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15.12.2017 23:05:00
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Crossroads Systems Reports Fiscal Fourth Quarter and Full Year 2017 Financial Results
AUSTIN, Texas, Dec. 15, 2017 /PRNewswire/ -- Crossroads Systems, Inc. (OTC Pink: CRSS), an intellectual property licensing company, reported financial results for its fiscal fourth quarter and year ended October 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 fiscal year 2016.
Fiscal Q4 and Full Year 2017 Financial Results
Intellectual property ("IP") license revenue for the fiscal fourth quarter of 2017 was $17,000, compared to $197,000 in the same quarter a year ago. Gross profit was $12,000 or 72 percent of revenue, compared to $149,000, or 76 percent of revenue in the same quarter a year ago.
Revenue for the fiscal full year 2017 decreased to $71,000 from $674,000 in the prior year. The decrease was due to the sale of Crossroads Systems' product business in March 2016. Gross profit for fiscal year 2017 was $56,000 or 79% of revenue, compared to $504,000 or 75% of revenue in fiscal year 2016.
Fiscal fourth quarter 2017 operating expenses decreased by 37% to $655,000, compared to $1.0 million in the same period a year ago. Fiscal year 2017 operating expenses decreased by 53% to $2.8 million, compared to $5.9 million in the prior year. The decreases were primarily due to reduced employee related costs and reduced legal expenses.
Fiscal fourth quarter 2017 net loss available to common stockholders was $(707,000) or $(0.50) loss per share, compared to a net loss available to common stockholders of $(246,000) or $(0.20) loss per share in the same quarter a year ago. Net loss available to common stockholders for fiscal year 2017 was $(1.9 million) or $(1.51) loss per share, compared to a net loss of $(982,000) or $(0.80) loss per share in fiscal year 2016.
At October 31, 2017, cash and cash equivalents totaled $1.2 million compared to $1.3 million at July 31, 2017.
Management Commentary
Richard K. Coleman, Jr., Principal Executive Officer at Crossroads Systems, said, "The November 3, 2017 sale of our '972 and non-'972 patents eliminates the expenses and risks associated with monetization while preserving the potential for future licensing revenue. This paves the way for new opportunities and our immediate focus is on identifying and acquiring a profitable business that creates shareholder value."
About Crossroads Systems
Crossroads Systems, Inc. (OTC Pink: CRSS) 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 | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands, except share data) | ||||||
October 31, | October 31, | |||||
ASSETS | 2017 | 2016 | ||||
Current assets: | ||||||
Cash and cash equivalents | $ 1,240 | $ 2,634 | ||||
Restricted cash | - | 1,459 | ||||
Total cash, cash equivalents and restricted cash | 1,240 | 4,093 | ||||
Accounts receivable, net of allowance for doubtful accounts of $0 and $5, respectively | 1,200 | 1,212 | ||||
Prepaid expenses and other current assets | 425 | 179 | ||||
Total current assets | 2,865 | 5,484 | ||||
Other assets | 133 | 120 | ||||
Total assets | $ 2,998 | $ 5,604 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ 15 | $ 339 | ||||
Accrued expenses | 403 | 637 | ||||
Deferred revenue, current portion | 10 | 1,531 | ||||
Total liabilities | 428 | 2,507 | ||||
Stockholders' equity: | ||||||
Convertible preferred stock, $0.001 par value, 25,000,000 shares authorized, 0 and 2,791,257 shares issued and outstanding, respectively | - | 3 | ||||
Common stock, $0.001 par value, 75,000,000 shares authorized, 3,014,726 and 1,225,711 shares issued and outstanding, respectively | 3 | 1 | ||||
Additional paid-in capital | 241,224 | 239,835 | ||||
Accumulated deficit | (238,657) | (236,742) | ||||
Total stockholders' equity | 2,570 | 3,097 | ||||
Total liabilities and stockholders' equity | $ 2,998 | $ 5,604 | ||||
CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES | |||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(In Thousands, Except Share and Per Share Data) | |||||||||||
Three Months Ended | Years Ended | ||||||||||
October 31, | October 31, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Revenue: | |||||||||||
IP license, royalty and other revenue | $ 17 | $ 197 | $ 71 | $ 674 | |||||||
Cost of revenue: | |||||||||||
IP license, royalty and other cost of revenue | 5 | 48 | 15 | 170 | |||||||
Gross profit | 12 | 149 | 56 | 504 | |||||||
Operating expenses: | |||||||||||
General and administrative | 655 | 1,037 | 2,786 | 5,928 | |||||||
Total operating expenses | 655 | 1,037 | 2,786 | 5,928 | |||||||
Loss from operations | (643) | (888) | (2,730) | (5,424) | |||||||
Other income (expense): | |||||||||||
Other income | (6) | 737 | 1,055 | 4,749 | |||||||
Loss from continuing operations | (649) | (151) | (1,675) | (675) | |||||||
Discontinued operations: | |||||||||||
Loss on discontinued operations | - | - | - | (1,812) | |||||||
Gain on disposal of discontinued operations | - | - | - | 1,771 | |||||||
Gain (loss) from discontinued operations | - | - | - | (41) | |||||||
Net income (loss) | $ (649) | $ (151) | $ (1,675) | $ (716) | |||||||
Dividends attributable to preferred stock | $ (58) | $ (95) | $ (268) | $ (266) | |||||||
Net loss available to common stockholders, basic and diluted | $ (707) | $ (246) | $ (1,943) | $ (982) | |||||||
Earnings (loss) per share, basic and diluted: | |||||||||||
Discontinued operations | $ - | $ - | $ - | $ (0.03) | |||||||
Continuing operations | $ (0.50) | $ (0.20) | $ (1.51) | $ (0.77) | |||||||
Available to common stockholder | $ (0.50) | $ (0.20) | $ (1.51) | $ (0.80) | |||||||
Weighted average number of common shares outstanding, basic and diluted | 1,404,961 | 1,225,711 | 1,283,066 | 1,222,808 | |||||||
CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
Years Ended | ||||||||
October 31, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ (1,675) | $ (716) | ||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
Depreciation from discontinued operations | - | 69 | ||||||
Gain on sale of discontinued operations | - | (915) | ||||||
Stock-based compensation | (24) | 685 | ||||||
Provision for doubtful accounts receivable | - | (4) | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 12 | 478 | ||||||
Inventory | - | 54 | ||||||
Prepaid expenses and other assets | (258) | 118 | ||||||
Accounts payable | (325) | (1,379) | ||||||
Accrued expenses | (234) | (609) | ||||||
Deferred revenue | (1,521) | (6,049) | ||||||
Net cash used in operating activities | (4,025) | (8,268) | ||||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment from discontinued operations | - | (28) | ||||||
Proceeds from sale of discontinued operations | - | 853 | ||||||
Net cash provided by investing activities | - | 825 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock, net of expenses | 4,000 | - | ||||||
Preferred dividends | (135) | (133) | ||||||
Reorganization transaction | (2,694) | - | ||||||
Net cash provided by (used in) financing activities | 1,171 | (133) | ||||||
Effect of foreign exchange rate on cash and cash equivalents | - | (123) | ||||||
Change in cash and cash equivalents | (2,854) | (7,699) | ||||||
Cash, cash equivalents, and restricted cash beginning of period | 4,094 | 11,792 | ||||||
Cash, cash equivalents, and restricted cash end of period | $ 1,240 | $ 4,093 | ||||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for income taxes | $ - | $ 4 | ||||||
Supplemental disclosure of non cash financing activities: | ||||||||
Conversion of preferred stock to common stock | $ - | $ 302 | ||||||
Common stock dividends issued to preferred shareholders | $ - | $ 139 | ||||||
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SOURCE Crossroads Systems
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