Replies to post #35345 on Sphere 3D Corp (ANY)

[Fuddynut]

That's a very important correction!!
Just read it and am glad to hear they didn't do the decrease outright.

[Hugodrax]

Hah. These guys can't even seem to get a PR right and have to issue corrections.

Here is what it says now:

"In addition, the Company has agreed that, only if the Company chooses to draw down any portion of the U.S. $5 million credit facility in the future as described above, the conversion price of FBC's existing convertible debenture will be reduced to US $3.00 per share"

Read that over a few times. Basically Cyrus is saying (IMHO) that as SOON as ANY even TOUCHES that revolver, the whole $19.5M converts reset to $3 from $7.50.

So as soon as they draw a single dollar from that line of credit, they get to convert into 3.9 million EXTRA shares.

LOL.

So if they draw $1M, they get like an extra 10% of the total company.

IMHO this is Cyrus saying they don't want to fund any more cash as they are making it enormously punative on the company if they touch that line of credit.

So this is really just a $5M sweetheart equity injection on onerous terms, with the added feature of Cyrus adding a cocked shotgun pointed at ANY shareholders' heads, if that line of credit is touched.

Thow Silicon Valley Bank into the mix with their business plan hurdles based on EBITDA and. It matures in February and has $5.3M owed as of Sept.

IMHO these guys are clearly still in the soup. They could burn through this $5M by Feb March, have to tap the Cyrus line to pay back SVB (or get by another quarter) and still need cash to move forward.

IMHO.

It's better than the alternative (going under) but man.....

[donkschmonk]

Correct, only IF they choose to use it. So its available IF need be and only then would the conversion of the donvertible note be repriced, and come into effect IF and when converted, which would btw be good thing as then the convertible debt would disappear from the balance sheet.

FACTS not IMHO :-)