It was a busy week for San Diego’s innovation economy, with reports on new products, new deals, and some insights into how startup companies can survive virtually. So read on!

—Zeebo, a new San Diego-based company, launched its game console, entering a multi-billion dollar industry dominated by the Wii, Xbox, and Playstation. Backed by Qualcomm, Zeebo uses a Qualcomm chipset that allows users to connect over a cellular network (instead of broadband or Wi-Fi) to purchase and download games—much like Amazon’s Kindle.

—The U.S. cleantech industry is said to be benefiting from an “Obama bounce,” based on the billions of dollars designated for renewable energy and cleantech spending in the federal economic stimulus package. So it seemed like a good time to put together a comprehensive list of San Diego cleantech companies.

—Pure Bioscience of El Cajon, CA, told Xconomy’s innovation journalism fellow, Juha-Pekka Tikka, the company expects hundreds of products based on Pure’s germ-killing agent, silver dihyrdogen citrate, to soon hit the market. Pure later announced it has found an Indian distributor to immediately begin marketing Enviroguard, a disinfectant cleaner, in India.

—A special committee of the board at San Diego’s Hollis-Eden Pharmaceuticals (NASDAQ: [[ticker: HEPH]]) fired founding CEO and namesake Richard Hollis for cause and named the company’s chief operating officer, James Frincke, as interim chief executive.

—During my recent stopover at San Diego’s DriveCam, CEO Brandon Nixon explained how the company, which began with a dashboard-mounted video recorder, has evolved into …Next Page »

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Following on a $9 million financing of its domestic receivables in late November, San Diego’s Overland Storage said today it had reached a similar two-year deal to finance up to $5 million of the data protection company’s foreign accounts receivables. In a statement, Overland’s new CEO, Eric Kelly, said, “We believe that together these two financing arrangements will allow us to continue our recovery and execute our strategy.”

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San Diego’s Overland Storage (NASDAQ: OVRL) reported some good news today, saying Nasdaq has withdrawn a delisting notice that was issued last year when the  company’s stock slipped below Nasdaq’s minimum share price requirement of $1 a share. According to Overland, Nasdaq now says Overland now meets “alternative” standards. Shares of Overland, which specializes in data archiving and related data storage technologies, were trading at about 26 cents earlier today.

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San Diego data storage company Overland Storage (NASDAQ: OVRL) has named board member and former Snap Appliance CEO Eric Kelly as CEO. Vern LoForti, who was Overland’s president and CEO, will continue to serve as president. Kelly, a longtime computer and data storage executive, has worked closely with Overland’s management team to formulate its restructuring plan.

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Before the economic downturn deepened last September, many venture capital firms maintained that their operations were unaffected by the overall economy. They’re not saying that anymore. VCs are reacting to hard times in different ways—and so are the startups and technology companies that make up the innovation economy. Some examples of how they are coping, along with other deals and drama, can be found in our roundup of last week’s biz-tech news.

—With negligible debt and about $11.3 billion in available cash at the end of September, Qualcomm (NASDAQ: QCOM) is in a position to shop for bargains. The wireless technology giant agreed to pay $65 million to acquire mobile-graphics and multimedia technology from chipmaker AMD. (Qualcomm also is scheduled to report its fiscal first-quarter financial results this Wednesday.)

—Biofuels may be one of the next big things in the cleantech sector, and a consortium of academic and company researchers have organized SD-CAB, the San Diego Center for Algae-based Biofuels, to help advance development of the nascent industry in the region.

—San Diego’s biotech VCs say they are still doing deals, despite the economic downturn. But the message that three prominent VCs delivered to a breakfast meeting of Biocom, the life sciences industry association, is that different firms are adopting different ways to maximize their returns and minimize their risks.

—Axikin Pharmaceuticals, a San Diego life sciences startup that was spun out from Actimis Pharmaceuticals last June, got $3 million in a first round of venture funding. The investors were Sanderling Ventures, which has offices in San Diego and San Mateo, CA, and Mitsui & Co. Venture Partners in New York.

After enacting substantial cutbacks in November and December, Metabasis …Next Page »

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After slashing 17 percent of its workforce and making other cutbacks, San Diego’s Overland Storage (NASDAQ: OVRL) announced today what CEO Vern LoForti describes as a significant initiative in the company’s turnaround effort.

The longtime maker of data storage equipment has been reeling since 2005, when Hewlett-Packard said it was phasing out purchases of tape-based storage equipment that Overland made under HP’s brand name. Overland makes a variety of tape and disk-based data storage equipment, but its business continued to erode.

Now LoForti, who has been trying to turn around Overland as CEO since 2007, is announcing the creation of “a solutions engineering group” that will work with partners to develop and integrate “end-to-end” data storage systems for its customers. The move follows a $9 million financing in December and a restructuring last week that reduced Overland’s workforce by 53 employees, or 17 percent, to a total staff of 275. (An update to the Xconomy San Diego layoff tracker is here.) The company also implemented a 10 percent pay cut for all salaried employees, including LoForti and other executives.

“This new strategy fits right in to this restructuring at Overland, where we’re leaner and meaner,” LoForti says. The company plans to use its partnerships with Mobotix Vision Systems, which makes video surveillance and Internet-based archiving systems, and with a software developer to provide “plug and play” data storage systems for its customers. Using partnerships to develop such systems “means we don’t have this huge R&D cost” LoForti says.

Overland intends to provide its systems to meet customers’ data archiving and business continuity needs, and for Internet-based “network video recorder” systems. Ravi Pendekanti, Overland’s vice president of worldwide sales and marketing, is particularly encouraged by the booming demand for video surveillance technology. “What most people want,” Pendekanti says, “is to store their surveillance data—but to be able to retrieve the video in the event something happens, whether it’s a slip and fall on company property or a terrorist act.”

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The rainy season is upon us here in San Diego, but the deal landscape remains a bit parched—especially when it comes to funding new companies. But a deal’s a deal, right? So here’s our rundown on deals and other news.

—San Diego’s Pure Bioscience (NASDAQ: PURE) struck a global marketing agreement with Ciba, the Swiss specialty chemicals giant, focused on the San Diego firm’s proprietary antimicrobial agent, silver dihydrogen citrate, or SDC. Pure says SDC is a less toxic and more environmentally friendly alternative to the commonly used additives such as triclosan (itself made by Ciba) that allow some dish soaps, cleaners, lotions, and even toothpastes to be labeled as antimicrobial.

—San Diego’s Overland Storage (NASDAQ: OVRL) got a little breathing room when it closed a two-year deal with Marquette Commercial Finance to finance as much as $9 million of its accounts receivable. Amid the nation’s worst-ever credit crisis, Overland CEO Vern LoForti told me his company is far from alone in seeking such unconventional financing.

—It’s a done deal. Atlanta’s Ebix (NASDAQ: EBIX) confirmed on Monday that it has closed its acquisition of San Diego-based insurance software firm ConfirmNet. Ebix estimated the deal was worth between $10 million and $11 million. ConfirmNet develops software used for issuing insurance certificates.

—San Diego’s Cadence Pharmaceuticals (NASDAQ: CADX) said Friday it had secured a long-term supply agreement for the active ingredient in its Omnigard gel for preventing catheter site infections, which is currently in Phase III clinical trials. The deal establishes an important relationship for Cadence with Belgium’s Solvay.

—At the end of Mutual of Omaha’s Wild Kingdom TV series of the 1960s, host Marlin Perkins would often end the show by saying something like, “…And so we bid a fond farewell to Zambia, land of a thousand sunsets.” Likewise, we bid farewell to Symwave, a fabless chip designer of mixed signal and analog semiconductors. Symwave has relocated its headquarters from San Diego to Orange County’s Laguna Niguel and reorganized its management team—just as it got $10 million in third-round venture funding from Kodiak Venture Partners and CMEA Ventures. The company, founded four years ago with operations in San Diego, Orange County, and Shenzhen, China, also has venture backing from Jafco Ventures, Revolution Ventures, and RPM Ventures.

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I thought it was unusual when San Diego’s Overland Storage said Friday it had closed on a $9 million receivable financing agreement. All it means is that a finance company has agreed to lend Overland immediate cash for its customers’ IOUs—like one of those “payday loan” outfits.

So I arranged to talk with Vern LoForti, who was named as Overland’s CEO in 2007 after a two-year turnaround effort derailed. Amid the broader economic downturn, there’s little doubt that Overland Storage could be a harbinger of the painful effects the credit crisis is having on IT technology companies.

“It’s been difficult,” LoForti told me. “We’ve restructured once. We brought our expenses way down. But then we got caught in the buzz saw of this downturn.”

Overland’s available cash was down to $5.4 million at the end of September, and the company said at that time it needed about $10 million to fund its operations at current levels through next September.

Trying to raise money in what may be the nation’s worst-ever credit crisis proved exceptionally difficult, which LoForti says is what led Overland to finance its domestic accounts receivables.

“We think this is a short-term solution, rather than long-term, because it is very expensive,” LoForti says. “So, difficult times, and still a ways to go.”

But LoForti says Overland Storage is far from alone in seeking such unconventional sources of short-term credit. The finance companies he met before closing Overland’s deal told him they have been overwhelmed by requests from other companies.

I’ve known LoForti for a long time. We know a lot of the same people. He was named as Overland’s CFO in 1995, about the time I moved to the business desk at The San Diego Union-Tribune, and he played a key role in Overland’s IPO in 1997. We’ve had many discussions as the tech bubble popped and as much of the IT market bypassed the tape-based data backup and archiving machines that gave the company its start in 1981.

Overland still manufacturers tape libraries and autoloaders, along with network-attached storage servers, and fibre channel storage devices. But the company set out in a new direction in October by forming a strategic alliance with Mobotix Vision Systems, which makes high-resolution camera networks that provide Internet-based video surveillance systems equipped with data archiving capabilities.

The new strategy is intriguing, but Overland still needs cash and it must overcome a variety of problems.

The company’s last financial statement, for the three months that ended Sept. 30, lays out three years’ of recurring losses, negative cash flows and other woes that “raise substantial doubt about our ability to continue as a going concern.”

The company, which has about 350 employees worldwide, also says it has to get the price of its common stock to $1 a share (or higher) for 10 consecutive business days before March 30 to maintain its listing on NASDAQ. I’ll bet a lot of those notices have been going around.

Overland’s share price was unchanged yesterday at 34 cents a share. It traded as high as $1.91 earlier this year.

The company still has other options. Management put forward a proposal for a reverse stock split for shareholders to consider at the company’s annual meeting set for Tuesday at Overland’s corporate headquarters. That could increase its share price. The company could put itself up for sale. With a market value of less than $5 million, Overland’s board also could take the company private.

Asked about that, LoForti says, “I would say the board is considering various solutions.”

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San Diego’s Overland Storage (NASDAQ: OVRL) says it has closed a two-year deal with Marquette Commercial Finance that will help Overland’s liquidity by enabling it to finance as much as $9 million of its accounts receivables. The deal allows Overland to get cash more quickly from sales of its data storage hardware and software products, instead of waiting for payments from its mostly commercial customers.

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San Diego’s Overland Storage said yesterday it has formed a strategic alliance with Mobotix Vision Systems, which makes high-resolution camera networks, to provide video surveillance systems equipped with data archiving capabilities. The partnership signals a new direction for Overland, which has seen its core business in data storage erode in recent years.

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