Back from the dead? It's a little too soon to say, but Overland Storage - threatened with costly ejection by Nasdaq because its market capitalisation was under $15m - has got a $12m stock issue to put that threat into touch.
It's not a done Nasdaq deal yet, but the outcome seems pretty certain. CEO and president Eric Kelly said the investors bought convertible preferred stock with warrants. A current market capitalisation of $15.53m plus the extra $12m gives it a $25.5 marcap value. Kelly said: "If we're above the $15m limit for ten days, the deficiency goes away."
The new investors believe in what Kelly and his new team are doing with Overland, and this news will help turn sentiment about the company's future in a positive direction. It has recently announced much improved results with diminished losses, and added an iSCSI SAN product to its Snap Server filer line.
Both Dell and HP have recently said that their respective iSCSI SAN product lines are doing extremely well, and Overland aims to capitalise on the iSCSI storage boom.
Overland has escaped Nasdaq ejection before, with a reverse stock split increasing share trading values above a Nasdaq limit. The new funding gives Overland the ability to focus more on getting its business back into profit. It's aiming to recruit a new chief technology officer and VP of engineering, and further develop its disk-based product line.
This is Overland's second funding initiative in four months, with a total of $16m brought in - the firm now being more quick than dead. If and when it reports a quarterly profit, then Kelly's team will have accomplished a bit of a miracle. ®