Tech: Cirralto flags problems with Clark Rubber deal, shares dip
Link copied to
Cloud company Cirralto (ASX:CRO) had a less-than-optimistic trading update for the market this morning.
The tech minnow — which has a market capitalisation of around $6m — said its three-year licensing deal with Clark Rubber had run into trouble.
Under the terms of the deal, Clark Rubber agreed to install Cirralto’s Poolbox data management software in a two-stage process, with a head-office dashboard connected to software deployed on location at each retail store.
However, the company announced today that while it had delivered on some aspects of the project, that process had led to some variations in scope which in turn had given rise to some “differing views among the parties”.
“The future of this project at this time is uncertain and until the substance of these differing views are resolved this project is currently on hold,” Cirralto said.
Shares in Cirralto fell by around 12.5 per cent in morning trade to 0.7c.
At the time, Cirralto CEO Adrian Floate said the agreement marked a “major milestone” for the business.
Cirralto’s Poolbox product is one of three integration software products in the Cirralto suite, focused on pool businesses across large retail chains to one-man service providers.
Elsewhere in today’s trading update, the company provided further details around its December acquisition of Perth-based Appstablishment — the licensor of the Poolbox software — for a total consideration of 825,000 Cirralto shares.
Cirralto said that in the wake of the merger it would have a customer base of around 3,000 generating annual revenues in excess of $2m.
As a result, the company said it would no longer be announcing individual customer wins unless they’re “expected to have a material impact to ordinary operations”.
Data centre company DXN Limited (ASX:DXN) announced a new deal, agreeing to build a new server room fit-out for the Australian Gas Infrastructure Group (AGIG) in a $670,000 deal. The company said timelines for construction were “very tight”, but cited its strong relationships with both AGIG and vendor suppliers as evidence that it could meet the deadline on time. Shares in DXN fell 2 per cent to 4.6c in morning trade.