Sphere 3D Announces Registered Direct Equity Offering and Credit Facility for a Total of Approximately U.S. $10.76 Million
December 01 2015 - 9:02AM
Sphere 3D Corp. (Nasdaq:ANY) has entered into subscription
agreements for registered direct equity offerings of 2,880,000
Common Shares of the Company and warrants to purchase up to the
same number of Common Shares for a gross purchase price of
approximately U.S.$5.76 million on November 30, 2015. In addition,
FBC Holdings S.A.R.L. has consented to the draw, at the Company's
option, of U.S. $5 million under the Company's existing revolving
credit facility.
Pursuant to the subscription agreements, the purchase price for
one Common Share and a warrant to purchase one Common Share is U.S.
$2.00. The Warrants will have an exercise price of U.S. $2.50 per
share, a five-year term, and are exercisable in whole or in part,
at any time prior to expiration. In addition, 1.5 million of the
warrants contain price protection provisions. The transaction is
anticipated to close on or before December 4, 2015, subject to
customary closing conditions. The Company intends to use the
proceeds from the offering for general corporate and working
capital purposes. Ladenburg Thalmann & Co. Inc., a subsidiary
of Ladenburg Thalmann Financial Services Inc. (NYSE MKT:LTS), acted
as exclusive placement agent for the equity offerings.
FBC has agreed that the completion of the equity transactions
described herein would fulfill the conditions applicable under the
revolving credit facility for the additional U.S. $5 million
draw.
In addition, the Company has agreed to reduce the conversion
price of FBC's existing convertible debenture to US $3.00 per share
and to issue warrants to purchase up to an additional 500,000
Common Shares to FBC, which warrants would be issued only if the
maturity dates of the Company's existing credit facilities are
extended as provided for under the FBC credit facility. These
warrants would have a three year term and have an exercise price of
110% of the closing price of our common shares as of the date of
such extension.
FBC is an affiliate of Cyrus Capital Partners, L.P., which
beneficially owns, directly or indirectly, securities of the
Company carrying more than 10% of the voting rights attached to the
outstanding voting securities of the Company prior to giving effect
to the transactions described herein. As a result, the convertible
debenture amendment constitutes a "related party transaction"
within the meaning of Multilateral Instrument 61-101 – Protection
of Minority Security Holders in Special Transactions ("MI 61-101").
The Company intends to file a material change report on Form
51-102F3 in connection with the convertible debenture amendment.
However, such material change report will not be filed at least 21
days before the completion of the convertible debenture amendment
in order to allow the Company to secure the financing opportunities
described herein. The Company is relying on the exemptions from the
"formal valuation" and "minority approval" requirements under MI
61-101 set forth in sections 5.5(a) and 5.7(1)(a) of MI 61-101,
respectively, based on the fact that the subject matter of, or
consideration for, the convertible debenture amendment insofar as
it involves interested parties, as determined in accordance with MI
61-101, does not exceed 25% of the market capitalization of the
Company, as determined in accordance with MI 61-101.
The equity offering described above is being conducted pursuant
to Sphere 3D's effective "shelf" registration statement on Form F-3
(File No. 333- 206357) filed with the Securities and Exchange
Commission ("SEC") on August 14, 2015, which became effective on
August 28, 2015. The offering was made by means of a prospectus
supplement and an accompanying prospectus that form a part of the
registration statement. Electronic copies of a preliminary
prospectus supplement and the accompanying prospectus relating to
the offering may be obtained free of charge, when available, by
visiting EDGAR on the SEC website at www.sec.gov.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state or other jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of
any such state or other jurisdiction.
About Sphere 3D
Sphere 3D Corp. (NASDAQ:ANY) delivers containerization and
virtualization technologies along with data management products
that enable workload-optimized solutions. We achieve this through a
combination of containerized applications, virtual desktops,
virtual storage and physical hyper-converged platforms. Sphere 3D's
value proposition is simple and direct—we allow organizations to
deploy a combination of public, private or hybrid cloud strategies
while backing them up with state of the art storage solutions.
Sphere 3D, along with its wholly-owned subsidiaries, Overland
Storage and Tandberg Data, has a strong portfolio of brands
including Glassware 2.0™, SnapCLOUD™, SnapScale®, SnapServer®, V3,
RDX®, and NEO®. For more information, visit
www.sphere3d.com.
Safe Harbor Statement This press release may
contain forward-looking statements that involve risks,
uncertainties, and assumptions that are difficult to predict.
Actual results and the timing of events could differ materially
from those anticipated in such forward-looking statements as a
result of risks and uncertainties including, without limitation,
unforeseen changes in the course of Sphere 3D's business or the
business of its wholly-owned subsidiaries, including, without
limitation, Overland Storage and Tandberg Data; any failure of the
ecosystem across enterprise cloud products to develop, any increase
in Sphere 3D's cash needs or our inability to obtain additional
debt or equity financing; performance of our products; the level of
success of our collaborations and business partnerships; possible
actions by customers, partners, suppliers, competitors or
regulatory authorities; and other risks detailed from time to time
in Sphere 3D's periodic reports contained in our Annual Information
Form and other filings with Canadian securities regulators
(www.sedar.com) and in prior periodic reports filed with the United
States Securities and Exchange Commission (www.sec.gov). Sphere 3D
undertakes no obligation to update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise, except as required by law.
CONTACT: Investor Relations Contact:
Mike Bishop
The Blueshirt Group
+1 415-217-4968
mike@blueshirtgroup.com
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