New FalconStor CEO Gary Quinn said the vendor has cut its ties with investment banker Wells Fargo, which the software vendor hired in December to pursue an acquisition of the company or other funding options.
Quinn, who replaced Jim McNiel as FalconStor CEO in June, said the company has found several ways to raise money outside of an acquisition. He also said the goal is to return to profitability by the end of the year.
FalconStor reached an agreement with Hale Capital Partners to make an investment between $7.5 million and $15 million, signed a joint development agreement with flash array vendor Violin Memory that can bring FalconStor $12 million over the next 18 months, and agreed to sell its stake in a joint venture to sell the Blue Whale file system for around $3 million.
FalconStor is no longer retaining Wells Fargo as its financial advisor. Quinn said FalconStor would continue to listen to acquisition offers “but at this time, we’d prefer to digest these alternatives and focus our company around moving ahead.”
It’s been a long time since FalconStor has moved ahead. It just completed its 14th straight money-losing quarter. Quinn became interim CEO when McNiel left suddenly in late June. FalconStor removed the interim tag from Quinn’s title in July. McNiel’s predecessor, ReiJane Huai resigned as CEO in 2010 after his role in a customer bribery scandal became known. Huai committed suicide in 2011.
According FalconStor’s earnings report released Thursday, the vendor’s revenue of $14 million last quarter dropped 15% from the previous year. It lost $4.6 million and finished the quarter with $21.9 million in cash and assets.
“We have some work to perform to get the company to a consistent, profitable, growing and financially healthy entity,” Quinn said.
He added that FalconStor set a goal of“returning the company to profitability and positive cash flow by the end of 2013 by reducing spending and increasing revenue.
Quinn did not talk much about FalconStor’s product and technology plans on the earnings call, and would not say if the company received any acquisition offers.