Replies to post #22727 on Sphere 3D Corp. (ANY)

[Boogins]

My personal take is that there will be no significant support from the stock until the situation is clearer.

We 'early adopters' are convinced that Glassware is an important new technology at an opportune time, but there have not been many tangible examples of large scale uptake. It appears that Microsoft has become an essential partner to Sphere, but the nature of the agreement is still unknown and the market doesn't like ambiguity. With the upcoming shows from MSFT hopefully Sphere's role will be clarified.

So for now we are at the mercy of shorts and margin calls and some panic sellers. The company will also need to raise money this year and there are those selling in advance of that. I would hope that Sphere has a big announcement to make before they go on their road show to refill the coffers.

But on the hopeful side earnings are coming up May 15th and I believe we'll see signs of increasing revenue and a steady march towards break even and profitability. Remember this is still a very young company, and no matter what the monkey business is with the price there are a lot more innings left in this game. As always, I am doing nothing but holding, and still am confident that this will be a very good investment.

[Hugodrax]

""Now we are at $100 million market cap or less than gross revenue"""

At $3.15 the market cap is around $109M. But don't forget there are about 5M shares and warrants outstanding.

On top of this the company has $25M in debt owed to Cyrus, most of it convertible at $7.50 to $8.50.

Plus another $4.9M on its credit facility (non-Cyrus).

Plus they said they drew down on another $5M during Q1 from Cyrus.

I'd also adjust for the negative working capital (-$5M as of Dec 31, likely much larger now).

I love how nobody gives a hoot about the balance sheet. Software companies can get by with minimal working capital if they are breakeven. Hardware companies cannot get by with negative working capital.

Homework assignment:

1) Think about whether or not ANY needs to raise capital near-term

2) Review page F-16 of the 40-F. I'll save you the trouble:

"""The Global Debenture contains customary covenants, including covenants that limit or restrict the Company's ability to incur liens, incur indebtedness, or make certain restricted payments."""

IMHO that effectively means that unless Cyrus puts in more cash, they won't allow additional debt.


The more interesting one is the credit facility which was $4.9M as at December:

"The credit facility requires the Company to comply with a liquidity coverage ratio and contains...."

I am doing some digging to see if I can learn more about the liquidity coverage ratio.

Fascinating that people are so sanguine about the company's financial position.

IMHO unless Cyrus puts in more debt, the most realistic capital raising option is straight equity, and I wouldn't be surprised if they needed t to sweeten it - e.g. max discount to trading price and perhaps warrant kickers.