Entrada, now nearly broke, has announced a restructuring into three subsidiaries, each with its own management, sales force and financial statements. The company figures this might attract investors to its struggling storage area network transport division. (See Disaster for Entrada? ). The division, named Torrey Pine after an endangered California tree, has yet to see any revenues. Its key product, the Silverline 222 SAN-over-IP switch, which was supposed to have been shipped by now, has been delayed until at least December due to problems with its processing power.
The other subsidiaries are the adaptor card unit Rixon Networks and Sync Research, which sells and services frame relay products. The company plans to move Rixon from Maryland to Irvine, Calif., closer to company headquarters.
Ironically, Entrada stated in a press release that these two divisions are profitable, despite the shifting focus. Yet as the company pares down its staff to 70 or 80 people, only half of the employees will be in these divisions. The other half will be in the money-losing SAN transport business.
Throughout its last two quarters, Entrada has averaged $1 million per month cash burn rate. As of July 31, the end of its second quarter, Entrada had only $1.8 million in cash left on its balance sheet and was burdened by $1.7 million in debt. For the quarter, the company lost $2.8 million, or 26 cents a share, on $2.2 million in revenues. The company's history reflects a compiled $48 million deficit.