Sphere 3D Corp. (ANY)

[Hugodrax]

It’s pretty clear what happened. Cyrus had pumped many $10s of millions into Tandberg and then Overland by engineering that merger. They were looking at a total loss in all likelihood as OVRL (per the merger proxy docs) only had toxic alternatives that would have crushed Cyrus. Cyrus also owned it in various funds with differential priorities so had an internal problem (eg later Cyrus fund investors had higher priority in the convertible debt whereas older funds owned equity. Hard to zero out everyone and then try to convince your institutional investors that you weren’t using new investors to bail out old investors and/or throwing good money after bad.

ANY had a pumped up market cap up $200M but almost ZERO business outside of the VDI train wreck they bought . A total joke IMO. A complete and utter obvious joke IMHO.

But ANY was low on cash and nowhere on execution. They pizzed away the money the I-banking clown morons raised for them.

So Cyrus bails out ANY on the condition they merge with Overland. Same playbook as Overland and Tandberg. Solves a OVRL problem with a stupid market cap merger partner and a “story”, and solves the ANY problem of having to deliver with a silly “product” that doesn’t even really exist. They then get to lump in “Glassware” revenue of basically nil with “disk systems” so nobody can see the joke, and they at least have revenue, albeit low margin ancient technology.

Gave Cyrus time to find more chances for life in order to protect their debt (I suspect they realized the equity would be long gone in all probability). Found morons to keep buying stock but also did crushingly dilutive deals with buddies like McFarlane and Sheldon Iwentash who got to reload deeply discount Stock and get free warrants.

Silicon Valley Bank are super bright guys and sharp. They forced the company to keep raising equity and were getting ready to pull the plug on the company. Enter the clown car from Opus who takes out SVB entirely and ANY is almost instantly in special loans with the other garbage companies OPB loaned money too (some basket case microcap cash sinks and was in public filings).

So the last 3 years have been really about Cyrus deftly leveraging various morons to keep their convertible debt alive and have the highest chance of repayment.

Now OPB is on like its 8th extend and pretend waiver with the company and ranks above Cyrus.

So we are at endgame, with OPB on the verge of finally taking its lumps and foreclosing, which would zero out the equity and likely the converts as well.

The final Hail Mary for Cyrus is that EK finds someone dumb enough to buy this awful business for $40+ Million to pay off OPB and Cyrus. I’d be shocked such a dummy is out there but you never know.

More likely he fails at raising the money and it will be a tension between OPB finally pulling the plug and grabbing the accounts receivable, but taking a hit, and Cyrus finally ready to throw in the towel.

WhT you might see is OPB putting it into Chapter 11 or 7 and bidding with Cyrus with the debt - so OPB rolls its debt and Cyrus becomes 100% of the equity in a newco that walks away from all liabilities. Maybe they kick in the $5M they got paid back that the dummies at OPB allowed them to take out.

Now tell me, where am I wrong here?