Sphere 3D Corporation (TSX-V:ANY) (OTCQX:SPIHF) ("Sphere 3D" or the
"Company"), a virtualization technology solution provider making it
possible for incompatible devices and applications to run over the
cloud, today announced that it has entered into a definitive
agreement to acquire V3 Systems, Inc. ("V3" or "V3 Systems")
Founded in 2010 and based in Salt Lake City, Utah, V3 is a
technology leader in desktop cloud management solutions. V3 is the
creator of the Desktop Cloud Orchestrator™ ("DCO") software, which
allows administrators to manage local, cloud hosted, or hybrid
virtual desktop deployments and the V3 Appliance; a series of
purpose-built, compact, efficient and easy-to-manage servers. As a
VMware OEM embedded partner, V3 has revolutionized the speed, ease
of use, deployment and even the data center required for virtual
desktop infrastructure (VDI). V3 has won numerous awards including
a DEMOgod™ Award, Best Startup Company at the Best of INTEROP 2012,
and a Utah Innovation Award in 2013. The V3 customer list includes
the FBI, U.S. Department of Labor, U.S. Naval Academy, University
of Texas, Blue Cross Blue Shield, and Children's Hospital of
Alabama, among others.
"This acquisition will quickly add breadth to our overall
product portfolio, and fast tracks our transition to commercial
operations with accretive revenue from day one," said Sphere 3D's
CEO Peter Tassiopoulos "The V3 executive and Sphere 3D team share a
vision of anywhere, anytime computing. Through this acquisition we
will be able to accelerate on the delivery of that vision"
Sphere 3D has been working closely with V3 for several months
and commenced shipping of V3 Appliances to customers in January
2014. Sphere 3D and its global licensee, Overland Storage Inc.
(Nasdaq:OVRL), have expanded their relationship to include the V3
offering and will embed some of Overland's award winning Network
Assisted Storage (NAS) and Clustered Storage technology within the
product suite to create new Software Defined Storage capability.
Overland will deliver both the Sphere 3D and V3 products through
Overland's extensive global network of channel partners and service
providers.
"Sphere 3D's ground-breaking work in virtualizing and delivering
applications coupled with V3's high-performance virtual desktops
and management tools will create a new product category within the
end user computing industry," said V3 Systems' CEO Ric Lindstrom.
"Bringing together the two technologies will provide a true
contextual desktop and application experience. We expect this
combination will offer a very compelling solution to customers in
sectors such as financial services, government, education, and
healthcare."
Utilizing the V3 DCO software, a desktop administrator or user
can synchronize their images to images being hosted in the cloud,
allowing for easy and simple fail-over and service levels that
enhance performance, security, up-time, and a host of other
desirable features which are prohibitively expensive or impossible
when compared to physical desktop deployment implementations,
traditional data as a service (DaaS), or even VDI.
The V3 Appliance is a purpose built server designed for easy
deployment and support. Seamless data center integration is
accomplished by housing every system and software-critical
component within the V3 Appliance, for a solution that can be
implemented out-of-the-box. With substantially less hardware to
support and the ability to perform distributed deployment of
virtual desktops through a single user-friendly interface, the
simplicity of the V3 architecture translates into minimal IT
management. Organizations can deploy anywhere from 50 to thousands
of virtual desktops by deploying additional V3 Appliances into
server racks, providing for ease of scalability.
"We founded V3 Systems to address performance bottlenecks
inherent in legacy on premise and cloud-based VDI deployments,"
said V3 Systems founder and Chief Scientific Officer, Peter
Bookman. "Speed is a funny thing...you never know you need it until
you experience it, and then you can't live without it. V3 Systems
continues to lead the way in providing the best computing
experience possible. This relationship will ensure continual
thought leadership in breaking down barriers to this level of end
user computing."
Terms and Closing
Sphere 3D and V3 have entered into an Asset Purchase Agreement,
whereby a wholly-owned subsidiary of Sphere 3D will acquire all the
assets, including patents, trademarks and other intellectual
property, as well as customer lists, contracts and other operating
agreements of V3 Systems. In addition, all key employees of V3
Systems will join Sphere 3D on closing.
On closing, Sphere 3D will satisfy the purchase price of USD
$9.7 million by payment of USD $4.0 million in cash (less any
amounts received on an interim basis prior to closing) and the
issuance of 1,089,867 common shares of Sphere 3D (the "Payment
Shares"). The Payment Shares are issued in accordance with TSXV
Policy 1.1 at a deemed price of USD $5.23 (based on the current F/X
rate of USD $1.00 = CAD $1.105 is CAD $5.80) being the 20-day
weighted average share price on December 4, 2013, which was the
date the parties executed the Letter of Intent. In addition, V3
shall be entitled to receive an earn-out, based on achieving
certain milestones in revenue and gross margin, of up to a further
USD $5.0 million, payable at the option of Sphere 3D in cash or
shares (up to a maximum of 1,051,414 common shares), to be priced
at the 20-day weighted average trading price preceding the date(s)
the earn-out is realized. The transaction was negotiated at
arms-length and no finder's fees will be paid in connection with
closing.
The shares are subject to resale restrictions of four months and
one day as per applicable Canadian securities laws. In addition,
the shares issued as part of this transaction are subject to
restrictions in accordance with applicable United States securities
laws. In addition, the terms of the Asset Purchase Agreement
provide that the Payment Shares cannot be distributed to the
shareholders of V3 prior to January 1, 2015 without the consent of
Sphere 3D.
The purchase is subject to various pre-closing conditions,
including completion of due diligence, financing, receipt of final
TSXV approval, and various closing conditions customary of a
transaction of this nature. It is anticipated that closing will
occur on or about February 28, 2014.
Investor Conference Call
A conference call to discuss the acquisition will be held
February 12, 2014 at 8:30 a.m. ET (5:30 a.m. PT). To access the
conference call, please dial 1-877-476-8829.
Please connect at least 10 minutes prior to the conference call
to ensure that you have adequate time to join.
An archived recording of the conference call will be available
until March 12, 2014 at midnight. To listen to this recording
access: URL:
https://onecast.thinkpragmatic.com/ses/gjUhZTww7-XuHneLshxU6Q~~
About Sphere 3D Corporation
Sphere 3D Corporation (TSX-V:ANY) (OTCQX:SPIHF) is a
Mississauga, Ontario based virtualization technology solution
provider whose patent pending Glassware 2.0™ technology makes it
possible for incompatible devices and applications to run over the
cloud, without sacrificing performance or security. Sphere 3D's
Glassware 2.0™ ultra-thin client allows third parties to deliver
fully featured products to any cloud-connected device independent
of operating system or hardware. For additional information visit
www.sphere3d.com or access the Company's public filings at
www.sedar.com.
Forward-Looking Statements
This release contains forward-looking statements.
Forward-looking statements, without limitation, may contain the
words believes, expects, anticipates, estimates, intends, plans, or
similar expressions. Forward-looking statements are not guarantees
of future performance. They involve risks, uncertainties and
assumptions and actual results could differ materially from those
anticipated. Forward looking statements are based on the opinions
and estimates of management at the date the statements are made,
and are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
In the context of any forward-looking information please refer to
risk factors detailed in, as well as other information contained in
the Company's filings with Canadian securities regulators
(www.sedar.com).
Neither TSXV nor its Regulation Services Provider (as
that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
CONTACT: Investor Contact
Sphere 3D Contact:
Sphere 3D Corporation
Peter Tassiopoulos, Chief Executive Officer
Tel: (416) 749-5999
peter@sphere3d.com
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