SANTA CRUZ — GraphOn, a small publicly traded software company that develops and licenses business connectivity software, reported Friday that sales had climbed slightly and losses decreased.
“We are aggressively looking at ways to improve our revenue stream, including through the development of new products and further acquisitions,” the company said in a report filed Friday with the Securities and Exchange Commission.
The company revenue is primarily from product licensing fees and service fees from maintenance contracts from “a limited number of significant” resellers. In the first quarter, the company sold about $897,000 in product licenses compared to about $763,000 a year ago. Revenues from service fees gained just about $6,200 year over year. Losses from this last quarter and a year ago included non cash items of depreciation and amortization of $140,600 and $141,600, respectively.
“We continue to review business combination opportunities as they present themselves to us and at such time as such a transaction might make financial sense and add value for our shareholders, we will pursue that merger opportunity,” the company said in the SEC filing.
Recent licensing efforts during the quarter have drawn the company into federal court in battles over patent infringement allegations. Both MySpace Inc. and craigslist Inc. are trying to get a court to invalidate GraphOn’s patents or find them unenforceable. In both cases, GraphOn responded by adding either an additional defendant to the case or initiating counterclaims and increased requests for financial relief.
The high cost of patent litigation, however, prevents GraphOn from initiating new infringement litigation or attempting to seek license revenue outside of ongoing litigation, the company said in its SEC filing. The plan is to cut costs this year to support operations throughout the next year.
The company reported having about $2.59 million in cash compared to about $2.85 million at the end of 2009, and about $3.6 million a year ago at the end of the first quarter.
WHAT: A publicly traded software company
HEADQUARTERS: 5400 Soquel Ave., Suite A2, Santa Cruz
EMPLOYEES: As of March 19, the company employed about 35 people
INFORMATION: 800-GRAPHON, www.graphon.com
STOCK: GraphOn shares trading on the Over-the-Counter Bulletin Board as GOJO.OB dropped slightly Friday to close at 6.5 cents. The 52-week range is 4-15 cents.
FINANCIALS: The company reported $1.88 million in revenues for the March quarter compared to $1.41 million a year ago in the same quarter. Net loss for the quarter was $439,600, or a loss of 1 cent per share, compared to a net loss of $768,600, or 2 cents per share.
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