Sphere 3D Corp.

ANY Details

NASDAQ Sent A Letter of Reprimand to ANY: Sphere 3D Corp. (NASDAQ: ANY) is a provider of containerization, virtualization, and data management solutions. The company has a portfolio of brands, including HVE ConneXions, UCX ConneXions, and SnapServer®. In February 2021, the company received a letter of reprimand from NASDAQ, as ANY failed to comply with the Listing Rule 5620(c) (the “Quorum Rule"). As per the letter, during 2018, 2019, and 2020, the company was not a foreign private issuer and could not rely on home country practice in the alternative to the Quorum Rule. Moreover, it required a quorum of at least 25% instead of the 33 1/3% threshold required for a domestic issuer.

Termination of Acquisition Agreement with Rainmaker: On 16 February 2021, the company announced that the definitive Share Purchase Agreement for the acquisition of Rainmaker Holland BV, has been terminated as timelines to complete the transaction, including the necessary regulatory approvals, were considered prolonged and uncertain.

Q3FY20 Result Highlights: For Q3FY20, the company reported total revenue of $0.9 million, taking the total year to date (YTD) revenue for first nine months of 2020 to $2.8 million. Gross margin for Q3FY20 stood at 60.0%, up from 35.5% in the previous corresponding period (pcp). Net loss from operations stood at $1.2 million in Q3FY20. As at 30 September 2020, the company’s cash and cash equivalents stood at $2.89 million.

Q3FY20 Results (Source: Company Reports)

Outlook: As the agreement between ANY and Rainmaker Holland BV has been terminated, ANY will not be making any management changes or any Board changes that were previously announced at the time of signing the acquisition agreement. Looking ahead, the company intends to continue working with Rainmaker as a partner on several opportunities for water as a service offering.

Stock Recommendation: As at 19 March 2021, the company’s market capitalization stood at ~$23.2 million. The stock has provided a return of 87.89% in the last three months and has corrected by 17.59% in the last one month. The stock is currently trading at its 52-weeks average price level band of $5.55 and $0.35. On the technical analysis front, the stock has a support level of ~$1.76 and a resistance of ~$4.45. Considering the company’s low market capitalization, decline in bottom-line in Q3FY20, termination of the acquisition agreement with Rainmaker Holland BV, and associated key risks, we suggest investors to “Avoid” the stock at the closing price of $2.95, up by 2.79% as on 19 March 2021. 

ANY Daily Technical Chart (Refinitiv, Thomson Reuters)

Auddia Inc.

AUUD Details

Broadcast Radio Partnership with Lakes Media LLC: Auddia Inc. (NASDAQ: AUUD), formerly known as Clip Interactive, LLC, is mainly involved in the development of proprietary AI platform for audio and innovative technologies for podcasts. On 19 February 2021, the company completed its $16.5 million upsized Initial Public Offering (IPO).  The company recently announced that its founder and Executive Chairman, Jeff Thramann, will present at the Q1 Virtual Investor Summit, which will take place on March 23-25, 2021. On 18 March 2021, the company announced first broadcast radio partnership with Lakes Media LLC focused on gathering real-world data related to subscribers accessing local radio content in a premium environment. Under the partnership, the radio broadcaster will be marketing and promoting a subscription-based commercial-free premium listening experience to their listeners. The initial results of the launch are expected in the second half of 2021.

Financial Highlights: The company has a track record of incurring net losses since inception.  For the years ended December 31, 2019 and 2018, the company’s net losses stood at $5,230,245 and $3,510,011, respectively. In the first nine months of 2020, the company reported revenue of $110,919, down from $382,233 in pcp. Net loss for the first nine months of 2020 stood at $3,478,858.

Outlook: Looking ahead, the company intends to use its IPO proceeds and existing cash reserves to build out and complete the Auddia and Vodacast platforms, expand its sales and marketing efforts, and for general and administrative expenses. Currently, the company is developing AI technology platform and application which will give consumers an opportunity to subscribe to an application, the Auddia App, in order to listen to any streaming AM/FM radio station without commercials. 

Key Risks: Being an early-stage company, the company has a limited operating history. The company is also exposed to the risk associated with declining economic conditions, including rising unemployment rates, lower disposable income, credit conditions, and consumer confidence. The company is also exposed to the risks associated with the change in technology.

Stock Recommendation: As on 19 March 2021, the company’s market capitalization stood at ~$37.37 million. In the last one months, the stock has provided a return of 7.81%. The stock is currently trading slightly lower than the average 52-weeks’ price level band of $4.56-$2.50. On the technical analysis front, the stock has a support level of ~$2.76 and a resistance of ~$3.68. Considering the company’s recently completed IPO, limited trading history, track record of incurring losses, and associated key risks, we suggest investors to “Avoid” the stock at the closing price of $3.31, up by 3.44% as on 19 March 2021.

AUUD Daily Technical Chart (Refinitiv, Thomson Reuters)

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