PROSPECTUS
Filed Pursuant to Rule 424(b)(3)
Registration
Statement No.: 333- 206359
1,779,126 Common Shares
________________________
This prospectus relates to the resale or other disposition by
certain selling shareholders identified in this prospectus, or their
transferees, of up to an aggregate of 1,779,126 common shares comprised of (i)
1,529,126 outstanding common shares issued pursuant to the terms of the Asset
Purchase Agreement, dated as of August 10, 2015, by and among Imation Corp., a
Delaware corporation, on the one hand, and Overland Storage, Inc., a California
corporation and wholly-owned subsidiary of ours, and us, on the other hand, and
(ii) up to 250,000 common shares issuable pursuant to the terms of an
outstanding warrant issued in connection with the Asset Purchase Agreement, if
and to the extent that, the aggregate proceeds received by the selling
shareholder from the sale of the 1,529,126 common shares is less than
approximately $6.3 million.
The selling shareholders may, from time to time, sell,
transfer, or otherwise dispose of any or all of their common shares on any stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These dispositions may be at fixed prices, at prevailing
market prices at the time of sale, at prices related to the prevailing market
price, at varying prices determined at the time of sale, or at negotiated
prices. See Plan of Distribution for additional information.
We are not offering any common shares for sale under this
prospectus, and we will not receive any of the cash proceeds from the sale or
other disposition of the common shares covered hereby. However, the warrant
entitles the holder to purchase our common shares at an exercise price of $0.01
per common share, and we will receive the exercise price of any warrants
exercised for cash. In addition, Imation may be required to provide us with
additional inventory pursuant to the terms of the Asset Purchase Agreement, if,
for a value equal to, and to the extent that, the aggregate proceeds received by
the selling shareholder from the sale of the 1,529,126 common shares exceeds
approximately $7 million.
Our common shares are traded on The Nasdaq Global Market under
the symbol ANY. On October 5, 2015, the last reported sale price for our
common shares on Nasdaq was $2.69 per share.
We will pay the expenses related to the registration of the
common shares covered by this prospectus. The selling shareholders will pay any
commissions and selling expenses they may incur.
________________________
Our business and an investment in our securities involve
significant risks. You should read the section entitled "Risk
Factors" on page S-7 of this prospectus and the risk factors
incorporated by reference into this prospectus as described in that section
before investing in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense. This prospectus is not an offer to sell these
securities, and the selling shareholders are not soliciting offers to buy these
securities in any state where the offer or sale of these securities is not
permitted.
________________________
The date of this prospectus is October 13, 2015.
TABLE OF CONTENTS
|
Page |
Prospectus Supplement |
|
|
|
ABOUT THIS PROSPECTUS |
S-1 |
|
|
WHERE YOU CAN FIND ADDITIONAL INFORMATION |
S-1 |
|
|
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
|
S-2 |
|
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS |
S-3 |
|
|
PROSPECTUS SUMMARY |
S-4 |
|
|
RISK FACTORS |
S-7 |
|
|
USE OF PROCEEDS |
S-11 |
|
|
SELLING SHAREHOLDERS |
S-11 |
|
|
PLAN OF DISTRIBUTION |
S-12 |
|
|
CAPITALIZATION AND INDEBTEDNESS |
S-15 |
|
|
PRICE RANGE OF OUR SHARES |
S-16 |
|
|
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST
FOREIGN PERSONS |
S-17 |
|
|
OFFERING EXPENSES |
S-17 |
|
|
SHARE CAPITAL |
S-18 |
|
|
INDEMNIFICATION OF DIRECTORS AND OFFICERS |
S-18 |
|
|
LEGAL MATTERS |
S-19 |
|
|
EXPERTS |
S-20 |
|
|
Prospectus, dated October 9, 2015 |
|
|
|
ABOUT THIS PROSPECTUS |
1 |
|
|
WHERE YOU CAN FIND ADDITIONAL INFORMATION |
1 |
|
|
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
|
2 |
|
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS |
3 |
|
|
PROSPECTUS SUMMARY |
4 |
|
|
RISK FACTORS |
5 |
|
|
USE OF PROCEEDS |
8 |
|
|
SELLING SHAREHOLDERS |
8 |
|
|
PLAN OF DISTRIBUTION |
9 |
|
|
CAPITALIZATION AND INDEBTEDNESS |
12 |
|
|
PRICE RANGE OF OUR SHARES |
13 |
|
|
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST
FOREIGN PERSONS |
14 |
|
|
OFFERING EXPENSES |
14 |
|
|
SHARE CAPITAL |
15 |
|
|
INDEMNIFICATION OF DIRECTORS AND OFFICERS |
15 |
|
|
LEGAL MATTERS |
15 |
|
|
EXPERTS |
16
|
-i-
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form F-3
that we filed with the Securities and Exchange Commission using a shelf
registration or continuous offering process.
You should read this prospectus, the information and documents
incorporated by reference, and the additional information described under the
heading Where You Can Find Additional Information below carefully because
these documents contain important information you should consider when making
your investment decision. Whenever we make reference in this prospectus to any
of our contracts, agreements or other documents, the references are not
necessarily complete and you should refer to the exhibits attached to the
registration statement or the documents incorporated by reference for copies of
the actual contract, agreements or other document. See Where You Can Find More
Information and Information Incorporated by Reference.
You should rely only on the information provided in this
prospectus and the information and documents incorporated by reference into this
prospectus. We have not, and the selling shareholders have not, authorized
anyone to provide you with different information. This prospectus is not an
offer to sell these securities, and the selling shareholders are not soliciting
offers to buy these securities, in any state where the offer or sale of these
securities is not permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common shares. You should not
assume that the information contained in this prospectus is accurate as of any
date other than the date on the front cover of this prospectus, or that the
information contained in any document incorporated by reference is accurate as
of any date other than the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus or any sale of a security.
In this prospectus, unless otherwise indicated or the context
otherwise requires, references to Sphere, we, company, us, or our
refer to Sphere 3D Corp. and its consolidated subsidiaries, and references to
selling shareholders refer to those shareholders listed herein under Selling
Shareholders, and their transferees.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, applicable to foreign private
issuers. We anticipate filing with the SEC, within three months after the end of
each fiscal year, an Annual Report on Form 40-F containing financial statements
audited by an independent accounting firm. We also file with the SEC Reports of
Foreign Private Issuer on Form 6-K and other information with the SEC as
required by the Exchange Act. We, as a foreign private issuer, are exempt from
the rules under the Exchange Act prescribing certain disclosure and procedural
requirements for proxy solicitations, and our officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery
provisions contained in Section 16 of the Exchange Act, with respect to their
purchases and sales of shares. In addition, we are not required to file annual,
quarterly and current reports and financial statements with the SEC as
frequently or as promptly as U.S. companies whose securities are registered
under the Exchange Act. You can find, copy and inspect information we file with
the SEC (including exhibits to such documents) at the SECs Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain additional
information about the Public Reference Room by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains a site on the Internet at
http://www.sec.gov which contains reports and other information that we file
electronically with the SEC. You may also review such reports and other
documents we file with the SEC on our website at http://www.sphere3d.com.
Information included on our website is not a part of this prospectus. This
prospectus is part of a registration statement that we filed with the SEC. The
registration statement contains more information than this prospectus regarding
our common shares and us, including exhibits.
S-1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference information into this
prospectus. This means that we are disclosing important information to you by
referring you to another document that has been separately filed with or
furnished to the SEC. The information incorporated by reference is considered to
be part of this prospectus, and certain information that we later file with or
furnish to the SEC will automatically update and supersede the information
contained in documents earlier filed with or furnished to the SEC or contained
in this prospectus. The following documents filed with or furnished to the SEC
are incorporated herein by reference:
|
|
Our Annual Report on Form 40-F (File No. 001-36532) filed
with the SEC on March 31, 2015; |
|
|
|
|
|
The description of our common shares contained in our
Registration Statement on Form 8-A (File No. 001-36532) filed with the
Commission on July 7, 2014 pursuant to Section 12 of the Exchange Act, and
any other amendment or report filed for the purpose of updating such
description; |
|
|
|
|
|
The audited consolidated balance sheets of our company
and subsidiaries as of December 31, 2013 and 2012, and the related audited
consolidated statements of operations, equity and comprehensive income
(loss), and cash flows for the years ended December 31, 2013 and 2012; the
consolidated audited balance sheets of Overland Storage, Inc. and
subsidiaries as of June 30, 2014 and 2013, and the related audited
consolidated statements of operations, equity and comprehensive income
(loss), and cash flows for the fiscal years ended June 30, 2014 and 2013;
the audited consolidated balance sheets of Tandberg Data S.à r.l. and
subsidiaries as of December 31, 2013 and 2012, and the related audited
consolidated statements of operations, equity and comprehensive income
(loss), and cash flows for the years ended December 31, 2013 and 2012; the
unaudited pro forma condensed combined financial information of our
company, the Overland companies and the Tandberg companies giving effect
to the acquisition of the Overland companies and derived from the
historical consolidated financial statements and notes thereto of our
companies; the description of the terms of our merger with Overland
Storage, Inc., together with Annex A; and the description of the rights of
our shareholders contained in our Registration Statement on Form F-4 (File
No. 333- 197569) filed with the SEC on July 23, 2014, as subsequently
amended; |
|
|
|
|
|
Our Reports of Foreign Private Issuer on Form 6-K (File
No. 001-36532) furnished to the SEC on April 1, 2015, May 15, 2015, July
31, 2015, August 13, 2015, August 14, 2015, September 15, 2015, and
October 7, 2015; and |
|
|
|
|
|
All Annual Reports on Form 40-F and all Reports of
Foreign Private Issuer on Form 6-K (or portions thereof) that indicate
that they are being incorporated by reference into this registration
statement and that we file with the SEC on or after the date on which the
registration statement is first filed with the SEC until the termination
or completion of the offering under this prospectus.
|
Unless otherwise identified, documents or information deemed to
have been furnished and not filed in accordance with SEC rules shall not be
deemed incorporated by reference into this registration statement. We may
incorporate future Reports of Foreign Private Issuer on Form 6-K (or portions
thereof) that we furnish subsequent to the date of this prospectus by indicating
in such Form 6-K (or portions thereof) that they are being incorporated by
reference into this prospectus.
Any statement contained herein or in a document, all or a
portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or amended, to
constitute a part of this registration statement.
You may obtain copies, without charge, of documents
incorporated by reference in this prospectus, by requesting them in writing or
by telephone from us as follows:
Sphere 3D Corp.
240 Matheson Blvd. East
Mississauga,
Ontario L4Z 1X1
Attention: Investor Relations
(800) 729-8725
Exhibits to the filings will not be sent unless those exhibits
have been specifically incorporated by reference in this prospectus.
S-2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus, any prospectus
supplement and the documents we incorporate by reference in this prospectus or
any prospectus supplement constitute forward-looking information that involves
risks and uncertainties. This forward-looking information includes, but is not
limited to, statements with respect to managements expectations regarding our
future growth and business plans, business planning process, results of
operations, uses of cash, performance, and business prospects. This
forward-looking information may also include other statements that are
predictive in nature, or that depend upon or refer to future events or
conditions. Statements with the words could, expects, may, will,
anticipates, assumes, intends, plans, believes, estimates,
guidance and similar expressions are intended to identify statements
containing forward-looking information, although not all forward-looking
statements include such words. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances contain forward-looking information. Statements containing
forward-looking information are not historical facts but instead represent
managements expectations, estimates and projections regarding future events.
Although management believes the expectations reflected in such
forward-looking statements are reasonable, forward-looking statements are based
on the opinions, assumptions 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. These factors include,
but are not limited to: our limited operating history; our ability to manage
growth; our ability to integrate the businesses of Overland Storage, Inc. and V3
Systems, Inc.; the impact of competition; the investment in technological
innovation; any defects in components or design of our products; the retention
or maintenance of key personnel; the possibility of significant fluctuations in
operating results; currency fluctuations; our ability to maintain business
relationships; financial, political or economic conditions; financing risks;
future acquisitions; our ability to protect our intellectual property; third
party intellectual property rights; volatility in the market price for our
common shares; our compliance with financial reporting and other requirements as
a public company; conflicts of interests; future sales of our common shares by
our directors, officers and other shareholders; dilution and future sales of
common shares; acquisition-related risks and other factors described under the
heading Risk Factors.
In addition, if any of the assumptions or estimates made by
management prove to be incorrect, actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the
forward-looking information. Accordingly, investors are cautioned not to place
undue reliance on such statements.
All of this forward-looking information is qualified by these
cautionary statements. Statements containing forward-looking information are
made only as of the date of such document. We expressly disclaims any obligation
to update or alter statements containing any forward-looking information, or the
factors or assumptions underlying them, whether as a result of new information,
future events or otherwise, except as required by law.
S-3
PROSPECTUS SUMMARY
The following is only a summary and therefore does not contain
all of the information you should consider before investing in our securities.
We urge you to read this entire prospectus, including the matters discussed
under Risk Factors and the risk factors incorporated by reference into this
prospectus as described in that section, and the more detailed consolidated
financial statements, notes to the consolidated financial statements and other
information incorporated by reference from our other filings with the SEC.
Our Company
We are a virtualization technology and data management
solutions provider with a portfolio of products that address the complete data
continuum. We enable the integration of virtual applications, virtual desktops,
and storage into workflow, and allows organizations to deploy a combination of
public, private or hybrid cloud strategies. We achieve this through the sale of
solutions that are derived from its primary product groups: disk systems,
virtualization, and data management and storage.
We have a global presence and maintain offices in multiple
locations. Executive offices and our primary operations are conducted from our
San Jose and San Diego, California locations. Our main office is located at 9112
Spectrum Center Blvd., San Diego, CA 92123. Our virtualization product
development is primarily done from its research and development center near
Toronto, Canada. Our European headquarters are located in Germany. We maintain
additional offices in Singapore, Japan, and the United Kingdom.
We were incorporated on May 2, 2007 under the Business
Corporations Act (Ontario) as T.B. Mining Ventures Inc.. Our principal
executive offices are located 240 Matheson Blvd. East Mississauga, Ontario L4Z
1X1 and our main telephone number is (858) 571-5555. Our Internet address is
http://www.sphere3d.com. Except for the documents referred to under
Where You Can Find Additional Information which are specifically incorporated
by reference into this prospectus, information contained on our website or that
can be accessed through our website does not constitute a part of this
prospectus. We have included our website address only as an interactive textual
reference and do not intend it to be an active link to our website.
The Offering |
|
|
Common shares offered by the selling shareholders |
1,779,126 shares, comprised of (i) 1,529,126
issued and |
|
outstanding common shares and (ii) up to
250,000 common |
|
shares issuable pursuant to an outstanding
warrant. |
|
|
Common shares to be outstanding after the offering: |
41,261,718 (1) |
|
|
Nasdaq Global Market symbol: |
ANY |
|
|
Use of proceeds: |
We will not receive any of the proceeds from
the sale or |
|
other disposition of the common shares offered
hereby. |
|
However, we will receive the exercise price of
any warrants |
|
exercised for cash. |
|
|
Risk factors: |
See Risk Factors beginning on page S-7 and
the risk |
|
factors incorporated by reference into this
prospectus as |
|
described in that section, and the other
information included |
|
in this prospectus or incorporated by reference
for a |
|
discussion of factors you should consider
before making an |
|
investment decision |
(1) |
The number of common shares shown to be outstanding is
based on the number of common shares outstanding as of September 30, 2015,
and includes common shares issuable upon exercise of the warrant issued
pursuant to the Asset Purchase Agreement. The number does not include (i)
common shares issuable or reserved for issuance upon the exercise of other
outstanding warrants or options granted or available under our equity
compensation plans or (ii) the 345,000 common shares or 86,250 common
shares issuable upon exercise of certain warrants we expect to issue upon
the closing of a registered direct placement on or about October 13, 2015.
At our June 2015 annual meeting of our shareholders, the shareholders
ratified the adoption of our 2015 Performance Incentive Plan, initially
authorizing the award of up to a maximum of 8,790,315 common shares pursuant to the plan, as
well as our Employee Stock Purchase Plan, authorizing the purchase by employees
of up to 2,000,000 common shares under the plan. |
S-4
Recent Developments
Unaudited Interim Cash Positions and Indebtedness
As of September 30, 2015, we had approximately $5.0 million in
cash and cash equivalents, a principal balance of $5.0 million outstanding under
our revolving credit agreement, a principal balance of $5.3 million outstanding
under our amended and restated loan and security agreement, and an outstanding
balance of $19.5 million under our convertible debenture.
Registered Direct Sales
On September 28, 2015, we closed on the issuance and sale of,
in the aggregate, 1,072,961 of our common shares, warrants exercisable to
purchase up to 268,240 common shares, adjustment warrants which may, in certain
circumstances, become exercisable to purchase a number of common shares to be
determined at such time (if any) as such adjustment warrants become exercisable
following an additional financing by us prior to December 31, 2015, for an
aggregate offering price of approximately U.S.$3.3 million. Each of these
warrants has an initial exercise price of U.S.$2.33 per warrant share. The
warrants are immediately exercisable and have a five year term. Each adjustment
warrant has an initial exercise price of U.S.$0.01 per common share. The
adjustment warrants will become exercisable only if we complete an additional
financing prior to December 31, 2015 under the circumstances described below in
the section entitled Risk Factors beginning on page S-7, and, in the event
they become exercisable, will expire on March 31, 2016. We expect to close on
the issuance and sale of an additional 345,000 common shares, warrants to
purchase 86,250 common shares, and adjustment warrants on or about October 13,
2015.
Restricted Share Issuances
At our June 2015 Annual and Special Meeting of Shareholders,
the shareholders approved the adoption of our 2015 Performance Incentive Plan,
initially authorizing the award of up to a maximum of 8,790,315 common shares
pursuant to the plan, as well as approved our Employee Stock Purchase Plan,
authorizing the purchase of up to 2,000,000 common shares by employees under the
plan. On August 26, 2015, our Compensation Committee granted to certain
executive officers awards of, in aggregate, 1.9 million restricted stock units
and 0.5 million of non-qualified stock options. The restricted stock units vest
and are payable over a period of approximately 2.5 years. On August 31, 2015,
the non-qualified stock options vested 22.22% and the remainder vests in a
series of equal monthly amounts over 2.3 years.
V3 Litigation
In April 2015, we filed a proof of claim in connection with
bankruptcy proceedings of V3 Systems, Inc. (V3) based on breaches by V3 of the
Asset Purchase Agreement entered into between V3 and us dated February 11, 2014
(the APA). On October 6, 2015, US Dissolution Liquidating Trust, the apparent
successor to V3, filed a complaint against us and certain of our current and
former directors in the United States Bankruptcy Court for the District of Utah
Central Division objecting to our proof of claim and asserting claims for
affirmative relief against us and our directors. This complaint alleges, among
other things, that Sphere breached the APA and engaged in securities fraud in
connection with the issuance of the common shares issued to V3 in connection
therewith. The plaintiff claims that the alleged breaches and certain other
actions and/or omissions on the part of Sphere and its directors resulted in
V3s failure to receive earn-out consideration under the APA and caused V3 to be
unable to timely sell the Sphere common shares received by V3 pursuant to the
APA and, as a result, V3 defaulted on several debts, ultimately leading to its
bankruptcy. The plaintiff seeks, among other things, monetary damages for the
loss of the potential earn-out consideration, the value of the common shares
held back by us pursuant to the APA and costs and fees. We believe the lawsuit
to be without merit and intend to vigorously defend against the action.
S-5
Settlement of Merger Litigation
On October 2, 2015, the court in the previously disclosed
consolidated action relating to our merger with Overland Storage, Inc. approved
the terms of the class action settlement and the merger litigation was dismissed
with prejudice and terminated on that date. The consolidated action had alleged
breaches of fiduciary duties and conflicts of interest against Overlands
directors relating to the merger process, the terms of the merger agreement, and
the consideration to be received by Overlands shareholders under the terms of
the merger agreement. On June 26, 2015, the court had preliminarily approved the
proposed settlement under a memorandum of understanding and stipulation of settlement entered into
between plaintiffs and defendants. The memorandum of understanding provided,
among other things, for the inclusion of supplemental disclosures in Amendment
No. 2 to the Registration Statement on Form F-4 that was filed with the
Securities and Exchange Commission on October 14, 2014.
S-6
RISK FACTORS
An investment in our securities involves a high degree of
risk. In addition to the other information included in this prospectus, you
should carefully consider the risk factors set forth in our most recent Annual
Report on Form 40-F on file with the SEC, which is incorporated by reference
into this prospectus, as well as the following risk factors, which supplement or
augment the risk factors set forth in our Annual Report on Form 40-F. Before
making an investment decision, you should carefully consider these risks as well
as other information we include or incorporate by reference in this prospectus
and the accompanying prospectus supplement. The risks and uncertainties not
presently known to us or that we currently deem immaterial may also materially
harm our business, operating results and financial condition and could result in
a complete loss of your investment.
Risks Related to Our Common Shares and this Offering
Our share price has been volatile and your investment in
our common shares could decrease in value.
The market price for securities of technology companies,
including ours, historically has been highly volatile, and the market from time
to time has experienced significant price and volume fluctuations that are
unrelated to the operating performance of such companies. For example, during
the 12-month period ended September 30, 2015, our closing share price on The
NASDAQ Global Market has ranged from a low of $1.99 to a high of $9.50.
Fluctuations in the market price or liquidity of our common shares may harm the
value of your investment in our common shares. You may not be able to resell
your common shares at or above the price you pay for those shares due to
fluctuations in the market price caused by changes in our operating performance
or prospects and other factors, including, among others:
|
|
actual or anticipated fluctuations in our
operating results or future prospects; |
|
|
|
|
|
our announcements or our competitors
announcements of new products; |
|
|
|
|
|
public reaction to our press releases, our
other public announcements and our filings with the SEC; |
|
|
|
|
|
strategic actions by us or our competitors;
|
|
|
|
|
|
changes in financial markets or general
economic conditions; |
|
|
|
|
|
our ability to raise additional capital as
needed; |
|
|
|
|
|
developments regarding our patents or
proprietary rights or those of our competitors; and |
|
|
|
|
|
changes in stock market analyst recommendations
or earnings estimates regarding our common shares, other comparable
companies or our industry generally. |
Future sales of our common shares could adversely affect
the market price and our future capital-raising activities could involve the
issuance of equity securities, which would dilute your investment and could
result in a decline in the trading price of our common shares.
We may sell securities in the public or private equity markets
if and when conditions are favorable, even if we do not have an immediate need
for additional capital at that time. Sales of substantial amounts of common
shares, or the perception that such sales could occur, could adversely affect
the prevailing market price of our common shares and our ability to raise
capital. We may issue additional common shares in future financing transactions
or as incentive compensation for our executive management and other key
personnel, consultants and advisors. Issuing any equity securities would be
dilutive to the equity interests represented by our then-outstanding common
shares. The market price for our common shares could decrease as the market
takes into account the dilutive effect of any of these issuances.
Sales of shares issued in recent placements may cause the
market price of our shares to decline.
We have recently closed private placements and issued
common shares and warrants exercisable to purchase our common shares. Further,
we have agreed to register with the SEC the common shares issued in these
offerings and issuable upon exercise of the warrant for resale. Upon the
effectiveness of the registration statements for these offerings, the common
shares issued in the offerings and issuable upon exercise of the warrants may be
freely sold in the open market. The sale of a significant amount of these common
shares in the open market, or the perception that these sales
may occur, could cause the market price of our common shares to decline or
become highly volatile.
S-7
Future sales of our common shares under certain
circumstances will trigger price-protection provisions in certain of private
placement agreements, outstanding warrants and adjustment warrants, which would
dilute your investment and could result in a decline in the trading price of our
common shares.
If, at any time until December 31, 2015, we complete an equity
financing involving the issuance and sale of our common shares and related
additional warrants at a price per common share that is lower than $2.33, then
(a) the initial exercise price for the warrants we issued in our recent
registered direct financings will be adjusted to equal the exercise price of
such additional warrants (if lower) as of the date of the consummation of their
sale and (b) if the warrant coverage in such financing is greater than 25%, the
number of common shares issuable upon exercise of the warrants issued in our
recent registered direct financings will be increased to the product obtained by
multiplying the number of common shares issuable upon exercise of these warrants
immediately prior to the adjustment by, the quotient obtained by dividing: (x)
the number of common shares issuable upon exercise of the additional warrants
issued divided by the number of common shares issued in such additional equity
financing to the holders of the additional warrants; by (y) the number of common
shares issuable upon exercise of the warrants issued in our recent registered
direct financings immediately prior to the adjustment divided by the number of
common shares issued to the investor in our recent registered direct financings
(aggregated with common shares issuable to the warrant holder pursuant to
adjustable warrants) or (c) if the warrant coverage in such financing is less
than 25%, the number of common shares issuable upon exercise of the warrants
issued in our recent registered direct financings shall be increased to 25% of
the quotient obtained by dividing the aggregate purchase price paid by the
warrant holder by the per share purchase price in the additional financing.
In addition, if, at any time until December 31, 2015, we
complete an equity financing involving the issuance and sale of our common
shares at a price per share that is lower than $2.33, then the adjustment
warrants we issued in our recent registered direct financings shall become
exercisable for that number of common shares equal to (i) the number of common
shares that the adjustment warrant holder would have received for its aggregate
investment amount in our recent registered direct financings had the purchase
price for one common share, a warrant and an adjustment warrant been equal to
the purchase price per share in such additional equity financing minus (ii) the
number of common shares actually purchased by such investor in our recent
registered direct financings.
Further, we have agreed to give the investor in our August
private placement additional common shares and adjust the exercise price for the
warrants issued to this investor if, in connection with an equity capital raise
for cash on or before December 31, 2015, we sell common shares at a price per
share that is lower than $2.33 per share or sell new warrants to purchase common
shares with an exercise price per share that is lower than $2.33. The number of
additional common shares the investor would receive would equal the difference
between (x) the number of shares that the investor would have received had the
Purchase Price been equal to the per share purchase price at which common shares
were issued in the additional equity financing and (y) the aggregate number of
common shares purchased by the investor in the August private placement. The
exercise price of the warrant would be adjusted to equal the exercise price per
share of the warrants issued in the additional equity financing (if lower) as of
the date of the consummation of the additional equity financing.
We may have to pay liquidated damages to our investors,
which will increase our negative cash flows.
In connection with our recent private placements, we
entered into registration rights agreements. Under the terms of these
registration rights agreements, subject to certain limited exceptions, if
registration statements covering the shares issued or issuable pursuant to the
warrants issued in such placements have not been declared effective within the
time periods specified in the registration rights agreements or we otherwise
fail to comply with certain provisions set forth in the registration rights
agreements, then we will be required to pay liquidated damages. There can be no
assurance that the registration statements will be declared effective by the SEC
or will remain effective for the time periods necessary to avoid payment of
liquidated damages.
S-8
We do not expect to pay cash dividends on our common
shares for the foreseeable future.
We have never paid cash dividends on our common shares and do
not anticipate that any cash dividends will be paid on the common shares for the
foreseeable future. The payment of any cash dividend by us will be at the
discretion of our board of directors and will depend on, among other things, our
earnings, capital, regulatory requirements and financial condition.
We may not be able to maintain our listings on The NASDAQ
Global Market , or trading on this exchange may otherwise be halted or
suspended, which may make it more difficult for investors to sell our common
shares and consequently may negatively impact the price of our common shares.
Maintaining the listing of our common shares on The NASDAQ
Global Market requires that we comply with certain listing requirements. If our
common shares cease to be listed for trading on The NASDAQ Global Market for any
reason, it may harm our share price, increase the volatility of our share price,
decrease the level of trading activity and make it more difficult for investors
to buy or sell our common shares. Our failure to maintain a listing on The
NASDAQ Global Market may constitute an event of default under our current and
any future indebtedness, which would accelerate the maturity date of such debt
or trigger other obligations. In addition, certain institutional investors that
are not permitted to own securities of non-listed companies may be required to
sell their shares adversely affecting the market price of our common shares. If
we are not listed on The NASDAQ Global Market or if our public float falls below
$75 million or do not otherwise meet the requirements for the use of Form F-3,
we will be limited in our ability to file new shelf registration statements on
SEC Form F-3 and/or to fully use one or more registration statements on SEC Form
F-3. Any such limitations may harm our ability to raise the capital we need.
Risks Related to Intellectual Property
Although we believe we have a proprietary platform for
our technologies and products, we or our customers may in the future become
subject to claims for infringement of intellectual property rights owned by
others. Further, to protect our own intellectual property rights, we may in the
future bring claims for infringement against others.
Our commercial success depends, in part, upon not infringing
intellectual property rights owned by others. Although we believe that we have a
proprietary platform for our technologies and products, we cannot determine with
certainty whether any existing third party patents or the issuance of any third
party patents would require us to alter our technology, obtain licenses or cease
certain activities. We may become subject to claims by third parties that our
technology infringes their intellectual property rights. While we provide our
customers with a qualified indemnity against the infringement of third party
intellectual property rights, we may become subject to these claims either
directly or through indemnities against these claims that we routinely provide
to our end-users and channel partners.
Further, our customers may use our products in ways that may
infringe the intellectual property rights of third parties and/or require a
license from third parties. Although we encourage our customers to use our
products only in a manner that does not infringe third party intellectual
property rights, and we know that most of our clients do so, we cannot guarantee
that such third parties will not seek remedies against us for providing products
that may enable our customers to infringe the intellectual property rights of
others. We would vigorously defend any such claims.
In addition, we may receive in the future, claims from third
parties asserting infringement, claims based on indemnities provided by us, and
other related claims. Litigation may be necessary to determine the scope,
enforceability and validity of third party proprietary or other rights, or to
establish our proprietary or other rights. Furthermore, despite precautions, it
may be possible for third parties to obtain and use our intellectual property
without our authorization. Policing unauthorized use of intellectual property is
difficult, and some foreign laws do not protect proprietary rights to the same
extent as the laws of Canada or the United States. To protect our intellectual
property, we may become involved in litigation. In addition, other companies may
initiate similar proceedings against us. The patent position of information
technology firms in particular is highly uncertain, involves complex legal and
factual questions, and continues to be the subject of much litigation. No
consistent policy has emerged from the U.S. Patent and Trademark Office or the
courts regarding the breadth of claims allowed or the degree of protection
afforded under information technology patents.
Some of our competitors have, or are affiliated with companies
having, substantially greater resources than us and these competitors may be
able to sustain the costs of complex intellectual property litigation to a
greater degree and for a longer period of time than us. Regardless of their
merit, any such claims could:
|
|
divert the attention of our management, cause
significant delays, materially disrupt the conduct of our business or
materially adversely affect our revenue, financial
condition and results of operations; |
S-9
|
|
be time consuming to evaluate and defend;
|
|
|
result in costly litigation and substantial
expenses; |
|
|
cause product shipment delays or stoppages;
|
|
|
subject us to significant liabilities; |
|
|
require us to enter into costly royalty or
licensing agreements; |
|
|
require us to modify or stop using the
infringing technology; or |
|
|
result in costs or other consequences that have
a material adverse effect on our business, results of operations and
financial condition. |
Risks Related to our Business
If we are unable to generate sufficient cash from
operations or raise additional financing, we may be unable to fund our
operations.
We require sufficient cash from operations together with cash
from debt, equity or equity based financing, including financing from this
offering, to fund our operations as currently conducted. Our available cash and
cash equivalents was $5.0 million and our outstanding indebtedness was $29.8
million as of September 30, 2015. Cash forecasts and capital requirements are
subject to change as a result of a variety of risks and uncertainties. Cash from
operations can change as a result of a variety of factors including changes in
sales levels, unexpected increases in product costs, increases in operating
costs, and changes to the historical timing of collecting accounts receivable.
In addition, we expect to continue to need raise debt, equity and equity-linked
financing in the near future, but such financing may not be available on
favorable terms on a timely basis or at all. If we are unable to generate
sufficient cash from operations or financing sources, we may be forced to make
further reductions in spending, extend payment terms with suppliers, liquidate
assets where possible and/or curtail, suspend or cease planned programs or
operations generally or possibly seek bankruptcy protection, which would have a
material adverse effect on our business, results of operations, financial
position and liquidity.
S-10
USE OF PROCEEDS
We will not receive any of the proceeds from the sale or other
disposition of the common shares offered hereby. However, the warrant entitles
the holder to purchase our common shares at an exercise price of $0.01 per
common share, and we will receive the exercise price of any warrants exercised
for cash. To the extent that we receive cash upon exercise of any warrants, we
expect to use that cash for general corporate purposes. In addition, Imation may
be required to provide us with additional inventory pursuant to the terms of the
Asset Purchase Agreement, if, for a value equal to, and to the extent that, the
aggregate proceeds received by the selling shareholder from the sale of the
1,529,126 common shares exceeds approximately $7 million.
SELLING SHAREHOLDERS
We have prepared this prospectus to allow the selling
shareholders or their donees, pledgees, transferees or other successors in
interest to sell or otherwise dispose of, from time to time, up to an aggregate
of 1,779,126 common shares issued pursuant to the Asset Purchase Agreement or
issuable by us to the selling shareholder pursuant to the terms of the warrant
we issued pursuant to the terms of the Asset Purchase Agreement. The table below
presents information regarding the selling shareholders, the common shares
beneficially owned prior to the private placement offering and the common shares
that they may sell or otherwise dispose of from time to time under this
prospectus.
We do not know when or in what amounts the selling shareholders
may sell or otherwise dispose of the common shares covered hereby. The selling
shareholders might not sell any or all of the shares covered by this prospectus
or may sell or dispose of some or all of the shares other than pursuant to this
prospectus. Because the selling shareholders may not sell or otherwise dispose
of some or all of the shares covered by this prospectus and because there are
currently no agreements, arrangements or understandings with respect to the sale
or other disposition of any of the shares, we cannot estimate the number of the
shares that will be held by the selling shareholders after completion of the
offering. However, for purposes of this table, we have assumed that all of the
common shares covered by this prospectus will be sold by the selling
shareholders.
|
|
|
|
|
Beneficial Ownership
(1) |
|
|
|
|
|
|
Number of |
|
|
Percent |
|
|
|
|
|
Number of |
|
|
Percent |
|
|
|
Shares |
|
|
of |
|
|
|
|
|
Shares |
|
|
of |
|
|
|
Beneficially |
|
|
Class |
|
|
Number of |
|
|
Beneficially |
|
|
Class |
|
|
|
Owned Prior |
|
|
Prior |
|
|
Shares |
|
|
Owned |
|
|
After |
|
Name of Selling |
|
to the |
|
|
to the |
|
|
Offered |
|
|
After this |
|
|
this |
|
Shareholder (2) |
|
Offering |
|
|
Offering |
|
|
Hereby (3) |
|
|
Offering |
|
|
Offering |
|
Imation Corp. (4) |
|
1,779,126 |
|
|
4.3% |
|
|
1,779,126 |
|
|
* |
|
|
* |
|
(1) |
Beneficial ownership is determined in accordance with
Section 13(d) of the Exchange Act and generally includes voting and
investment power with respect to securities and including any securities
that grant the selling shareholder the right to acquire common shares
within 60 days of September 30, 2015. Percentage ownership is based on
41,011,718 common shares issued and outstanding as of September 30, 2015
and assuming full exercise of the warrant issued to the selling
shareholder to purchase up to 250,000 common shares. This amounts to a
total of 41,261,718. |
|
|
(2) |
Unless otherwise indicated, this table is based on
information supplied to us by the selling shareholders and certain of our
records. |
|
|
(3) |
All 1,779,126 common shares offered pursuant to this
prospectus were acquired pursuant to our Asset Purchase Agreement with
Imation or are common shares we could be obligated to issue to the selling
shareholder pursuant to the terms of the warrant we issued pursuant to the
Asset Purchase Agreement. |
|
|
(4) |
The address for this selling shareholder is: 1 Imation
Way, Oakdale, MN 55128-3414. |
S-11
PLAN OF DISTRIBUTION
We are registering the common shares previously issued and
common shares that we could be obligated to issue to the selling shareholder
pursuant to the terms of the Asset Purchase Agreement and the warrant we
previously issued pursuant to the Asset Purchase Agreement to permit the resale
of such common shares by the selling shareholders. We will not receive any of
the proceeds from the sale by the selling shareholders of the common shares. We
will receive the exercise price of the warrant upon any exercise by payment of
cash. In addition, pursuant to the purchase price adjustment provisions of the
Asset Purchase Agreement, Imation may be required to deliver us additional
inventory acquired after the closing date of the Asset Purchase Agreement, if,
for a value equal to, and to the extent that, the aggregate proceeds received by
the selling shareholders exceeds a designated threshold, as discussed below. We
will bear all fees and expenses incident to our obligation to register the
common shares.
Pursuant to the terms of a Lock-Up Agreement, dated as of
August 10, 2015, by and between us and Imation Corp., or the Lock-up Agreement,
the selling shareholders are not permitted to offer, sell, contract to sell,
assign, transfer, hypothecate, pledge or grant a security interest in, or
otherwise dispose of the common shares registered pursuant to this prospectus,
or enter into any transaction which is designed to, or might reasonably be
expected to, have any such effect, directly or indirectly, or enter into any
swap, hedge or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of such common shares (any of the foregoing
actions, a transfer), or publicly disclose any intention to make any such
transfer; provided, however, that the selling shareholders are entitled to
transfer the common shares registered pursuant to this prospectus on the open
market or pursuant to block trades; provided, further, that without our prior
written consent, sales on the open market of the common shares registered
pursuant to this prospectus in the aggregate on any given trading day shall not
exceed 17.5% of the average daily trading volume of our common shares on Nasdaq
for the 30 trading days ending on the trading day immediately preceding such
date (and the selling shareholders shall not solicit any such transfer that is
not an open market sale), except that this limitation will not apply to block
trades by the selling shareholders; provided further, however, that without our
prior written consent, no transfer that is not on the open market (including,
without limitation, any block trades or trades pursuant to an exemption under
the Securities Act) is permitted unless the amount per common share received by
such selling shareholder in such transfer, prior to taking into account any
fees, expenses or selling discounts, concessions or commissions, equals at least
95% of the average of the closing prices for the common shares of the Company on
Nasdaq for each of the ten (10) consecutive complete trading days ending with
the third complete trading day prior to such transfer.
The selling shareholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling common shares or
interests in common shares received after the date of this prospectus from a
selling shareholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their common shares or interests in common shares on any stock exchange,
market or trading facility on which the shares are traded or in private
transactions, subject to certain limitations on transfers by the Lock-Up
Agreement. These dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated prices.
Subject to certain limitations imposed transfers by the Lock-up
Agreement, the selling shareholders may use any one or more of the following
methods when disposing of shares or interests therein:
|
|
ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers; |
|
|
|
|
|
block trades in which the broker-dealer will
attempt to sell the shares as agent, but may position and resell a portion
of the block as principal to facilitate the transaction; |
|
|
|
|
|
purchases by a broker-dealer as principal and
resale by the broker-dealer for its account; |
|
|
|
|
|
an exchange distribution in accordance with the
rules of the applicable exchange; |
|
|
|
|
|
privately negotiated transactions; |
|
|
|
|
|
short sales effected after the date the
registration statement of which this prospectus is a part is declared
effective by the SEC; |
|
|
|
|
|
through the writing or settlement of options or
other hedging transactions, whether through an options exchange or
otherwise; |
S-12
|
|
pursuant to a 10b5-1 plan or other trading
plan; |
|
|
|
|
|
broker-dealers may agree with the selling
shareholders to sell a specified number of such shares at a stipulated
price per share; |
|
|
|
|
|
a combination of any such methods of sale; and
|
|
|
|
|
|
any other method permitted by applicable law.
|
If the selling shareholders effect such transactions by selling
common shares to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling shareholders or
commissions from purchasers of the common shares for whom they may act as agent
or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). The selling
shareholders may, from time to time, pledge or grant a security interest in some
or all of the common shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the common shares, from time to time, under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending the list of selling shareholders to
include the pledgee, transferee or other successors in interest as selling
shareholders under this prospectus. The selling shareholders also may transfer
the common shares in other circumstances, in which case the transferees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
In connection with the sale of our common shares or interests
therein, the selling shareholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the common shares in the course of hedging the positions they
assume. The selling shareholders may also sell shares of our common shares short
and deliver these securities to close out their short positions, or loan or
pledge the common shares to broker-dealers that in turn may sell these
securities. The selling shareholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction). Any hedging transactions, short sales, option transactions,
derivative transactions, or any related transactions described above will,
however, be subject the limitations on transfers described in the Lock-up
Agreement.
The aggregate proceeds to the selling shareholders from the
sale of the common shares offered by them will be the aggregate purchase price
of the common shares less aggregate discounts or commissions, if any. Each of
the selling shareholders reserves the right to accept and, together with their
agents from time to time, to reject, in whole or in part, any proposed purchase
of common shares to be made directly or through agents. We will not receive any
of the proceeds from the sale by the selling shareholders of the common shares.
We will receive the exercise price of the warrant upon any exercise by payment
of cash. In addition, pursuant to the purchase price adjustment provisions of
the Asset Purchase Agreement, if the selling shareholders receive aggregate
consideration in excess of a designated threshold of approximately $7 million
(subject to adjustment based on final confirmation of net inventory at closing)
from the sale of the common shares issued to Imation at closing, Imation is
required to deliver to us an amount of inventory acquired by Imation after the
closing date of the Asset Purchase Agreement that is equal in value to such
excess amount. If the selling shareholders receive aggregate consideration from
the sale of shares issued to Imation at the closing date that is less than a
designated threshold of $6.3 million (subject to adjustment based on final
confirmation of net inventory at closing) prior to the expiration of the
warrant, then Imation may be entitled to receive proceeds from the sale of the
inventory in an amount equal to such shortfall, but not to exceed the value of
the inventory. We will bear all fees and expenses incident to our obligation to
register the common shares.
The selling shareholders also may resell all or a portion of
the shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided that they meet the criteria and conform to the
requirements of that rule and the Lock-up Agreement.
The selling shareholders and any underwriters, broker-dealers
or agents that participate in the sale of the common shares or interests therein
may be, underwriters within the meaning of Section 2(11) of the Securities
Act. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the Securities
Act. Selling shareholders who are underwriters within the meaning of Section
2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act.
S-13
To the extent required, the common shares to be sold, the names
of the selling shareholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if
applicable, the common shares may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the
common shares may not be sold unless it has been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.
We have advised the selling shareholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of shares in the market and to the activities of the selling shareholders
and their affiliates. In addition, to the extent applicable we will make copies
of this prospectus (as it may be supplemented or amended from time to time)
available to the selling shareholders for the purpose of satisfying the
prospectus delivery requirements of the Securities Act. The selling shareholders
may indemnify any broker-dealer that participates in transactions involving the
sale of the shares against certain liabilities, including liabilities arising
under the Securities Act.
We have agreed to indemnify the selling shareholders against
liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.
We have agreed with the selling shareholders to keep the
registration statement of which this prospectus constitutes a part effective
until the earlier of (i) such time as all of the shares covered by this
prospectus have been disposed of pursuant to and in accordance with the
registration statement or (ii) the date on which the shares may be sold without
restriction pursuant to Rule 144 of the Securities Act..
S-14
CAPITALIZATION AND INDEBTEDNESS
The table below sets forth our capitalization and indebtedness
as of June 30, 2015, on an actual basis.(1) You should read this
table in conjunction with our consolidated financial statements and the related
notes included in our Annual Report on Form 40-F, which is incorporated by
reference herein.
|
|
As of June 30, 2015 |
|
|
|
(in thousands of
US$) |
|
Shareholders Equity
|
|
|
|
Common Shares |
$ |
114,976 |
|
Accumulated Deficit
|
|
(37,954 |
) |
Accumulated Other Comprehensive Loss
|
|
(1,489 |
) |
|
|
|
|
Total Shareholders Equity |
$ |
75,533 |
|
|
|
|
|
Total Capitalization |
$ |
46,082 |
|
|
|
As of June 30, 2015 |
|
|
|
(in thousands of
US$) |
|
|
|
|
|
Revolving Credit
Agreement |
$ |
5,000 |
|
Amended and Restated Loan and Security
Agreement |
|
4,951 |
|
Convertible Debenture
(Long Term) |
|
19,500 |
|
|
|
|
|
Total Indebtedness |
$ |
29,451 |
|
(1) |
Subsequent to June 30, 2015, an aggregate of 3,721,879
common shares were issued pursuant to (i) the exercise of warrants, (ii)
restricted share issuance releases, (ii) the asset purchase agreement we
entered into with Imation Corp., (iii) the purchase agreement we entered
into with an investor on August 10, 2015, as amended, and (iv) the
subscription agreement we entered into with an investor on September 28,
2015. |
S-15
PRICE RANGE OF OUR SHARES
On December 28, 2012, our common shares commenced trading on
the TSX Venture Exchange under the symbol ANY. On July 8, 2014, our common
shares commenced trading on the Nasdaq Global Market under the symbol ANY. On
December 10, 2014, we voluntarily delisted our common shares from the TSXV.
The tables below set forth, for the periods indicated, the per
share high and low closing sales prices for our common shares as reported on the
Nasdaq and the TSXV. TSXV closing prices of our common shares are presented in
Canadian dollars, and the Nasdaq closing prices of our common shares are
presented in U.S. dollars.
TSXV:
|
|
ANY shares
TSXV |
|
|
|
(in C$) |
|
|
|
High |
|
|
Low |
|
Annual information for
2012, 2013, 2014 |
|
|
|
|
|
|
2012 (from
December 28, 2012) |
|
0.80 |
|
|
0.74 |
|
2013 |
|
6.56 |
|
|
0.45 |
|
2014
(through December 10, 2014) |
|
11.15 |
|
|
5.45 |
|
Quarterly information for
the past two fiscal years and subsequent quarters: |
|
|
|
|
|
|
2013, quarter ended |
|
|
|
|
|
|
December 31 |
|
6.56 |
|
|
2.70 |
|
September
30 |
|
2.88 |
|
|
0.50 |
|
June 30 |
|
0.73 |
|
|
0.45 |
|
March 31
|
|
0.85 |
|
|
0.53 |
|
2014, quarter ended
|
|
|
|
|
|
|
December 31
(through December 10, 2014) |
|
10.84 |
|
|
5.90 |
|
September 30 |
|
11.15 |
|
|
6.70 |
|
June 30 |
|
10.84 |
|
|
6.75 |
|
March 31 |
|
8.49 |
|
|
5.45 |
|
Nasdaq:
|
|
ANY shares
NASDAQ |
|
|
|
(in US$) |
|
|
|
High |
|
|
Low |
|
Annual information for
2014 |
|
|
|
|
|
|
2014 (from
July 8, 2014) |
|
10.00 |
|
|
5.21 |
|
2014, quarter ended
|
|
|
|
|
|
|
December 31
|
|
9.50 |
|
|
5.21 |
|
September 30 (from July 8, 2014) |
|
10.00 |
|
|
6.15 |
|
2015, quarter ended |
|
|
|
|
|
|
December 31 (through October 5, 2015) |
|
2.72 |
|
|
2.05 |
|
September
30 |
|
5.71 |
|
|
1.99 |
|
June 30 |
|
5.17 |
|
|
3.14 |
|
March 31
|
|
7.13 |
|
|
3.47 |
|
Monthly information for
the most recent six months |
|
|
|
|
|
|
April 2015
|
|
4.27 |
|
|
3.14 |
|
May 2015 |
|
4.22 |
|
|
3.32 |
|
June 2015
|
|
5.17 |
|
|
3.66 |
|
July 2015 |
|
5.71 |
|
|
4.95 |
|
August 2015
|
|
4.86 |
|
|
2.71 |
|
September 2015 |
|
2.68 |
|
|
1.99 |
|
S-16
Fluctuations in the exchange rate between the Canadian dollar
and the U.S. dollar will affect any comparisons of our common shares traded on
the TSXV and our common shares traded on the Nasdaq.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
We are a corporation governed by the Business Corporations Act
(Ontario) and by the applicable federal laws of Canada. Certain of our directors
and officers and some of the experts named in this prospectus reside outside the
United States and a majority of their assets are located outside the United
States. It may not be possible for you to effect service of process within the
United States on these persons. Furthermore, it may not be possible for you to
enforce against us or them, in the United States, judgments obtained in United
States courts, because a significant portion of our assets and the assets of
these persons are located outside the United States.
There is doubt as to the enforceability, in original actions in
Canadian courts, of liabilities based on the United States federal securities
laws or blue sky laws of any state within the United States and as to the
enforceability in Canadian courts of judgments of United States courts obtained
in actions based on the civil liability provisions of the United States federal
securities laws or any such state securities or blue sky laws such that the
enforcement in Canada of such liabilities and judgments is not certain.
Therefore, it may not be possible to enforce those judgments against us, our
directors and officers and some of the experts named in this prospectus.
OFFERING EXPENSES
The following table lists the costs and expenses payable us in
connection with the sale of the common shares covered by this prospectus other
than any sales commissions or discounts, which expenses will be paid by the
selling shareholders. The estimates do not include expenses related to offerings
of particular securities. Each prospectus supplement describing an offering of
securities will reflect the estimated expenses related to the offering of
securities under that prospectus supplement. All amounts shown are estimates
except for the SEC registration fee.
SEC registration fee
|
$ |
822.80
|
|
Legal fees and expenses |
|
25,000 |
|
Accounting fees and expenses
|
|
5,000 |
|
Miscellaneous expenses |
|
5,000 |
|
Total |
$ |
35,822.50 |
|
S-17
SHARE CAPITAL
As of September 30, 2015, 41,011,718 common shares were issued
and outstanding, all of which have been duly approved and are registered on our
books. Our articles of amalgamation permit the issuance of an unlimited number
of common shares. All of the outstanding common shares are fully paid and
non-assessable. Within the past five years, more than 10% of our capital stock
has been paid for with assets other than cash.
Our articles of amalgamation and Registration Statement on Form
8-A describe the rights attached to our common shares more fully. These
documents are filed as exhibits to the registration statement of which this
prospectus forms a part or are incorporated by reference. See the section
entitled Where You Can Find Additional Information on page 1.
Nasdaq Stock Market Marketplace Rules permit Nasdaq-listed
companies that are foreign private issuers to follow home country practices in
lieu of the corporate governance provisions specified by the Nasdaq with limited
exceptions. While we intend to comply with most of these rules, we plan to
follow home country rules with respect to shareholder approval requirements for
the issuance of securities in lieu of following Nasdaq's shareholder approval
requirements under Nasdaq Listing Rule 5635. Other than with respect to certain
actions, including consummation of amalgamations (mergers), plans of
arrangement, and certain related party transactions, the Business Corporations
Act (Ontario) and applicable Canadian securities legislation generally do not
require that shareholders approve the issuance of securities. As a result of
this election or if in the future we elect to follow other home country
practices, shareholders may be afforded less protection than they otherwise
would have under the Nasdaq corporate listing standards applicable to U.S.
domestic issuers.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Business Corporations Act (Ontario), we may indemnify
a director or officer, a former director or officer or another individual who
acts or acted at our request as a director or officer, or an individual acting
in a similar capacity, of another entity, against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
reasonably incurred by the individual in respect of any civil, criminal,
administrative, investigative or other proceeding in which the individual is
involved because of that association with us or another entity on condition that
(i) the individual acted honestly and in good faith with a view to our best
interests or, as the case may be, to the best interests of the other entity for
which the individual acted as a director or officer or in a similar capacity at
our request, and (ii) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the individual also had
reasonable grounds for believing that his or her conduct was lawful. Further, we
may, with court approval, indemnify an individual described above in respect of
an action by or on our behalf or other entity to obtain a judgment in its favor,
to which the individual is made a party because of the individuals association
with us or another entity, against all costs, charges and expenses reasonably
incurred by the individual in connection with such action if the individual
fulfills condition (i) above. An individual as described above is entitled as a
matter of right to indemnification from us in respect of all costs, charges and
expenses reasonably incurred by such individual in connection with the defense
of any civil, criminal, administrative, investigative or other proceedings to
which such individual is subject if he or she was not judged by a court or other
competent authority to have committed any fault or omitted to do anything that
he or she ought to have done, and has fulfilled conditions (i) and (ii) above.
In accordance with the Business Corporations Act (Ontario), we
have agreed to indemnify each of our directors and officers against all costs,
charges and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect of any civil, criminal,
administrative action or proceeding in which such individual is involved by
reason of his association with us or another entity if he acted honestly and in
good faith with a view to our best interests or such other entity, and he had
reasonable grounds for believing that his conduct was lawful.
We maintain a policy of directors and officers liability
insurance, which insures directors and officers for losses as a result of claims
against our directors and officers in their capacity as directors and officers
and also reimburses us for payments made pursuant to the indemnity provisions
under our bylaws and the Business Corporations Act (Ontario).
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion
of the SEC such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
S-18
LEGAL MATTERS
The validity of the common shares offered hereby will be passed
upon for us by Stikeman Elliot LLP, 1155 René-Lévesque Blvd. West, 40th Floor,
Montréal, QC H3B 3V2.
S-19
EXPERTS
Moss Adams LLP, 4747 Executive Drive, Suite 1300, San Diego, CA
92121, an independent registered public accounting firm, has audited our
consolidated financial statements as of December 31, 2014, and for the year then
ended, included in our Annual Report on Form 40-F for the year ended December
31, 2014, as set forth in its report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement of which this prospectus
forms a part. Further, Moss Adams has audited the consolidated financial
statements of Overland Storage, Inc., as of June 30, 2014 and 2013, and for the
years then ended, included in our Form F-4, as set forth in its report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement of which this prospectus forms a part. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
Collins Barrow Toronto LLP, Collins Barrow Place 11 King Street
West, Suite 700 Toronto, Ontario M5H 4C7, a licensed public accounting firm, has
audited our consolidated financial statements at December 31, 2013 and for the
year ended December 31, 2013 included in our Annual Report on Form 40-F for the
year ended December 31, 2014, as set forth in its report, which is incorporated
by reference in this prospectus and elsewhere in the registration statement of
which this prospectus forms a part. Further, Collins Barrow has audited our
consolidated balance sheets, as of December 31, 2013 and 2012, and the related
consolidated statements of operations, equity and comprehensive income (loss),
and cash flows for the fiscal years ended December 31, 2013 and 2012 included in
our Form F-4, as set forth in its report, which is incorporated by reference in
this prospectus and elsewhere in the registration statement of which this
prospectus forms a part. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
RSM Deutschland GmbH Wirtschaftsprüfungsgesellschaft,
Friedrichstrasse 188, D-10117 Berlin, has audited the consolidated balance
sheets of the Tandberg Companies, as of December 31, 2013 and 2012, and the
related audited consolidated statements of operations, equity and comprehensive
income (loss), and cash flows for the years ended December 31, 2013 and 2012
included in our Form F-4, as set forth in its report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement of
which this prospectus forms a part. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
S-20
The information in this prospectus is
not complete and may be changed. The selling shareholders may not sell these
securities pursuant to this prospectus until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities, and the selling shareholders are not
soliciting offers to buy these securities in any state where the offer or sale
of these securities is not permitted.
SUBJECT TO COMPLETION, DATED October 9,
2015
PROSPECTUS
1,779,126 Common Shares
______________________________________
This prospectus relates to the resale or other disposition by
certain selling shareholders identified in this prospectus, or their
transferees, of up to an aggregate of 1,779,126 common shares comprised of (i)
1,529,126 outstanding common shares issued pursuant to the terms of the Asset
Purchase Agreement, dated as of August 10, 2015, by and among Imation Corp., a
Delaware corporation, on the one hand, and Overland Storage, Inc., a California
corporation and wholly-owned subsidiary of ours, and us, on the other hand, and
(ii) up to 250,000 common shares issuable pursuant to the terms of an
outstanding warrant issued in connection with the Asset Purchase Agreement, if
and to the extent that, the aggregate proceeds received by the selling
shareholder from the sale of the 1,529,126 common shares is less than
approximately $6.3 million.
The selling shareholders may, from time to time, sell,
transfer, or otherwise dispose of any or all of their common shares on any stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These dispositions may be at fixed prices, at prevailing
market prices at the time of sale, at prices related to the prevailing market
price, at varying prices determined at the time of sale, or at negotiated
prices. See Plan of Distribution for additional information.
We are not offering any common shares for sale under this
prospectus, and we will not receive any of the cash proceeds from the sale or
other disposition of the common shares covered hereby. However, the warrant
entitles the holder to purchase our common shares at an exercise price of $0.01
per common share, and we will receive the exercise price of any warrants
exercised for cash. In addition, Imation may be required to provide us with
additional inventory pursuant to the terms of the Asset Purchase Agreement, if,
for a value equal to, and to the extent that, the aggregate proceeds received by
the selling shareholder from the sale of the 1,529,126 common shares exceeds
approximately $7 million.
Our common shares are traded on The Nasdaq Global Market under
the symbol ANY. On October 5, 2015, the last reported sale price for our
common shares on Nasdaq was $2.69 per share.
We will pay the expenses related to the registration of the
common shares covered by this prospectus. The selling shareholders will pay any
commissions and selling expenses they may incur.
______________________________________
Our business and an investment in our securities involve
significant risks. You should read the section entitled "Risk
Factors" on page 5 of this prospectus and the risk factors
incorporated by reference into this prospectus as described in that section
before investing in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
______________________________________
The date of this prospectus is
TABLE OF CONTENTS
-i-
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form F-3
that we filed with the Securities and Exchange Commission using a shelf
registration or continuous offering process.
You should read this prospectus, the information and documents
incorporated by reference, and the additional information described under the
heading Where You Can Find Additional Information below carefully because
these documents contain important information you should consider when making
your investment decision. Whenever we make reference in this prospectus to any
of our contracts, agreements or other documents, the references are not
necessarily complete and you should refer to the exhibits attached to the
registration statement or the documents incorporated by reference for copies of
the actual contract, agreements or other document. See Where You Can Find More
Information and Information Incorporated by Reference.
You should rely only on the information provided in this
prospectus and the information and documents incorporated by reference into this
prospectus. We have not, and the selling shareholders have not, authorized
anyone to provide you with different information. This prospectus is not an
offer to sell these securities, and the selling shareholders are not soliciting
offers to buy these securities, in any state where the offer or sale of these
securities is not permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common shares. You should not
assume that the information contained in this prospectus is accurate as of any
date other than the date on the front cover of this prospectus, or that the
information contained in any document incorporated by reference is accurate as
of any date other than the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus or any sale of a security.
In this prospectus, unless otherwise indicated or the context
otherwise requires, references to Sphere, we, company, us, or our
refer to Sphere 3D Corp. and its consolidated subsidiaries, and references to
selling shareholders refer to those shareholders listed herein under Selling
Shareholders, and their transferees.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, applicable to foreign private
issuers. We anticipate filing with the SEC, within three months after the end of
each fiscal year, an Annual Report on Form 40-F containing financial statements
audited by an independent accounting firm. We also file with the SEC Reports of
Foreign Private Issuer on Form 6-K and other information with the SEC as
required by the Exchange Act. We, as a foreign private issuer, are exempt from
the rules under the Exchange Act prescribing certain disclosure and procedural
requirements for proxy solicitations, and our officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery
provisions contained in Section 16 of the Exchange Act, with respect to their
purchases and sales of shares. In addition, we are not required to file annual,
quarterly and current reports and financial statements with the SEC as
frequently or as promptly as U.S. companies whose securities are registered
under the Exchange Act. You can find, copy and inspect information we file with
the SEC (including exhibits to such documents) at the SECs Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain additional
information about the Public Reference Room by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains a site on the Internet at
http://www.sec.gov which contains reports and other information that we file
electronically with the SEC. You may also review such reports and other
documents we file with the SEC on our website at http://www.sphere3d.com.
Information included on our website is not a part of this prospectus. This
prospectus is part of a registration statement that we filed with the SEC. The
registration statement contains more information than this prospectus regarding
our common shares and us, including exhibits.
-1-
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference information into this
prospectus. This means that we are disclosing important information to you by
referring you to another document that has been separately filed with or
furnished to the SEC. The information incorporated by reference is considered to
be part of this prospectus, and certain information that we later file with or
furnish to the SEC will automatically update and supersede the information
contained in documents earlier filed with or furnished to the SEC or contained
in this prospectus. The following documents filed with or furnished to the SEC
are incorporated herein by reference:
|
|
Our Annual Report on Form 40-F (File No. 001-36532) filed
with the SEC on March 31, 2015; |
|
|
|
|
|
The description of our common shares contained in our
Registration Statement on Form 8-A (File No. 001-36532) filed with the
Commission on July 7, 2014 pursuant to Section 12 of the Exchange Act, and
any other amendment or report filed for the purpose of updating such
description; |
|
|
|
|
|
The audited consolidated balance sheets of our company
and subsidiaries as of December 31, 2013 and 2012, and the related audited
consolidated statements of operations, equity and comprehensive income
(loss), and cash flows for the years ended December 31, 2013 and 2012; the
consolidated audited balance sheets of Overland Storage, Inc. and
subsidiaries as of June 30, 2014 and 2013, and the related audited
consolidated statements of operations, equity and comprehensive income
(loss), and cash flows for the fiscal years ended June 30, 2014 and 2013;
the audited consolidated balance sheets of Tandberg Data S.à r.l. and
subsidiaries as of December 31, 2013 and 2012, and the related audited
consolidated statements of operations, equity and comprehensive income
(loss), and cash flows for the years ended December 31, 2013 and 2012; the
unaudited pro forma condensed combined financial information of our
company, the Overland companies and the Tandberg companies giving effect
to the acquisition of the Overland companies and derived from the
historical consolidated financial statements and notes thereto of our
companies; the description of the terms of our merger with Overland
Storage, Inc., together with Annex A; and the description of the rights of
our shareholders contained in our Registration Statement on Form F-4 (File
No. 333- 197569) filed with the SEC on July 23, 2014, as subsequently
amended; |
|
|
|
|
|
Our Reports of Foreign Private Issuer on Form 6-K (File
No. 001-36532) furnished to the SEC on April 1, 2015, May 15, 2015, July
31, 2015, August 13, 2015, August 14, 2015, September 15, 2015, and
October 7, 2015; and |
|
|
|
|
|
All Annual Reports on Form 40-F and all Reports of
Foreign Private Issuer on Form 6-K (or portions thereof) that indicate
that they are being incorporated by reference into this registration
statement and that we file with the SEC on or after the date on which the
registration statement is first filed with the SEC until the termination
or completion of the offering under this prospectus.
|
Unless otherwise identified, documents or information deemed to
have been furnished and not filed in accordance with SEC rules shall not be
deemed incorporated by reference into this registration statement. We may
incorporate future Reports of Foreign Private Issuer on Form 6-K (or portions
thereof) that we furnish subsequent to the date of this prospectus by indicating
in such Form 6-K (or portions thereof) that they are being incorporated by
reference into this prospectus.
Any statement contained herein or in a document, all or a
portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or amended, to
constitute a part of this registration statement.
You may obtain copies, without charge, of documents
incorporated by reference in this prospectus, by requesting them in writing or
by telephone from us as follows:
Sphere 3D Corp.
240 Matheson Blvd. East
Mississauga,
Ontario L4Z 1X1
Attention: Investor Relations
(800) 729-8725
Exhibits to the filings will not be sent unless those exhibits
have been specifically incorporated by reference in this prospectus.
-2-
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus, any prospectus
supplement and the documents we incorporate by reference in this prospectus or
any prospectus supplement constitute forward-looking information that involves
risks and uncertainties. This forward-looking information includes, but is not
limited to, statements with respect to managements expectations regarding our
future growth and business plans, business planning process, results of
operations, uses of cash, performance, and business prospects. This
forward-looking information may also include other statements that are
predictive in nature, or that depend upon or refer to future events or
conditions. Statements with the words could, expects, may, will,
anticipates, assumes, intends, plans, believes, estimates,
guidance and similar expressions are intended to identify statements
containing forward-looking information, although not all forward-looking
statements include such words. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances contain forward-looking information. Statements containing
forward-looking information are not historical facts but instead represent
managements expectations, estimates and projections regarding future events.
Although management believes the expectations reflected in such
forward-looking statements are reasonable, forward-looking statements are based
on the opinions, assumptions 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. These factors include,
but are not limited to: our limited operating history; our ability to manage
growth; our ability to integrate the businesses of Overland Storage, Inc. and V3
Systems, Inc.; the impact of competition; the investment in technological
innovation; any defects in components or design of our products; the retention
or maintenance of key personnel; the possibility of significant fluctuations in
operating results; currency fluctuations; our ability to maintain business
relationships; financial, political or economic conditions; financing risks;
future acquisitions; our ability to protect our intellectual property; third
party intellectual property rights; volatility in the market price for our
common shares; our compliance with financial reporting and other requirements as
a public company; conflicts of interests; future sales of our common shares by
our directors, officers and other shareholders; dilution and future sales of
common shares; acquisition-related risks and other factors described under the
heading Risk Factors.
In addition, if any of the assumptions or estimates made by
management prove to be incorrect, actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the
forward-looking information. Accordingly, investors are cautioned not to place
undue reliance on such statements.
All of this forward-looking information is qualified by these
cautionary statements. Statements containing forward-looking information are
made only as of the date of such document. We expressly disclaims any obligation
to update or alter statements containing any forward-looking information, or the
factors or assumptions underlying them, whether as a result of new information,
future events or otherwise, except as required by law.
-3-
PROSPECTUS SUMMARY
The following is only a summary and therefore does not contain
all of the information you should consider before investing in our securities.
We urge you to read this entire prospectus, including the matters discussed
under Risk Factors and the risk factors incorporated by reference into this
prospectus as described in that section, and the more detailed consolidated
financial statements, notes to the consolidated financial statements and other
information incorporated by reference from our other filings with the SEC.
Our Company
We are a virtualization technology and data management
solutions provider with a portfolio of products that address the complete data
continuum. We enable the integration of virtual applications, virtual desktops,
and storage into workflow, and allows organizations to deploy a combination of
public, private or hybrid cloud strategies. We achieve this through the sale of
solutions that are derived from its primary product groups: disk systems,
virtualization, and data management and storage.
We have a global presence and maintain offices in multiple
locations. Executive offices and our primary operations are conducted from our
San Jose and San Diego, California locations. Our main office is located at 9112
Spectrum Center Blvd., San Diego, CA 92123. Our virtualization product
development is primarily done from its research and development center near
Toronto, Canada. Our European headquarters are located in Germany. We maintain
additional offices in Singapore, Japan, and the United Kingdom.
We were incorporated on May 2, 2007 under the Business
Corporations Act (Ontario) as T.B. Mining Ventures Inc.. Our principal
executive offices are located 240 Matheson Blvd. East Mississauga, Ontario L4Z
1X1 and our main telephone number is (858) 571-5555. Our Internet address is
http://www.sphere3d.com. Except for the documents referred to under
Where You Can Find Additional Information which are specifically incorporated
by reference into this prospectus, information contained on our website or that
can be accessed through our website does not constitute a part of this
prospectus. We have included our website address only as an interactive textual
reference and do not intend it to be an active link to our website.
The Offering
Common shares offered by the selling shareholders |
1,779,126 shares, comprised of (i) 1,529,126 issued and
outstanding common shares and (ii) up to 250,000 common shares issuable
pursuant to an outstanding warrant. |
|
|
|
|
Common shares to be outstanding after the offering:
|
41,261,718(1) |
|
|
|
|
Nasdaq Global Market symbol: |
ANY |
|
|
|
|
Use of proceeds: |
We will not receive any of the proceeds from the sale or
other disposition of the common shares offered hereby. However, we will
receive the exercise price of any warrants exercised for cash. |
|
|
|
|
Risk factors: |
See Risk Factors beginning on page 5 and the risk
factors incorporated by reference into this prospectus as described in
that section, and the other information included in this prospectus or
incorporated by reference for a discussion of factors you should consider
before making an investment decision |
(1) |
The number of common shares shown to be outstanding is
based on the number of common shares outstanding as of September 30, 2015,
and includes common shares issuable upon exercise of the warrant issued
pursuant to the Asset Purchase Agreement. The number does not include (i)
common shares issuable or reserved for issuance upon the exercise of other
outstanding warrants or options granted or available under our equity
compensation plans or (ii) the 345,000 common shares or 86,250 common
shares issuable upon exercise of certain warrants we expect to issue upon
the closing of a registered direct placement on or about October 13, 2015.
At our June 2015 annual meeting of our shareholders, the shareholders
ratified the adoption of our 2015 Performance Incentive Plan, initially
authorizing the award of up to a maximum of 8,790,315 common shares
pursuant to the plan, as well as our Employee Stock Purchase Plan,
authorizing the purchase by employees of up to 2,000,000 common shares
under the plan. |
Recent Developments
Unaudited Interim Cash Positions and Indebtedness
As of September 30, 2015, we had
approximately $5.0 million in cash and cash equivalents, a principal balance of
$5.0 million outstanding under our revolving credit agreement, a principal
balance of $5.3 million outstanding under our amended and restated loan and
security agreement, and an outstanding balance of $19.5 million under our
convertible debenture.
Registered Direct Sales
On September 28, 2015, we closed on the
issuance and sale of, in the aggregate, 1,072,961 of our common shares, warrants
exercisable to purchase up to 268,240 common shares, adjustment warrants which
may, in certain circumstances, become exercisable to purchase a number of common
shares to be determined at such time (if any) as such adjustment warrants become
exercisable following an additional financing by us prior to December 31, 2015,
for an aggregate offering price of approximately U.S.$3.3 million. Each of these
warrants has an initial exercise price of U.S.$2.33 per warrant share. The
warrants are immediately exercisable and have a five year term. Each adjustment
warrant has an initial exercise price of U.S.$0.01 per common share. The
adjustment warrants will become exercisable only if we complete an additional
financing prior to December 31, 2015 under the circumstances described below in
the section entitled Risk Factors beginning on page 6, and, in the event they
become exercisable, will expire on March 31, 2016. We expect to close on the
issuance and sale of an additional 345,000 common shares, warrants to purchase
86,250 common shares, and adjustment warrants on or about October 13, 2015.
Restricted Share Issuances
At our June 2015 Annual and Special
Meeting of Shareholders, the shareholders approved the adoption of our 2015
Performance Incentive Plan, initially authorizing the award of up to a maximum
of 8,790,315 common shares pursuant to the plan, as well as approved our
Employee Stock Purchase Plan, authorizing the purchase of up to 2,000,000 common
shares by employees under the plan. On August 26, 2015, our Compensation
Committee granted to certain executive officers awards of, in aggregate, 1.9
million restricted stock units and 0.5 million of non-qualified stock options.
The restricted stock units vest and are payable over a period of approximately
2.5 years. On August 31, 2015, the non-qualified stock options vested 22.22% and
the remainder vests in a series of equal monthly amounts over 2.3 years.
V3 Litigation
In April 2015, we filed a proof of claim in connection with bankruptcy proceedings of V3 Systems, Inc. (“V3”) based on breaches by V3 of the Asset Purchase Agreement entered into between V3 and us dated February 11, 2014 (the “APA”). On October 6, 2015, US Dissolution Liquidating Trust, the apparent successor to V3, filed a complaint against us and certain of our current and former directors in the United States Bankruptcy Court for the District of Utah Central Division objecting to our proof of claim and asserting claims for affirmative relief against us and our directors. This complaint alleges, among other things, that Sphere breached the APA and engaged in securities fraud in connection with the issuance of the common shares issued to V3 in connection therewith. The plaintiff claims that the alleged breaches and certain other actions and/or omissions on the part of Sphere and its directors resulted in V3’s failure to receive earn-out consideration under the APA and caused V3 to be unable to timely sell the Sphere common shares received by V3 pursuant to the APA and, as a result, V3 defaulted on several debts, ultimately leading to its bankruptcy. The plaintiff seeks, among other things, monetary damages for the loss of the potential earn-out consideration, the value of the common shares held back by us pursuant to the APA and costs and fees. We believe the lawsuit to be without merit and intend to vigorously defend against the action.
Settlement of Merger Litigation
On October 2, 2015, the court in the
previously disclosed consolidated action relating to our merger with Overland
Storage, Inc. approved the terms of the class action settlement and the merger
litigation was dismissed with prejudice and terminated on that date. The
consolidated action had alleged breaches of fiduciary duties and conflicts of
interest against Overlands directors relating to the merger process, the terms
of the merger agreement, and the consideration to be received by Overlands
shareholders under the terms of the merger agreement. On June 26, 2015, the
court had preliminarily approved the proposed settlement under a memorandum of
understanding and stipulation of settlement entered into between plaintiffs and
defendants. The memorandum of understanding provided, among other things, for
the inclusion of supplemental disclosures in Amendment No. 2 to the Registration
Statement on Form F-4 that was filed with the Securities and Exchange Commission
on October 14, 2014.
-4-
RISK FACTORS
An investment in our securities involves a high degree of
risk. In addition to the other information included in this prospectus, you
should carefully consider the risk factors set forth in our most recent Annual
Report on Form 40-F on file with the SEC, which is incorporated by reference
into this prospectus, as well as the following risk factors, which supplement or
augment the risk factors set forth in our Annual Report on Form 40-F. Before
making an investment decision, you should carefully consider these risks as well
as other information we include or incorporate by reference in this prospectus
and the accompanying prospectus supplement. The risks and uncertainties not
presently known to us or that we currently deem immaterial may also materially
harm our business, operating results and financial condition and could result in
a complete loss of your investment.
Risks Related to Our Common Shares and this Offering
Our share price has been volatile and your investment in
our common shares could decrease in value.
The market price for securities of
technology companies, including ours, historically has been highly volatile, and
the market from time to time has experienced significant price and volume
fluctuations that are unrelated to the operating performance of such companies.
For example, during the 12-month period ended September 30, 2015, our closing
share price on The NASDAQ Global Market has ranged from a low of $1.99 to a high
of $9.50. Fluctuations in the market price or liquidity of our common shares may
harm the value of your investment in our common shares. You may not be able to
resell your common shares at or above the price you pay for those shares due to
fluctuations in the market price caused by changes in our operating performance
or prospects and other factors, including, among others:
|
|
actual or anticipated fluctuations in our
operating results or future prospects; |
|
|
|
|
|
our announcements or our competitors
announcements of new products; |
|
|
|
|
|
public reaction to our press releases, our
other public announcements and our filings with the SEC; |
|
|
|
|
|
strategic actions by us or our competitors;
|
|
|
|
|
|
changes in financial markets or general
economic conditions; |
|
|
|
|
|
our ability to raise additional capital as
needed; |
|
|
|
|
|
developments regarding our patents or
proprietary rights or those of our competitors; and |
|
|
|
|
|
changes in stock market analyst recommendations
or earnings estimates regarding our common shares, other comparable
companies or our industry generally. |
Future sales of our common shares could adversely affect
the market price and our future capital-raising activities could involve the
issuance of equity securities, which would dilute your investment and could
result in a decline in the trading price of our common shares.
We may sell securities in the public or private equity markets
if and when conditions are favorable, even if we do not have an immediate need
for additional capital at that time. Sales of substantial amounts of common
shares, or the perception that such sales could occur, could adversely affect
the prevailing market price of our common shares and our ability to raise
capital. We may issue additional common shares in future financing transactions
or as incentive compensation for our executive management and other key
personnel, consultants and advisors. Issuing any equity securities would be
dilutive to the equity interests represented by our then-outstanding common
shares. The market price for our common shares could decrease as the market
takes into account the dilutive effect of any of these issuances.
Sales of shares issued in recent placements may cause the
market price of our shares to decline.
We have recently closed private placements and issued common
shares and warrants exercisable to purchase our common shares. Further, we have
agreed to register with the SEC the common shares issued in these offerings and
issuable upon exercise of the warrant for resale. Upon the effectiveness of the
registration statements for these offerings, the common shares issued in the
offerings and issuable upon exercise of the warrants may be freely sold in the
open market. The sale of a significant amount of these common shares in the open
market, or the perception that these sales may occur, could cause the market
price of our common shares to decline or become highly volatile.
Future sales of our common shares under certain
circumstances will trigger price-protection provisions in certain of private
placement agreements, outstanding warrants and adjustment warrants, which would
dilute your investment and could result in a decline in the trading price of our
common shares.
If, at any time until December 31, 2015,
we complete an equity financing involving the issuance and sale of our common
shares and related additional warrants at a price per common share that is lower
than $2.33, then (a) the initial exercise price for the warrants we issued in
our recent registered direct financings will be adjusted to equal the exercise
price of such additional warrants (if lower) as of the date of the consummation
of their sale and (b) if the warrant coverage in such financing is greater than
25%, the number of common shares issuable upon exercise of the warrants issued
in our recent registered direct financings will be increased to the product
obtained by multiplying the number of common shares issuable upon exercise of
these warrants immediately prior to the adjustment by, the quotient obtained by
dividing: (x) the number of common shares issuable upon exercise of the
additional warrants issued divided by the number of common shares issued in such
additional equity financing to the holders of the additional warrants; by (y)
the number of common shares issuable upon exercise of the warrants issued in our
recent registered direct financings immediately prior to the adjustment divided
by the number of common shares issued to the investor in our recent registered
direct financings (aggregated with common shares issuable to the warrant holder
pursuant to adjustable warrants) or (c) if the warrant coverage in such
financing is less than 25%, the number of common shares issuable upon exercise
of the warrants issued in our recent registered direct financings shall be
increased to 25% of the quotient obtained by dividing the aggregate purchase
price paid by the warrant holder by the per share purchase price in the
additional financing.
In addition, if, at any time until
December 31, 2015, we complete an equity financing involving the issuance and
sale of our common shares at a price per share that is lower than $2.33, then
the adjustment warrants we issued in our recent registered direct financings
shall become exercisable for that number of common shares equal to (i) the
number of common shares that the adjustment warrant holder would have received
for its aggregate investment amount in our recent registered direct financings
had the purchase price for one common share, a warrant and an adjustment warrant
been equal to the purchase price per share in such additional equity financing
minus (ii) the number of common shares actually purchased by such investor in
our recent registered direct financings.
Further, we have agreed to give the
investor in our August private placement additional common shares and adjust the
exercise price for the warrants issued to this investor if, in connection with
an equity capital raise for cash on or before December 31, 2015, we sell common
shares at a price per share that is lower than $2.33 per share or sell new
warrants to purchase common shares with an exercise price per share that is
lower than $2.33. The number of additional common shares the investor would
receive would equal the difference between (x) the number of shares that the
investor would have received had the Purchase Price been equal to the per share
purchase price at which common shares were issued in the additional equity
financing and (y) the aggregate number of common shares purchased by the
investor in the August private placement. The exercise price of the warrant
would be adjusted to equal the exercise price per share of the warrants issued
in the additional equity financing (if lower) as of the date of the consummation
of the additional equity financing.
-5-
We may have to pay liquidated damages to our investors,
which will increase our negative cash flows.
In connection with our recent private placements, we entered
into registration rights agreements. Under the terms of these registration
rights agreements, subject to certain limited exceptions, if registration
statements covering the shares issued or issuable pursuant to the warrants
issued in such placements have not been declared effective within the time
periods specified in the registration rights agreements or we otherwise fail to
comply with certain provisions set forth in the registration rights agreements,
then we will be required to pay liquidated damages. There can be no assurance
that the registration statements will be declared effective by the SEC or will
remain effective for the time periods necessary to avoid payment of liquidated
damages.
We do not expect to pay cash dividends on our common
shares for the foreseeable future.
We have never paid cash dividends on our common shares and do
not anticipate that any cash dividends will be paid on the common shares for the
foreseeable future. The payment of any cash dividend by us will be at the
discretion of our board of directors and will depend on, among other things, our
earnings, capital, regulatory requirements and financial condition.
We may not be able to maintain our listings on The NASDAQ
Global Market , or trading on this exchange may otherwise be halted or
suspended, which may make it more difficult for investors to sell our common
shares and consequently may negatively impact the price of our common shares.
Maintaining the listing of our common
shares on The NASDAQ Global Market requires that we comply with certain listing
requirements. If our common shares cease to be listed for trading on The NASDAQ
Global Market for any reason, it may harm our share price, increase the
volatility of our share price, decrease the level of trading activity and make
it more difficult for investors to buy or sell our common shares. Our failure to
maintain a listing on The NASDAQ Global Market may constitute an event of
default under our current and any future indebtedness, which would accelerate
the maturity date of such debt or trigger other obligations. In addition,
certain institutional investors that are not permitted to own securities of
non-listed companies may be required to sell their shares adversely affecting
the market price of our common shares. If we are not listed on The NASDAQ Global
Market or if our public float falls below $75 million or do not otherwise meet
the requirements for the use of Form F-3, we will be limited in our ability to
file new shelf registration statements on SEC Form F-3 and/or to fully use one
or more registration statements on SEC Form F-3. Any such limitations may harm
our ability to raise the capital we need.
Risks Related to Intellectual Property
Although we believe we have a proprietary platform for
our technologies and products, we or our customers may in the future become
subject to claims for infringement of intellectual property rights owned by
others. Further, to protect our own intellectual property rights, we may in the
future bring claims for infringement against others.
Our commercial success depends, in part, upon not infringing
intellectual property rights owned by others. Although we believe that we have a
proprietary platform for our technologies and products, we cannot determine with
certainty whether any existing third party patents or the issuance of any third
party patents would require us to alter our technology, obtain licenses or cease
certain activities. We may become subject to claims by third parties that our
technology infringes their intellectual property rights. While we provide our
customers with a qualified indemnity against the infringement of third party
intellectual property rights, we may become subject to these claims either
directly or through indemnities against these claims that we routinely provide
to our end-users and channel partners.
Further, our customers may use our products in ways that may
infringe the intellectual property rights of third parties and/or require a
license from third parties. Although we encourage our customers to use our
products only in a manner that does not infringe third party intellectual
property rights, and we know that most of our clients do so, we cannot guarantee
that such third parties will not seek remedies against us for providing products
that may enable our customers to infringe the intellectual property rights of
others. We would vigorously defend any such claims.
In addition, we may receive in the future, claims from third
parties asserting infringement, claims based on indemnities provided by us, and
other related claims. Litigation may be necessary to determine the scope,
enforceability and validity of third party proprietary or other rights, or to
establish our proprietary or other rights. Furthermore, despite precautions, it
may be possible for third parties to obtain and use our intellectual property
without our authorization. Policing unauthorized use of intellectual property is
difficult, and some foreign laws do not protect proprietary rights to the same
extent as the laws of Canada or the United States. To protect our intellectual
property, we may become involved in litigation. In addition, other companies may
initiate similar proceedings against us. The patent position of information
technology firms in particular is highly uncertain, involves complex legal and
factual questions, and continues to be the subject of much litigation. No
consistent policy has emerged from the U.S. Patent and Trademark Office or the
courts regarding the breadth of claims allowed or the degree of protection
afforded under information technology patents.
Some of our competitors have, or are affiliated with companies
having, substantially greater resources than us and these competitors may be
able to sustain the costs of complex intellectual property litigation to a
greater degree and for a longer period of time than us. Regardless of their
merit, any such claims could:
-6-
|
|
divert the attention of our management, cause
significant delays, materially disrupt the conduct of our business or
materially adversely affect our revenue, financial condition and results
of operations; |
|
|
be time consuming to evaluate and defend;
|
|
|
result in costly litigation and substantial
expenses; |
|
|
cause product shipment delays or stoppages;
|
|
|
subject us to significant liabilities; |
|
|
require us to enter into costly royalty or
licensing agreements; |
|
|
require us to modify or stop using the
infringing technology; or |
|
|
result in costs or other consequences that have
a material adverse effect on our business, results of operations and
financial condition. |
Risks Related to our Business
If we are unable to generate sufficient cash from
operations or raise additional financing, we may be unable to fund our
operations.
We require sufficient cash from operations together with cash
from debt, equity or equity based financing, including financing from this
offering, to fund our operations as currently conducted. Our available cash and
cash equivalents was $5.0 million and our outstanding indebtedness was $29.8
million as of September 30, 2015. Cash forecasts and capital requirements are
subject to change as a result of a variety of risks and uncertainties. Cash from
operations can change as a result of a variety of factors including changes in
sales levels, unexpected increases in product costs, increases in operating
costs, and changes to the historical timing of collecting accounts receivable.
In addition, we expect to continue to need raise debt, equity and equity-linked
financing in the near future, but such financing may not be available on
favorable terms on a timely basis or at all. If we are unable to generate
sufficient cash from operations or financing sources, we may be forced to make
further reductions in spending, extend payment terms with suppliers, liquidate
assets where possible and/or curtail, suspend or cease planned programs or
operations generally or possibly seek bankruptcy protection, which would have a
material adverse effect on our business, results of operations, financial
position and liquidity.
-7-
USE OF PROCEEDS
We will not receive any of the proceeds from the sale or other
disposition of the common shares offered hereby. However, the warrant entitles
the holder to purchase our common shares at an exercise price of $0.01 per
common share, and we will receive the exercise price of any warrants exercised
for cash. To the extent that we receive cash upon exercise of any warrants, we
expect to use that cash for general corporate purposes. In addition, Imation may
be required to provide us with additional inventory pursuant to the terms of the
Asset Purchase Agreement, if, for a value equal to, and to the extent that, the
aggregate proceeds received by the selling shareholder from the sale of the
1,529,126 common shares exceeds approximately $7 million.
SELLING SHAREHOLDERS
We have prepared this prospectus to allow the selling
shareholders or their donees, pledgees, transferees or other successors in
interest to sell or otherwise dispose of, from time to time, up to an aggregate
of 1,779,126 common shares issued pursuant to the Asset Purchase Agreement or
issuable by us to the selling shareholder pursuant to the terms of the warrant
we issued pursuant to the terms of the Asset Purchase Agreement. The table below
presents information regarding the selling shareholders, the common shares
beneficially owned prior to the private placement offering and the common shares
that they may sell or otherwise dispose of from time to time under this
prospectus.
We do not know when or in what amounts the selling shareholders
may sell or otherwise dispose of the common shares covered hereby. The selling
shareholders might not sell any or all of the shares covered by this prospectus
or may sell or dispose of some or all of the shares other than pursuant to this
prospectus. Because the selling shareholders may not sell or otherwise dispose
of some or all of the shares covered by this prospectus and because there are
currently no agreements, arrangements or understandings with respect to the sale
or other disposition of any of the shares, we cannot estimate the number of the
shares that will be held by the selling shareholders after completion of the
offering. However, for purposes of this table, we have assumed that all of the
common shares covered by this prospectus will be sold by the selling
shareholders.
|
|
|
|
|
Beneficial Ownership
(1) |
|
|
|
|
|
|
Number of |
|
|
Percent |
|
|
|
|
|
Number of |
|
|
Percent |
|
|
|
Shares |
|
|
of |
|
|
|
|
|
Shares |
|
|
of |
|
|
|
Beneficially |
|
|
Class |
|
|
Number of |
|
|
Beneficially |
|
|
Class |
|
|
|
Owned Prior |
|
|
Prior |
|
|
Shares |
|
|
Owned |
|
|
After |
|
Name of Selling |
|
to the |
|
|
to the |
|
|
Offered |
|
|
After this |
|
|
this |
|
Shareholder (2) |
|
Offering |
|
|
Offering |
|
|
Hereby (3) |
|
|
Offering |
|
|
Offering |
|
Imation Corp. (4) |
|
1,779,126 |
|
|
4.3% |
|
|
1,779,126 |
|
|
* |
|
|
* |
|
(1) |
Beneficial ownership is determined in accordance with
Section 13(d) of the Exchange Act and generally includes voting and
investment power with respect to securities and including any securities
that grant the selling shareholder the right to acquire common shares
within 60 days of September 30, 2015. Percentage ownership is based on
41,011,718 common shares issued and outstanding as of September 30, 2015 and
assuming full exercise of the warrant issued to the selling shareholder to
purchase up to 250,000 common shares. This amounts to a total of
41,261,718. |
|
|
(2) |
Unless otherwise indicated, this table is based on
information supplied to us by the selling shareholders and certain of our
records. |
|
|
(3) |
All 1,779,126 common shares offered pursuant to this
prospectus were acquired pursuant to our Asset Purchase Agreement with
Imation or are common shares we could be obligated to issue to the selling
shareholder pursuant to the terms of the warrant we issued pursuant to the
Asset Purchase Agreement. |
|
|
(4) |
The address for this selling shareholder is: 1 Imation
Way, Oakdale, MN 55128-3414. |
-8-
PLAN OF DISTRIBUTION
We are registering the common shares previously issued and
common shares that we could be obligated to issue to the selling shareholder
pursuant to the terms of the Asset Purchase Agreement and the warrant we
previously issued pursuant to the Asset Purchase Agreement to permit the resale
of such common shares by the selling shareholders. We will not receive any of
the proceeds from the sale by the selling shareholders of the common shares. We
will receive the exercise price of the warrant upon any exercise by payment of
cash. In addition, pursuant to the purchase price adjustment provisions of the
Asset Purchase Agreement, Imation may be required to deliver us additional
inventory acquired after the closing date of the Asset Purchase Agreement, if,
for a value equal to, and to the extent that, the aggregate proceeds received by
the selling shareholders exceeds a designated threshold, as discussed below. We
will bear all fees and expenses incident to our obligation to register the
common shares.
Pursuant to the terms of a Lock-Up Agreement, dated as of
August 10, 2015, by and between us and Imation Corp., or the Lock-up Agreement,
the selling shareholders are not permitted to offer, sell, contract to sell,
assign, transfer, hypothecate, pledge or grant a security interest in, or
otherwise dispose of the common shares registered pursuant to this prospectus,
or enter into any transaction which is designed to, or might reasonably be
expected to, have any such effect, directly or indirectly, or enter into any
swap, hedge or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of such common shares (any of the foregoing
actions, a transfer), or publicly disclose any intention to make any such
transfer; provided, however, that the selling shareholders are entitled to
transfer the common shares registered pursuant to this prospectus on the open
market or pursuant to block trades; provided, further, that without our prior
written consent, sales on the open market of the common shares registered
pursuant to this prospectus in the aggregate on any given trading day shall not
exceed 17.5% of the average daily trading volume of our common shares on Nasdaq
for the 30 trading days ending on the trading day immediately preceding such
date (and the selling shareholders shall not solicit any such transfer that is
not an open market sale), except that this limitation will not apply to block
trades by the selling shareholders; provided further, however, that without our
prior written consent, no transfer that is not on the open market (including,
without limitation, any block trades or trades pursuant to an exemption under
the Securities Act) is permitted unless the amount per common share received by
such selling shareholder in such transfer, prior to taking into account any
fees, expenses or selling discounts, concessions or commissions, equals at least
95% of the average of the closing prices for the common shares of the Company on
Nasdaq for each of the ten (10) consecutive complete trading days ending with
the third complete trading day prior to such transfer.
The selling shareholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling common shares or
interests in common shares received after the date of this prospectus from a
selling shareholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their common shares or interests in common shares on any stock exchange,
market or trading facility on which the shares are traded or in private
transactions, subject to certain limitations on transfers by the Lock-Up
Agreement. These dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated prices.
Subject to certain limitations imposed transfers by the Lock-up
Agreement, the selling shareholders may use any one or more of the following
methods when disposing of shares or interests therein:
|
|
ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers; |
|
|
|
|
|
block trades in which the broker-dealer will
attempt to sell the shares as agent, but may position and resell a portion
of the block as principal to facilitate the transaction; |
|
|
|
|
|
purchases by a broker-dealer as principal and
resale by the broker-dealer for its account; |
|
|
|
|
|
an exchange distribution in accordance with the
rules of the applicable exchange; |
|
|
|
|
|
privately negotiated transactions; |
|
|
|
|
|
short sales effected after the date the
registration statement of which this prospectus is a part is declared
effective by the SEC; |
|
|
|
|
|
through the writing or settlement of options or
other hedging transactions, whether through an options exchange or
otherwise; |
-9-
|
|
pursuant to a 10b5-1 plan or other trading
plan; |
|
|
|
|
|
broker-dealers may agree with the selling
shareholders to sell a specified number of such shares at a stipulated
price per share; |
|
|
|
|
|
a combination of any such methods of sale; and
|
|
|
|
|
|
any other method permitted by applicable law.
|
If the selling shareholders effect such transactions by selling
common shares to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling shareholders or
commissions from purchasers of the common shares for whom they may act as agent
or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). The selling
shareholders may, from time to time, pledge or grant a security interest in some
or all of the common shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the common shares, from time to time, under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending the list of selling shareholders to
include the pledgee, transferee or other successors in interest as selling
shareholders under this prospectus. The selling shareholders also may transfer
the common shares in other circumstances, in which case the transferees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
In connection with the sale of our common shares or interests
therein, the selling shareholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the common shares in the course of hedging the positions they
assume. The selling shareholders may also sell shares of our common shares short
and deliver these securities to close out their short positions, or loan or
pledge the common shares to broker-dealers that in turn may sell these
securities. The selling shareholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction). Any hedging transactions, short sales, option transactions,
derivative transactions, or any related transactions described above will,
however, be subject the limitations on transfers described in the Lock-up
Agreement.
The aggregate proceeds to the selling shareholders from the
sale of the common shares offered by them will be the aggregate purchase price
of the common shares less aggregate discounts or commissions, if any. Each of
the selling shareholders reserves the right to accept and, together with their
agents from time to time, to reject, in whole or in part, any proposed purchase
of common shares to be made directly or through agents. We will not receive any
of the proceeds from the sale by the selling shareholders of the common shares.
We will receive the exercise price of the warrant upon any exercise by payment
of cash. In addition, pursuant to the purchase price adjustment provisions of
the Asset Purchase Agreement, if the selling shareholders receive aggregate
consideration in excess of a designated threshold of approximately $7 million
(subject to adjustment based on final confirmation of net inventory at closing)
from the sale of the common shares issued to Imation at closing, Imation is
required to deliver to us an amount of inventory acquired by Imation after the
closing date of the Asset Purchase Agreement that is equal in value to such
excess amount. If the selling shareholders receive aggregate consideration from
the sale of shares issued to Imation at the closing date that is less than a
designated threshold of $6.3 million (subject to adjustment based on final
confirmation of net inventory at closing) prior to the expiration of the
warrant, then Imation may be entitled to receive proceeds from the sale of the
inventory in an amount equal to such shortfall, but not to exceed the value of
the inventory. We will bear all fees and expenses incident to our obligation to
register the common shares.
The selling shareholders also may resell all or a portion of
the shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided that they meet the criteria and conform to the
requirements of that rule and the Lock-up Agreement.
The selling shareholders and any underwriters, broker-dealers
or agents that participate in the sale of the common shares or interests therein
may be, underwriters within the meaning of Section 2(11) of the Securities
Act. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the Securities
Act. Selling shareholders who are underwriters within the meaning of Section
2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act.
-10-
To the extent required, the common shares to be sold, the names
of the selling shareholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if
applicable, the common shares may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the
common shares may not be sold unless it has been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.
We have advised the selling shareholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of shares in the market and to the activities of the selling shareholders
and their affiliates. In addition, to the extent applicable we will make copies
of this prospectus (as it may be supplemented or amended from time to time)
available to the selling shareholders for the purpose of satisfying the
prospectus delivery requirements of the Securities Act. The selling shareholders
may indemnify any broker-dealer that participates in transactions involving the
sale of the shares against certain liabilities, including liabilities arising
under the Securities Act.
We have agreed to indemnify the selling shareholders against
liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.
We have agreed with the selling shareholders to keep the
registration statement of which this prospectus constitutes a part effective
until the earlier of (i) such time as all of the shares covered by this
prospectus have been disposed of pursuant to and in accordance with the
registration statement or (ii) the date on which the shares may be sold without
restriction pursuant to Rule 144 of the Securities Act.
-11-
CAPITALIZATION AND INDEBTEDNESS
The table below sets forth our capitalization and indebtedness
as of June 30, 2015, on an actual basis(1). You should read this table in
conjunction with our consolidated financial statements and the related notes
included in our Annual Report on Form 40-F, which is incorporated by reference
herein.
|
|
As of June 30, 2015 |
|
|
|
(in thousands of
US$) |
|
Shareholders Equity |
|
|
|
Common Shares |
$ |
114,976 |
|
Accumulated Deficit |
|
(37,954 |
) |
Accumulated Other Comprehensive Loss
|
|
(1,489 |
) |
|
|
|
|
Total
Shareholders Equity |
$ |
75,533 |
|
|
|
|
|
Total Capitalization |
$ |
46,082 |
|
|
|
As of June 30, 2015 |
|
|
|
(in thousands of
US$) |
|
|
|
|
|
Revolving Credit Agreement |
$ |
5,000 |
|
Amended and Restated Loan and Security
Agreement |
|
4,951 |
|
Convertible Debenture (Long Term) |
|
19,500 |
|
|
|
|
|
Total Indebtedness |
$ |
29,451 |
|
(1) |
Subsequent to June 30, 2015, an aggregate of 3,721,879
common shares were issued pursuant to (i) the exercise of warrants, (ii)
restricted share issuance releases, (ii) the asset purchase agreement we entered
into with Imation Corp., (iii) the purchase agreement we entered into with an
investor on August 10, 2015, as amended, and (iv) the subscription agreement we
entered into with an investor on September 28, 2015.
|
-12-
PRICE RANGE OF OUR SHARES
On December 28, 2012, our common shares commenced trading on
the TSX Venture Exchange under the symbol ANY. On July 8, 2014, our common
shares commenced trading on the Nasdaq Global Market under the symbol ANY. On
December 10, 2014, we voluntarily delisted our common shares from the TSXV.
The tables below set forth, for the periods indicated, the per
share high and low closing sales prices for our common shares as reported on the
Nasdaq and the TSXV. TSXV closing prices of our common shares are presented in
Canadian dollars, and the Nasdaq closing prices of our common shares are
presented in U.S. dollars.
TSXV:
|
|
ANY shares TSXV |
|
|
|
(in C$) |
|
|
|
High |
|
|
Low |
|
Annual information for
2012, 2013, 2014 |
|
|
|
|
|
|
2012 (from December 28, 2012) |
|
0.80 |
|
|
0.74 |
|
2013 |
|
6.56 |
|
|
0.45 |
|
2014 (through December 10, 2014) |
|
11.15 |
|
|
5.45 |
|
Quarterly information for
the past two fiscal years and subsequent quarters: |
|
|
|
|
|
|
2013, quarter ended
|
|
|
|
|
|
|
December 31 |
|
6.56 |
|
|
2.70 |
|
September 30 |
|
2.88 |
|
|
0.50 |
|
June 30 |
|
0.73 |
|
|
0.45 |
|
March 31 |
|
0.85 |
|
|
0.53 |
|
2014, quarter ended
|
|
|
|
|
|
|
December 31 (through December 10, 2014) |
|
10.84 |
|
|
5.90 |
|
September 30 |
|
11.15 |
|
|
6.70 |
|
June 30 |
|
10.84 |
|
|
6.75 |
|
March 31 |
|
8.49 |
|
|
5.45 |
|
Nasdaq:
|
|
ANY shares
NASDAQ |
|
|
|
(in US$) |
|
|
|
High |
|
|
Low |
|
Annual information for
2014 |
|
|
|
|
|
|
2014 (from
July 8, 2014) |
|
10.00 |
|
|
5.21 |
|
2014, quarter ended
|
|
|
|
|
|
|
December 31
|
|
9.50 |
|
|
5.21 |
|
September 30 (from July 8, 2014) |
|
10.00 |
|
|
6.15 |
|
2015, quarter ended |
|
|
|
|
|
|
December 31 (through October 5, 2015) |
|
2.72 |
|
|
2.05 |
|
September 30 |
|
5.71 |
|
|
1.99 |
|
June 30 |
|
5.17 |
|
|
3.14 |
|
March 31 |
|
7.13 |
|
|
3.47 |
|
Monthly information for the most recent
six months |
|
|
|
|
|
|
April 2015 |
|
4.27 |
|
|
3.14 |
|
May 2015 |
|
4.22 |
|
|
3.32 |
|
June 2015 |
|
5.17 |
|
|
3.66 |
|
July 2015
|
|
5.71 |
|
|
4.95 |
|
August 2015 |
|
4.86 |
|
|
2.71 |
|
September 2015 |
|
2.68 |
|
|
1.99 |
|
-13-
Fluctuations in the exchange rate between the Canadian dollar
and the U.S. dollar will affect any comparisons of our common shares traded on
the TSXV and our common shares traded on the Nasdaq.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
We are a corporation governed by the Business Corporations Act
(Ontario) and by the applicable federal laws of Canada. Certain of our directors
and officers and some of the experts named in this prospectus reside outside the
United States and a majority of their assets are located outside the United
States. It may not be possible for you to effect service of process within the
United States on these persons. Furthermore, it may not be possible for you to
enforce against us or them, in the United States, judgments obtained in United
States courts, because a significant portion of our assets and the assets of
these persons are located outside the United States.
There is doubt as to the enforceability, in original actions in
Canadian courts, of liabilities based on the United States federal securities
laws or blue sky laws of any state within the United States and as to the
enforceability in Canadian courts of judgments of United States courts obtained
in actions based on the civil liability provisions of the United States federal
securities laws or any such state securities or blue sky laws such that the
enforcement in Canada of such liabilities and judgments is not certain.
Therefore, it may not be possible to enforce those judgments against us, our
directors and officers and some of the experts named in this prospectus.
OFFERING EXPENSES
The following table lists the costs and expenses payable us in
connection with the sale of the common shares covered by this prospectus other
than any sales commissions or discounts, which expenses will be paid by the
selling shareholders. The estimates do not include expenses related to offerings
of particular securities. Each prospectus supplement describing an offering of
securities will reflect the estimated expenses related to the offering of
securities under that prospectus supplement. All amounts shown are estimates
except for the SEC registration fee.
SEC registration fee
|
$ |
822.80
|
|
Legal fees and expenses |
|
25,000 |
|
Accounting fees and
expenses |
|
5,000 |
|
Miscellaneous expenses |
|
5,000 |
|
Total |
$ |
35,822.50 |
|
-14-
SHARE CAPITAL
As of September 30, 2015, 41,011,718 common shares were issued and
outstanding, all of which have been duly approved and are registered on our
books. Our articles of amalgamation permit the issuance of an unlimited number
of common shares. All of the outstanding common shares are fully paid and
non-assessable. Within the past five years, more than 10% of our capital stock
has been paid for with assets other than cash.
Our articles of amalgamation and Registration Statement on Form
8-A describe the rights attached to our common shares more fully. These
documents are filed as exhibits to the registration statement of which this
prospectus forms a part or are incorporated by reference. See the section
entitled Where You Can Find Additional Information on page 1.
Nasdaq Stock Market Marketplace Rules
permit Nasdaq-listed companies that are foreign private issuers to follow home
country practices in lieu of the corporate governance provisions specified by
the Nasdaq with limited exceptions. While we intend to comply with most of these
rules, we plan to follow home country rules with respect to shareholder approval
requirements for the issuance of securities in lieu of following Nasdaq's
shareholder approval requirements under Nasdaq Listing Rule 5635. Other than
with respect to certain actions, including consummation of amalgamations
(mergers), plans of arrangement, and certain related party transactions, the
Business Corporations Act (Ontario) and applicable Canadian securities
legislation generally do not require that shareholders approve the issuance of
securities. As a result of this election or if in the future we elect to follow
other home country practices, shareholders may be afforded less protection than
they otherwise would have under the Nasdaq corporate listing standards
applicable to U.S. domestic issuers.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Business Corporations Act (Ontario), we may indemnify
a director or officer, a former director or officer or another individual who
acts or acted at our request as a director or officer, or an individual acting
in a similar capacity, of another entity, against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
reasonably incurred by the individual in respect of any civil, criminal,
administrative, investigative or other proceeding in which the individual is
involved because of that association with us or another entity on condition that
(i) the individual acted honestly and in good faith with a view to our best
interests or, as the case may be, to the best interests of the other entity for
which the individual acted as a director or officer or in a similar capacity at
our request, and (ii) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the individual also had
reasonable grounds for believing that his or her conduct was lawful. Further, we
may, with court approval, indemnify an individual described above in respect of
an action by or on our behalf or other entity to obtain a judgment in its favor,
to which the individual is made a party because of the individuals association
with us or another entity, against all costs, charges and expenses reasonably
incurred by the individual in connection with such action if the individual
fulfills condition (i) above. An individual as described above is entitled as a
matter of right to indemnification from us in respect of all costs, charges and
expenses reasonably incurred by such individual in connection with the defense
of any civil, criminal, administrative, investigative or other proceedings to
which such individual is subject if he or she was not judged by a court or other
competent authority to have committed any fault or omitted to do anything that
he or she ought to have done, and has fulfilled conditions (i) and (ii) above.
In accordance with the Business Corporations Act (Ontario), we
have agreed to indemnify each of our directors and officers against all costs,
charges and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect of any civil, criminal,
administrative action or proceeding in which such individual is involved by
reason of his association with us or another entity if he acted honestly and in
good faith with a view to our best interests or such other entity, and he had
reasonable grounds for believing that his conduct was lawful.
We maintain a policy of directors and officers liability
insurance, which insures directors and officers for losses as a result of claims
against our directors and officers in their capacity as directors and officers
and also reimburses us for payments made pursuant to the indemnity provisions
under our bylaws and the Business Corporations Act (Ontario).
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion
of the SEC such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
LEGAL MATTERS
The validity of the common shares offered hereby will be passed
upon for us by Stikeman Elliot LLP, 1155 René-Lévesque Blvd. West, 40th Floor,
Montréal, QC H3B 3V2.
-15-
EXPERTS
Moss Adams LLP, 4747 Executive Drive, Suite 1300, San Diego, CA
92121, an independent registered public accounting firm, has audited our
consolidated financial statements as of December 31, 2014, and for the year then
ended, included in our Annual Report on Form 40-F for the year ended December
31, 2014, as set forth in its report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement of which this prospectus
forms a part. Further, Moss Adams has audited the consolidated financial
statements of Overland Storage, Inc., as of June 30, 2014 and 2013, and for the
years then ended, included in our Form F-4, as set forth in its report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement of which this prospectus forms a part. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
Collins Barrow Toronto LLP, Collins Barrow Place 11 King Street
West, Suite 700 Toronto, Ontario M5H 4C7, a licensed public accounting firm, has
audited our consolidated financial statements at December 31, 2013 and for the
year ended December 31, 2013 included in our Annual Report on Form 40-F for the
year ended December 31, 2014, as set forth in its report, which is incorporated
by reference in this prospectus and elsewhere in the registration statement of
which this prospectus forms a part. Further, Collins Barrow has audited our
consolidated balance sheets, as of December 31, 2013 and 2012, and the related
consolidated statements of operations, equity and comprehensive income (loss),
and cash flows for the fiscal years ended December 31, 2013 and 2012 included in
our Form F-4, as set forth in its report, which is incorporated by reference in
this prospectus and elsewhere in the registration statement of which this
prospectus forms a part. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
RSM Deutschland GmbH Wirtschaftsprüfungsgesellschaft,
Friedrichstrasse 188, D-10117 Berlin, has audited the consolidated balance
sheets of the Tandberg Companies, as of December 31, 2013 and 2012, and the
related audited consolidated statements of operations, equity and comprehensive
income (loss), and cash flows for the years ended December 31, 2013 and 2012
included in our Form F-4, as set forth in its report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement of
which this prospectus forms a part. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
-16-
Sphere 3D (NASDAQ:ANY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Sphere 3D (NASDAQ:ANY)
Historical Stock Chart
From Sep 2023 to Sep 2024