Santa Cruz’s GraphOn posts $300,000 loss for second quarter

SANTA CRUZ — Sales have dropped considerably in 2011, resulting in a second quarter loss of $300,000, GraphOn reported Wednesday.

“Our intellectual property license revenue decreased in both the three- and six-month periods due to the spotty’ and unpredictable nature of such revenue,” said Robert Dilworth, chairman and chief executive of the small technology company involved with remote online access to technology.

Software product license revenue dropped in the quarter, in part due to higher than usual sales in the first half of 2010, Dilworth said.

Although software service fees revenue was up about 7.7 percent from a year ago, the company was simply unable to meet 2010 sales levels.

The announcement echoed company concerns from last quarter, when the company said it had sufficient resources for the next year but would focus on lowering costs.

The small company, which saw shares drop to 4 cents at the beginning of the year, closed Wednesday at 16 cents per share.

GraphOn, which makes software for small- to medium-size businesses, helps customers access applications from anywhere via cross platform, remote access technology.

Products include hosting and cloud computing technology. In its last quarterly filing with the Securities and Exchange Commission, the company said it would focus this year on developing products for portable and mobile devices.

In a prepared statement to investors, Dilworth said Wednesday he was optimistic in new technology for mobile devices as there is early interest in the company’s products relating to cloud technology.

“We continue to invest research and development resources in new capabilities for our GO-Global products with the objective of providing increasingly attractive, easily used, and cost-effective solutions for our customers.”

In other company business, GraphOn announced the hiring of a new chief technology officer, Eldad Eilam, a Windows operating system engineer from Microsoft. He is the author of “Reversing: Secrets of Reverse Engineering.”

Two new company board members are John Cronin, founder, managing director and chairman of ipCapital Group, a leading intellectual property strategy firm and a new strategic partner of GraphOn, and Steve Ledger, founder and managing partner at Tamalpais Partners LLC, which invests in emerging growth companies. Cronin, who worked for IBM for 17 years, is credited for patenting 100 inventions, publishing more than 150 technical papers and receiving IBM’s Most Distinguished Inventor Award. Ledger has 27 years of experience in the investment industry.

Dilworth called the appointments “a major milestone” for the company.

“We feel it is critical to our success and stockholder value to establish a strong intellectual property foundation to leverage and support our ongoing technological advances,” Dilworth said.

GraphOn also announced earlier in the quarter that it received the MICO Award presented by MDB Capital Group at the second annual Bright Lights Conference in New York City. GraphOn was recognized for being a publicly traded company with one of the most potentially disruptive and market changing intellectual property.


GraphOn Corp.

WHAT: A publicly traded software company that sells technology to gain remote access to applications via the Internet.

HEADQUARTERS: 5400 Soquel Ave., Suite A2, Santa Cruz. 800-472-7466, The company also has an Israeli subsidiary, GraphOn Research Labs Limited.

HISTORY: Founded in May of 1996, the company became publicly owned in 1999. In 2004, the company moved from Morgan Hill to Santa Cruz.

EMPLOYEES: As of March 25, the company reported 33 full-time employees, about a third of whom work in Santa Cruz.


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