In addition to the Masters of the Universe sequel, Cannon Films also had the rights to Marvel's Spider-Man at the time. Director Albert Pyun was set up to do the Masters sequel and their Spider-Man movie, but financial troubles caused those projects to fall through and Cannon to lose the Spider-Man rights. Pre-production was already going on both films and Cannon/Albert Pyun ended up using all of the sets, props, and costumes from these two failed films to make Pyun's film Cyborg staring Jean-Claude Van Damme.
Also, I highly recommend checking out the Cannon Films documentary Electric Boogaloo. Not only do you get to see background on the crazy films they made, but their more highbrow work like the Charles Bukowski penned Barfly, Norman Mailer's Tough Guys Don't Dance, and Franco Zeffirelli's Othello. One of my favorite stories from the doc is after the two cousins Golan and Globus had parted ways, they both sensed the Lambada dancing craze sweeping the nation and raced to get their Lambada picture into theaters first. They ended up releasing their competing pictures (Lambada and The Forbidden Dance) on the same day, so whatever audience there might have been was split in half and neither film was successful.
Great episode! I really enjoyed it.