Crossroads Systems Inc. (NASDAQ: CRDS) recently announced that it would release its F2Q2016 earnings after the close of business on June 2. The announcement comes on the heels of executive outflows from the software company amid efforts to monetize assets to strengthen the balance sheet and unlock funds to keep the operations running.
As Crossroads Systems Inc. (NASDAQ: CRDS) prepares to report another quarter, it is important to recall that in the last quarter report (F1Q2016), the company disappointed. Revenue fell to $2 million from $2.2 million in the corresponding quarter a year earlier and operating expenses surged to $4.3 million against $3.6 million in the prior year quarter. The company also burnt more cash in F1Q2016 as cash and equivalents dropped to $7.7 million from $11.8 million in the previous quarter.
Asset sale for Crossroads Systems Inc. (NASDAQ: CRDS)
Crossroads recently announced the monetization of certain of its software assets and hinted at plans to do more asset sales in the future as it looks for money to keep it going. The company sold its SPHiNX and StrongBox storage software to a Canadian company called StrongBox Data Systems Inc.
The sale generated $1.8 million for the company. Crossroads Systems Inc. (NASDAQ: CRDS) is also ready to monetize some of its patents amid shrinking revenues and mounting losses. In F2015, the company’s revenue shrank to $7.8 million from $11.1 million in F2014.
The deal with StrongBox Data Systems also involved transfer of staff. At least 27 employees of Crossroads crossed over to StrongBox Data Systems.
Crossroads has also repeatedly faced risks of delisting from NASDAQ after falling short of listing requirements for the stock exchange market.
Executive outflow and board shakeup
StrongBox Data Solutions, the Canadian company that bought Crossroads’ two storage software, also hired away certain executives from the company in addition to the 27 employees. Crossroads’ EVP David Cerf and COO, Brian Bianchi, left the company to work for StrongBox Data Solutions. But Crossroads didn’t elaborate whether the exit of the executives that was part of the sales agreement or not.
In addition to executive outflow to StrongBox Data Solutions, Crossroads Systems Inc (NASDAQ:CRDS) also recently announced a board reshuffle. The company said that the chairman of its board Jeffrey E. Eberwein was stepping down and his position would be taken by Hannah M. Bible.