Tintri: Fiscal 1Q19 Financial Results

Tintri, Inc. reported its preliminary results for its first quarter fiscal 2019 which ended on April 30, 2018, and provided a liquidity and business update.

Preliminary 1FQ19 Financial Results; Liquidity and Business Update
• The company is currently in breach of certain covenants under its credit facilities and likely does not have sufficient liquidity to continue its operations beyond June 30, 2018.
• The company continues to evaluate its strategic options, including a sale of the company.
• Q1 revenue is expected to be approximately $22 million and GAAP net loss per share is expected to be approximately ($1.14). These financial results are preliminary and the company’s independent registered public accounting firm has not completed its review of these preliminary financial results.

As of April 30, 2018, and May 31, 2018, Tintri held aggregate cash and cash equivalents of $30.9 million and $11.5 million, respectively. Based on the company’s current cash projections, and regardless of whether its lenders were to choose to accelerate the repayment of the company’s indebtedness under its credit facilities, the company likely does not have sufficient liquidity to continue its operations beyond June 30, 2018. The company continues to evaluate its strategic options, including a sale of the company. Even if the company is able to secure a strategic transaction, there is a significant possibility that the company may file for bankruptcy protection, which could result in a complete loss of shareholders’ investment.

As of April 30, 2018, the company had $15.4 million of principal indebtedness outstanding under its line of credit with Silicon Valley Bank, or SVB, and $50.0 million under its credit facility with TriplePoint Capital, or TriplePoint. The company does not currently have any borrowing capacity available under either credit facility.

Since May 31, 2018, the company has not been in compliance with certain financial and other covenants under these credit facilities, and SVB or TriplePoint may declare an event of default at any time. If either lender were to declare an event of default, the debt outstanding under the relevant facility would become immediately due and payable. The company does not at present, and may not in the future, have sufficient liquidity to repay amounts outstanding under its debt facilities should they become immediately due and payable. The company also has $25.0 million in principal amount of subordinated indebtedness outstanding in addition to other liabilities.

The company’s financial condition exposes its business to a number of risks. Existing and potential customers and suppliers have expressed concerns regarding the company’s financial condition, which may negatively impact the company’s ability to sell and ship products and services. In addition, the company’s financial condition may adversely affect its ability to continue to attract and retain key personnel and other employees. Tintri expects its bookings and revenues to be impacted in the second quarter by its liquidity constraints and overall financial condition.

The closing bid price of the company’s common stock on the Nasdaq Stock Market has been less than $1.00 per share since May 22, 2018. In accordance with Nasdaq rules, if the company’s closing bid price is less than $1.00 per share for 30 consecutive business days, then the company’s shares may eventually be delisted from and cease to trade on the Nasdaq Stock Market. Following such a delisting, Tintri’s common stock may trade only on the over-the-counter market, or not at all.

Quarterly Report on Form 10-Q for 1Q19
On June 15, 2018, Tintri filed a Notice of Late Filing with regards to its quarterly report on Form 10-Q for its 1FQ19 with the SEC. The company’s evaluation of its strategic options has required a considerable amount of time from the company’s management and other personnel that would otherwise be dedicated to the preparation of this quarterly report. The company has also experienced recent losses of employees whose job functions related to the preparation of the quarterly report. As a result of these and related factors, the company requires additional time to complete the preparation and review of the quarterly report and the financial statements contained therein. The company anticipates filing this quarterly report with the SEC in June 2018, although after the due date prescribed by SEC rules.

Tintri is not providing guidance for its 2FQ19.