Did you look at the financials for the Q1 and Q2? Sphere 3d is bleeding cash, and it looks exactly like renamed OVRL. Wall Street funds are not stupid.
G 2.0 is why everyone is here. Nobody gives a crap about tape products, OVRL acquisition was sold to us as a strategic step to acquire distribution channels, customers, and sales force! Not one person here invested in the dying tape business.
G 2.0 and virtualization revenue needs to be separate line item on the income statement, period. Not breaking it out is deceptive and it is being interpreted as pure BS to hide the lack of financial traction in virtualization arena. If G 2.0 business made $3MM in Q1 and made $5MM in Q2, investors would be happy and stock price would be rallying.
Instead you have more "stealth" and more BS promises. "Stealth" thesis is no longer valid because another year of this "stealth" and you will be looking at $1.xx stock price due to dilution and massive losses.
I e-mailed Scott about exactly this possibility in October of 2014.
Here is my e-mail from October 10th 2014 , so almost a year ago. Everything I predicted happened and we are in deep do-doo right now.
Hello Scott,
I wanted to get your opinion on the financial situation of OVRL. I took a second look at their financial data from September 23rd and every traditional indicator says that company is in deep trouble. I know that they are in the process of restructuring and optimizing after the merger earlier this year, but their numbers look awful.
Based on the balance sheet data, they have just $12.1 MM of liquid assets, and only $4.2MM of that is cash. Income statement shows that cash burn rate has accelerated from Q3 to Q4, with company losing $7.4MM in Q4. Gross margin also went down almost 10% to 26.9% from FY2013.
If current cash burn rate continues, OVRL will not be able to pay its bills come Q2 2015 without either borrowing money or issuing new stock- Sphere stock.
Sphere is not making money and has no cash reserves to support the overland's operations if overland continues losing money. I am getting concerned that cash burn at OVRL will severely affect the Sphere's ability to execute and grow its business. OVRL financial releases earlier this year painted a picture of the company in the middle of the successful turn around, latest quarterly numbers are not showing that. Revenue increases came as the result of the merger with Tandberg, and operating losses are enormous.
I understand and believe in Sphere's technology, but OVRL's financial situation seems very dire to me. OVRL's Q1 2015 is completed, so they are probably down another $6-7MM in cash/liquid assets. So if merger goes through, it is almost given that Sphere has to issue stock/borrower money to keep the combined entity afloat through the FY2015.
Please advise.
AI
