Storage vendor Tintri likely to go bust by end of June

Storage vendor Tintri painted a bleak picture of its position and future in its first financial quarter for 2019 and looks unlikely to continue doing business beyond the end of the month.

The vendor revealed it was 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 said it was considering a sale as a last-ditch strategy.

As of 31 May, the company held cash and cash equivalents of US$30.9 million and US$11.5 million, but said based on its current financial projections and irrespective of whether lenders repaid the company at a faster rate, it would not survive the end of the month.

The make matter worse, the company revealed: “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.”

Tintri said that it would be unable to pay its debts if a default from its creditors was to occur, either in the short term or potentially even in future.

“As of April 30, 2018, the company had US$15.4 million of principal indebtedness outstanding under its line of credit with Silicon Valley Bank, or SVB, and US$50 million under its credit facility with TriplePoint Capital, or TriplePoint,” the report read.

“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.”

Tintri reported that its first-quarter revenue was likely to be US$22 million and that GAAP net loss per share was expected to be about US$1.14.

The storage vendor has faced a rough road since listing on the NASDAQ market last year, announcing a wave of job cuts in September.

It's been a sharp fall from grace for the storage vendor startup, which was established in 2011 and led by co-founder and CEO Kieran Harty, who previously led all desktop and server research and product development at VMware from 1999 through 2006. Tintri launched in Australia in 2014.