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Since they are holding their conference call during the day when the market is open it would appear that there must be some good news to relate.
That's usually why conference calls are held at that time and not after the bell. We'll see which way it goes, but I for one am glad I hung around to see if they got the loan or not(they did); whether the terms were good(they are); and what the pipeline and margins look like going forward.
But it's not like they have a great track record so far regarding setting expectations and I'm not blind to the hairy parts of this story. We've had several quarters of disappointments for one reason or another, (which is not unusual for a company at this stage) but what is unusual and unfortunate is getting everyone riled up with overly optimistic forecasts and then falling short.
Many thanks.
Well, with the ATM cancelled the picture is A LOT clearer and brighter.
Will be listening closely to the cc next Tuesday.
I still don't see where the ATM was cancelled. Can you point to where you got that information?
Maybe a cut and paste from the long SEC filing you linked to?
Because if the ATM is canceled and the line of credit is in place, the stock is an absolute screaming buy.
Can you please explain this to us? I don't have time to read the entire document and couldn't readily find that the ATM had been cancelled. Is the PNC line kaput as well, as mentioned in another post? Or is it just the former without the latter?
My hope is that if in fact the line of credit is not a dead issue then if / when it is awarded they shut down the ATM. That would send a huge message to the investment community that currently is reeling from being told 'no raise' to a 'four million raise'.
It would appear that the line of credit fell through and the company was forced to raise cash.
Too bad, at least in the short term, because the stock price has basically been cut in half as a result.
This may be a buying opportunity given all the negativity and probable panic selling, but we'll have to see what the conference call produces and what the next few quarters look like.
No rah rah here, just keeping a cool head and keeping an eye on the story. I'm staying tuned.
Is there a date set for the 4th quarter conference call?
I as well had a benign and positive post deleted. The moderators on this board have curious standards. All the negative stuff, no matter how ridiculous or obviously untruthful stays, while much of the positive commentary gets deleted. Hmmm.....
I had the same reaction as everyone else when I got this news. It seemed in direct contradiction to everything Brent had said in his presentations regarding shareholder dilution.
On closer reading however, and particularly after Brent's tweet, I see what the strategy is: the line of credit was created to give him a solid financial footing to operate his business and the issuance of stock is to be used opportunistically to buy other companies.
It's super important to understand that this offering DOES NOT OBLIGATE him to sell a single share of stock. He's NOT using this money in the way some other CEO's have to shore up a weak business. Rather it's for those situations where he runs across an opportunity to fold another brand into his growing portfolio, and gives him a quick way to raise cash to do so.
One thing you have to give Brent credit for is his ability to buy companies at the right price and to integrate them with his own. That's what has put NBEV on such a steep growth curve in the first place.
Take a deep breath and relax. This offering, which will only be used opportunistically when the right situation arises, is not anything remotely as bad as what has been posted here.
Agreed, it is a very low probability that after a small 2a study that Bryostatin would be green lighted, but the possibility is there because the situation is so unusual: AD has literally no effective therapy for it and there are millions with the disease. If there were ever a situation where a drug could be approved via a small study it is this.
The other reason the possibility is there is that the drug is well known and the toxic profile is benign. If the results of the 2a trial are strongly positive then the pressure on the FDA will be enormous to allow at least limited marketing to those most in need. You see this happen in cancers where a drug shows efficacy and nothing else is available.
But let's get real. Step 1 is to see how effective Bryostatin is what the SIB score differences are. Then big pharma will enter the picture very rapidly and most likely a bidding war will break out. All this I would expect to happen before the FDA has time to act.
Wolf I very much enjoy reading your musings, thank you.
I just wanted to add to your last post that in exceptional circumstances like these where there is a large unmet need--in the case of AD it could safely be called a crisis--the FDA can not only allow fast track status they can actually approve drugs on the basis of Phase II data. It's not done often but it does happen.
The main reason this does not occur more frequently is because safety issues appear in larger studies(Ph3) that do not emerge in smaller ones(Ph2). In Bryostatin's case since the drug has been around for 30 years and the safety issues--very minor--are already well characterized, that would not seem to be an impediment here.
So while it is pure speculation on my part to suggest the FDA might green light Bryostatin on the basis of a Phase 2 trial, it is not out of the question and nor would it be unprecedented.
In any event, the past couple of months doing my research and getting to know this company has been a real pleasure, with one positive upside surprise after another. Reading Alkon's papers is like following a scientific detective story, where the truth turned out to surprise everyone, the principal researcher included.
I think it's best to be realistic about what to expect from the 4th quarter. Please just forget about that $160M run rate. That hasn't been relevant for months as it took six months longer than expected for Glasware to appear on Azure.
The company is exiting some old legacy businesses that weren't very profitable in order to dedicate more resources to the cloud offerings and new storage technologies. Thus any uptick in revenue you see will be from new business in recent business lines, and the rate of growth will be offset by less revenue from legacy stuff.
So any number above the third quarter number is fine. I am personally hoping for $19M or better, and am waiting for the call to get a feel for business conditions. I am under the impression from posts here and on other boards that business has picked up, and with the recent plug by VMware I suspect will pick up further.
Bottom line: Modest uptick Q4 2015, a bigger uptick Q1 2016, and a significantly better quarter Q2 2016. These are my expectations.
To a large degree the fate of this company lies with the FDA. The big uptick in value lies in their ability to control the amount of nicotine in a cigarette without affecting the taste. No one else can do that.
So if / when XXII gets approval of their VLN tobacco product later this year, their entire technology platform becomes very valuable--and desirable to possible purchasers or licensers.
Earnings at this point are important, of course, but keep your eye on the FDA. If they get the nod, they will be alone in the modified risk space. That's a big market to have all to yourselves.
I'm sure there is only one product in front of the FDA, but let's not get distracted by this. The key is that XXII is ALONE in front of them, the FDA is clearly backing reducing nicotine as a central tenet in their public health policy. So the odds of getting the modified risk designation are very very good.
If you don't understand the significance of all this, it means that XXII will have a virtual monopoly in the 'modified risk' space. XXII's first product may well be followed by others, and they would have their own approval timeline, but having a 'reduced' label on a pack of cigarettes will be huge, as it will replace the old designations of 'light' or 'low _____' or whatever.
The 'light' market was a pretty robust market until it got quashed by the FDA. It could get rebuilt under XXII.
I agree. It appears for now we have a very significant lead on the competition because there's no other applications for VLN cigarettes into the FDA right now. We are it. And the government is paying for our studies to boot. To say that XXII has the wind at it's back for this market would be understating things. Nothing is ever 100% sure with the FDA, but I've never seen them be this responsive or the government this generous, which all dovetails nicely with their public health policy of reducing nicotine across the board. Won't happen overnight, but things sure seem to be headed that direction.
My personal take is that Step 1 is to get the first VLN cigarette approved and give it the modified risk label. This is underway with XXII's recent submission to the FDA. Step 2, later this year or next, is to require ALL cigarette manufacturers to offer a low nicotine product, ideally an alternative version of their biggest selling brands. Step 3 would be to regulate the amount of nicotine in all smoked tobacco, but that will be hugely controversial and take time. If / when that happens, XXII becomes a gold mine.
As far as marketing the VLN brand I don't think that's where XXII is headed. Once they get approval from the FDA(a pretty safe bet in my opinion) then I suspect they will license the technology out. They might keep co marketing rights, as the big boys won't be threatened by a tiny company's marketing arm, but the big $'s to XXII will come from big tobacco.
It will be interesting to see how this plays out.
What keeps us longs in the game is a sense of building momentum from unexpected sources, and the VMware announcement clearly caught pretty much everyone by surprise. The MSFT video was quirky but powerful as well.
Despite the usual short cabal's effort to puncture any positive development with doubt, the equal time given to Sphere alongside Dell in the recent video and press release sends a message. A very powerful message.
It feels like the start of something to me, and despite managements missteps in the past(none of us are in denial about that), companies can and do fix themselves all the time. This seems to be happening here.
What we need is more clarity and I'm hoping we get that soon. What is the exact nature of the relationship between VMware and Sphere. Neither the shorts or longs know, exactly, but given the recent uptick in the short vitriol, I suspect they are more nervous than they are letting on.
Well I keep coming back to why VMware issued a video featuring Eric Kelly next to an SVP from Dell.
It's pretty weird, if you ask me, and if I were Dell I'd be asking myself 'WTF?'. It's like putting the local high school drama star next to Tom Cruise, or whomever. So unless a psychotic made the video there is an important message being sent.
For myself I can't avoid thinking there might a significant change in strategy being signaled by VMware, a strategy that gives prominence to technology from Sphere. This is speculation, of course, but not unreasonable speculation.
So we wait for more details and listen to the shorts come up with every insult, old story, possible negative interpretation of every news item, etc etc until someone spells out exactly what is going on. Until then, it's anyone's guess, but I am in hopes we get clarification soon.
I hear these arguments back and forth, but to my way of thinking something important is being overlooked.
Why would VMware, a multi billion dollar behemoth, bother to include Sphere, a microcap, in both a press release and a video alongside SVP from Dell and EMC? There must be more to this than just having Sphere's products 'integrated' with Horizon so that Sphere can sell them on their own. I just don't believe they would bother including Sphere in a video where they get equal air time with Dell. That would make no sense at all, and if I were Dell or EMC I'd be pretty insulted to have such a small company look like they were on equal footing with me.
So let's just say that the situation isn't entirely clear yet, but downbeat interpretations should be looked at with the same cocked eyebrow as overly optimistic ones. Something larger is afoot, I believe, and in the coming weeks to months we will likely learn much more.
All we need is an upward trend. I'd shy away from any specific number. None of us has any idea what it will be and speculation is just a setup for disappointment.
Some sense of business conditions during the conference call would be nice, and I expect we will get some sense of what is happening from them.
In spite of the usual downside manipulation things are looking very much up. Earnings will drive the flies away, and we'll just have to wait and see when that is. No more than a few weeks in my opinion.
Well, you're right, we have been saying that.
But now it's MSFT and VMware saying it.
Different.
Well there has been and continues to be frank manipulation going on, but those days are numbered. The story is just too strong, and events this week portend future revenues that are very significantly higher. It's cash coming in that will drive the price upwards, and until then it's just a really great story and one that gets better each week. Day to day folks can do pretty much what they want, long term it's a different story.
Apparently you aren't the only one who is buying.
Take a look at the open interest on the August $2.5 options. It has skyrocketed over the past few days, up over 10X. I would say that is as good a confirmation as you can get that there is a sizable group out there who thinks the VMware announcement(and whatever is coming later, as I think this could be simply the first shot across the bow) was very significant.
So despite our chronic naysayers naysayings, in one week we've been publicly validated by an influential guy at MSFT, and mentioned as an important partner with VMware. Buyers are circling, and the ensuing weeks and months look to be the beginning of the ramp that we've all been expecting.
No, you just hit the link and wait for the screen to appear. You have to fast forward through the first twenty minutes or so because the moderator had other business to attend to at the start.
From the VMWare press release today regarding their app platform upgrade:
Along with an ecosystem of technology partners that includes Dell, EMC, Fujitsu, HPE, IGEL, NVIDIA and Sphere 3D, among others, VMware Horizon enables a first class digital workspace with the flexibility to choose any delivery model."
Here's the entire release:
http://finance.yahoo.com/news/vmware-enables-industrys-fastest-easiest-130000124.html
Love being mentioned in the same sentence as Dell, EMC, etc. I'm sure lots of folks will be reading the release today and thinking, 'Sphere who?'. Our company is finally getting known in the IT community, and with MSFT yesterday and VM Ware today we will become familiar to a much much wider audience.
Yes, probably the most reassuring aspect of the presentation today was how the Sphere story is living up to its 'hype'.
Today we saw a very public demonstration of how someone very knowledgeable about MSFT and the IT industry in general was blown away by what he saw. His enthusiasm was palpable, and he stated that he was going to introduce one of his MSFT clients to it later this week.
The host is a VERY gregarious character and I'm sure will also be telling his pals about it within and without the company. You really couldn't ask for much more from today than what we saw. If you didn't believe in Glassware and how truly differentiated it is before this broadcast, you certainly would after. It was also clear that MSFT cannot do this themselves, the program host said so during the broadcast.
Yes, if you aren't watching you can't get the feel of how genuinely blown away the guy at MSFT is. He's already said he will pitch Glassware to one of his customers this week. If we had any doubt about how good or revolutionary Glassware is, they should tune in now.
Did some reading over the weekend about this and it's clear that something is up. The volume of shares traded over the last few weeks has been very high yet there has been very little movement on the price front, indicating that someone or some institution is trying to keep the price down below the warrant exercise price(s).
I don't understand the arbitrage play here but perhaps some of you all do. Net net I think the stock has the potential to run and certainly having 10% less shares out there would normally lead to at least a 10% higher price to keep the valuation constant. We'll see, and I'd love someone more knowledgeable than I to opine on this, but in any event this will be an interesting week.
I want to chime in on some basic facts around this investment:
1. The US Government is paying for all the studies with XXII's very low nicotine(VLN) cigarettes. This is
extremely uncommon(unique in my experience) and hugely beneficial for the company.
2. The NEJM study with XXII's Spectrum cigarettes concluded that very low nicotine cigarettes cause
people to smoke 25% less and to attempt to quit cigarettes more often
3. A second, ongoing study with Spectrum cigarettes will clarify if abrupt decrease in nicotine or a
gradual reduction is the best approach. Either way XXII wins.
4. The FDA responded to the company's submission within DAYS. Again, this is a first for me and I've
been following the FDA for over twenty years. This virtually NEVER happens. It's a clear signal
that they are prioritizing nicotine reduction as a public health benefit and will almost assuredly
approve Brand A(Spectrum 0.4mg nicotine).
5. XXII is the only company in the world that I am aware of who can produce this sort of VLN tobacco,
and thus will be a licensing juggernaut for the entire tobacco industry. They have a monopoly
in this space as they control virtually the entire tobacco genome.
Summary: The US government is clearly focused on smoking reduction, and is paying for and will likely approve the VLN approach pioneered by XXII. With over 200 patents either issued or licensed XXII has
control over the amount of nicotine in tobacco, and any company who wants to use their technology will have to pay them at least a royalty on every cigarette sold.
Personal View: I've almost never come across a company with more upside potential. The approval of Brand A will give the company a potential billion dollar product, and licensing to others could produce revenues of the same scale.
JTFM, we get it. You've had a lousy 2015 along with the rest of us. It's time to move on and see what is in store for 2016.
Personally I expect that this year will be the turnaround year for Sphere. The shorts have left in droves which cannot be interpreted in any other way than a big positive. As well, the company has begun selling its technology on Azure, the fastest growing cloud platform, and I believe they have heard the grumblings of shareholders and will be more open and transparent with us. I have certainly not been shy about communicating my criticisms to them. I believe they have listened.
We'll see how it all plays out, but small companies often stumble, right themselves, and get back on track. I'm optimistic that will be the case here.
TTommy, let me share a bit of my experience with big companies, because like you I have had this same thought--'why the heck don't they just buy us'--about many small companies I have invested in previously. If it seems so obvious to me, why isn't it to them?
The fact is, big companies aren't stupid, they're cautious. They would rather spend $5B for a company they could buy now for $500M once the revenue stream has been validated. Many large purchases, most in fact, are made by calculating the ability of the revenue stream and revenue growth to pay off the purchase. The bean counters in big corps have a lot of influence in this regard.
It's a conservative approach, and it works. Now we can argue all day long about the merits of early vs late purchases but this is overwhelmingly my experience, and I've been investing in small companies for well over thirty years. So when you think about MSFT, think of a large rhino charging through the forest and we are a ti ti bird sitting on it's back. When we grow into the size of a jaguar, the rhino starts paying attention.
Well, considering the fact that the US Government is paying for the cigarette studies, they are using XXII's cigarettes(among others), and the NEJM(New England Journal of Medicine) article was robustly positive on the benefits of VLN(very low nicotine) cigarettes, there is reason for optimism.
The Spectrum Brand A cigarette, the lowest nicotine cigarette, was the clear winner in that study, and better yet there is a second study ongoing now. It's for a twenty week period instead of six weeks in the last study, and I think will add even more weight to the 'reducing nicotine reduces harm' thesis.
Nothing is guaranteed with the FDA, but this is about the best set up for an application to them I have personally seen. They have every reason to ask for expedited approval, because it's clear that a VLN product will reduce the number of cigarettes smoked and increase the attempts to quit totally.
I can't respond to private messages so to the person who wrote me here are my thoughts:
1) Remember that Glassware has been reviewed by Simon Bramfitt who was so impressed that he joined the company; remember that there was just a live, public demonstration of a Glassware installation and the customer was quite satisfied; and I know of a fund manager who installed it himself and virtualized apps and was favorably impressed. There are many many other public acknowledgements of Glassware(Novarad, Texas Schools, etc.) but these suffice for now. So while the technology may be evolving I doubt there are hiccups within it that have prevented the company from giving it to reviewers. I hope to see more reviews in the coming weeks as many of us have been urging the company to do so.
2) If you are wondering about MSFT and their commitment it's understandable, but big companies are huge beasts, and they move slowly and sometimes unpredictably. Why didn't they engage in a marketing blitz the day Glassware was formally available on Azure? The reality is MSFT will do that when it suits them, and not us. If Glassware is really important to their overall strategy in the cloud(and we have heard from several sources that it is) then we will see them stand behind it at some point. I can't predict when but I do think that it would be reasonable to check out how the first installations go and thus derisk their backing. It would be a silly risk for them to take unless all issues have been worked out.
I suspect he stopped doing so when he reread the terms of his employment...and discharge.
It's not unlikely that he's exposed himself to considerable liability by publicly dissing a former employer.
Not a good strategy in either the short or long term.
Well, thanks for 'just sayin'' that. Very nice to hear.
This bears watching again:
https://live.sphere3d.com/pastevents
Pay special attention to the UPS Store owners comments regarding all the different types of hardware and how Glassware makes them work together.
The good news on MSFT just continues to pile up:
http://www.businessinsider.com/aws-to-see-huge-competition-from-microsoft-next-year-2015-12
This is obviously good news for all MSFT Azure partners, and Sphere particularly so. Our technology ports MSFT applications to the cloud and does so simply and without the need to a complicated IT intervention. And once it's done, it's done, the application becomes eternal.
Next step will be to see Amazon wake up and smell the coffee. Glassware is not of course limited to MSFT applications, it can virtualize pretty much all comers. The cloud war between AMZ and MSFT is heating up, and Sphere stands to profit from both sides.