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VM-aware storage pioneer Tintri on verge of bankruptcy

Recent first-quarter results by the VM-aware storage pioneer throw light on a fragile financial situation that needs new funds or a buyer to avoid bankruptcy by the end of June

Christophe Bardy
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Published: 25 Jun 2018 14:45

Virtualisation-focused storage array maker Tintri has published preliminary financial results for the first quarter of fiscal year 2018-2019 and has warned that without finding new funds the company faces bankruptcy or must look for to be acquired.

More precisely, the storage array maker said its first quarter turnover up to 30 April this year should be about $22m, which is a decline of 27% compared to the same period the previous year.

The firm is a victim of a loss of client confidence, with customer worries about the company’s financial situation translating into a strong contraction in sales.

Meanwhile, drastic efforts to reduce costs by the company have been thwarted by an even quicker decline in turnover.

A fragile financial situation

Tintri held $30.9m in cash and short-term investments on 30 April, but this figure has fallen to $11.5m by 31 May. At this rate of cash consumption the firm will not have the necessary funds to operate by 30 June.

Worse, Tintri has debts of $15.4m with Silicon Valley Bank and has a line of credit of $50m with TriplePoint Capital.

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Since 31 May, the company is no longer in conformity with obligations associated with these lines of credit. The two lenders could, therefore, demand immediate repayment of the loan sums. The lack of funds to honour payment of its debts would trigger immediate bankruptcy for Tintri.

To make matters worse, some of Tintri’s suppliers have made clear their worries about the company’s financial situation, which could impact on its capacity to obtain components necessary to make its storage arrays.

Falling foul of Nasdaq

We must also note Tintri has indicated the late publication of its quarterly results is due to the work of employees working to find a solution to its financial worries.

Ironically, several employees that played a key role in the preparation of the results have left the company. Tintri’s quarterly report was published this month, but was filed later than required by Nasdaq’s deadline.

Tintri’s share price fell below $1 on 22 May, which put the firm at risk of expulsion from Nasdaq if that situation remained unchanged for 30 days of consecutive listing at that level.

At the time of writing, Tintri’s share price has spent more than one month below $1, and was at $0.18 on 25 June.

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