Crossroads Systems Reports Fiscal Fourth Quarter and Full Year 2017 Financial Results

News provided by

Crossroads Systems

Dec 15, 2017, 16:05 ET

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
[email protected]

Press Contact:
Matthew Zintel
Zintel Public Relations
[email protected]

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

SOURCE Crossroads Systems

Related Links

http://www.crossroads.com

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED