|
$
(137)
|
|
Adjustments to
reconcile net loss to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation from
discontinued operations
|
|
-
|
|
52
|
|
|
Stock-based
compensation
|
71
|
|
309
|
|
|
Provision for
doubtful accounts receivable
|
-
|
|
(1)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
-
|
|
(490)
|
|
|
Inventory
|
-
|
|
33
|
|
|
Prepaid expenses and
other assets
|
(51)
|
|
(135)
|
|
|
Accounts
payable
|
52
|
|
(558)
|
|
|
Accrued
expenses
|
(134)
|
|
(675)
|
|
|
Deferred
revenue
|
(464)
|
|
(2,518)
|
|
|
Net cash used in operating activities
|
(902)
|
|
(4,120)
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchase of property
and equipment from discontinued operations
|
-
|
|
(10)
|
|
|
Net cash used in investing
activities
|
-
|
|
(10)
|
Cash flows from
financing activities:
|
|
|
|
|
|
Preferred
dividends
|
|
(136)
|
|
-
|
|
|
Net cash used in financing
activities
|
(136)
|
|
-
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate on cash and cash equivalents
|
-
|
|
(4)
|
Change in cash and
cash equivalents
|
|
(1,038)
|
|
(4,134)
|
Cash, cash
equivalents, and restricted cash beginning of period
|
4,093
|
|
11,792
|
Cash, cash
equivalents, and restricted cash end of period
|
$
3,055
|
|
$
7,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
$
-
|
|
$
128
|
Cash paid for income
taxes
|
$
2
|
|
$
-
|
|
|
|
|
|
|
|
Supplemental
disclosure of non cash financing activities:
|
|
|
|
|
Conversion of
preferred stock to common stock
|
|
$
-
|
|
$
302
|
Common stock
dividends issued to preferred shareholders
|
$
-
|
|
$
139
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/crossroads-systems-reports-fiscal-first-quarter-2017-financial-results-300422095.html
SOURCE Crossroads Systems