As filed with the Securities and Exchange Commission on April
13, 2016
Registration No.
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SPHERE 3D CORP.
(Exact name of
registrant as specified in its charter)
Not Applicable
(Translation of Registrants name
into English)
Ontario, Canada
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240 Matheson Blvd. East
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98-1220792
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(State or other jurisdiction of
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Mississauga, Ontario L4Z 1X1
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(I.R.S. Employer
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Incorporation or Organization)
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(858) 571-5555
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Identification No.)
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(Address and telephone number of
Registrants
principal executive offices)
Eric L. Kelly
Chief Executive Officer
9112 Spectrum Center Boulevard
San Diego, California
92123
(858) 571-5555
(Name, address, and telephone number
of agent for service)
Copy to:
Warren T. Lazarow, Esq.
Paul L. Sieben, Esq.
OMelveny & Myers LLP
2765 Sand Hill Road
Menlo Park, California 94025
(650) 473-2600
Approximate date of commencement of proposed sale to the
public:
From time to time after the effective date of this registration
statement.
If the only securities being
registered on this form are being offered pursuant to dividend or interest
reinvestment plans, please check the following box. [ ]
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933 check the following box.
[X]
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a registration
statement pursuant to General Instruction I.C. or a post-effective amendment
thereto that shall become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act, check the following box. [ ]
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.C.
filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed
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Proposed
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Amount
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maximum
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maximum
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Title of each class of
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to be
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offering price
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aggregate
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Amount of
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securities to be registered
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registered(1)
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per unit(2)
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offering price(2)
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registration
fee
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Secondary Shares
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Common Shares, no
par value per share
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7,287,679
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$1.27
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$9,255,353
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$932
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(1)
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This registration statement shall also cover any
additional common shares that become issuable by reason of any stock
dividend, stock split or other similar transaction effected without the
receipt of consideration that results in an increase in the number of the
outstanding common shares of the registrant. This registration statement
relates to the resale of common shares previously issued to the selling
shareholders or issuable upon exercise of warrants previously issued to
the
selling shareholders.
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(2)
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Estimated solely for the purpose of calculating the
amount of registration fee pursuant to Rule 457(c) under the Securities
Act. The proposed maximum offering price per share and proposed maximum
aggregate offering price are based upon the average of the high $1.30
and low $1.23 sales prices of the registrants common shares on The Nasdaq Global Market on April
12, 2016. The registrant is not selling any
common shares in this offering and, therefore, will not receive any
proceeds from this offering.
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The registrant hereby amends
this registration statement on such date or dates as may be necessary to delay
its effective date until the registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until this registration statement shall become effective on such
date as the Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
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 April 13,
2016
PROSPECTUS
7,287,679 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 7,287,679 common shares issued or
issuable upon the exercise of warrants issued to the selling shareholders. Of
the common shares to which this prospectus relates, 3,031,249 common shares have
been issued through the partial exercise of a warrant, with an exercise price of
$1.22 per common share, issued pursuant to a warrant exchange agreement, dated
March 25, 2016, between us and a selling shareholder, and 4,167,967 common
shares remain issuable upon exercise of the same warrant. The remaining 88,463
common shares to which this prospectus relates are issuable pursuant to a
warrant with an exercise price of $2.06 per common share, issued as compensation
to Ladenburg Thalmann & Co. Inc. for acting as our placement agent in connection
with our December equity financing.
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
proceeds from the sale or other disposition of the common shares covered hereby.
However, we will receive the exercise price of any warrants exercised for cash.
Our common shares are traded on The
Nasdaq Global Market under the symbol ANY. On April 8, 2016, the last reported
sale price for our common shares on Nasdaq was $1.32 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 6 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
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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:
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Our Annual Report on Form 40-F (File No. 001-36532) filed
with the SEC on March 30, 2016;
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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;
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The audited consolidated balance sheets of our company
and subsidiaries as of December 31, 2013, and the related audited
consolidated statements of operations, equity and comprehensive income
(loss), and cash flows and the notes to the financial statements related thereto for the year ended December 31, 2013
contained in our Annual Report on Form 40-F (File No. 001-36532) filed
with the SEC on March 31, 2015;
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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, each contained in our Registration Statement on Form F-4
(File No. 333- 197569) filed with the SEC on July 23, 2014, as
subsequently amended;
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Our Report of Foreign Private Issuer on Form 6-K (File
No. 001-36532) furnished to the SEC on April 7, 2016; and
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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.
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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 disclaim 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.
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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 allow
organizations to deploy a combination of public, private or hybrid cloud
strategies. We achieve this through the sale of solutions that are derived from
our 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 registered office is located at 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,
including common shares issuable upon exercise of the
warrants:
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7,287,679
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Common shares to be outstanding after the offering:
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53,325,969
(1)
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Nasdaq Global Market symbol:
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ANY
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Use of proceeds:
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To the extent that we have received or will receive
additional cash upon exercise of the warrants, we currently expect to use
that cash for general corporate purposes. See Use of Proceeds beginning
on page 10.
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Risk factors:
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See Risk Factors beginning on page 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
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(1)
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The number of common shares shown to be outstanding is
based on the number of common shares outstanding as of April 6, 2016,
and excludes as of such date:
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- 4 -
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3,587,396 common shares subject to outstanding options
having a weighted-average exercise price of $2.41 per share;
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2,068,652 common shares reserved for issuance in
connection with future awards under our 2015 Performance Incentive Plan
and 5,277,857 restricted share units outstanding and unreleased under the
plan;
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2,000,000 common shares reserved for future sale under
our Employee Stock Purchase Plan; and
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7,258,856 common shares issuable pursuant to outstanding warrants having
a weighted-average exercise price of $2.96 per share, including warrants
to purchase up to, in aggregate, 800,000 common shares issued on February
19, 2015, March 6, 2015, March 20, 2015 and December 2015 to FBC Holdings
S.à r.l. in connection with draws on our Revolving Credit Agreement with
FBC (with each such warrants exercise price being determined by reference
to 110% of the closing price for our common shares on The NASDAQ Global
Market on the last complete trading day immediately prior to issuance) and
a warrant to purchase up to, in aggregate, 500,000 common shares issued on
February 26, 2016 in connection with the amendment to our 8% Senior
Secured Convertible Debenture with FBC (with each such warrant's exercise
price being determined by reference to 110% of the closing price for our
common shares on the NASDAQ Global Market on the last complete trading day
immediately prior to issuance).
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Unless otherwise indicated, this prospectus supplement reflects
and assumes no exercise of our outstanding warrants or options to purchase
common shares described above.
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Recent Developments
Warrant Exchange Agreement
A portion of the shares offered under this
prospectus were issued or are issuable pursuant to the terms of a warrant for
the purchase of up to, in aggregate, 7,199,216 common shares, no par value,
issued in connection with a warrant exchange agreement entered into with the
selling shareholder on March 25, 2016 in a privately negotiated exchange under
Section 3(a)(9) of the Securities Act of 1933, as amended, in exchange for the
surrender and cancellation of previously outstanding warrants for the purchase
of up to, in aggregate, 3,031,249 common shares. The previously outstanding
warrants were issued pursuant to (i) that certain Purchase Agreement, dated as
of May 13, 2015, by and between the Company and the Holder, (ii) that certain
Purchase Agreement, dated as of August 10, 2015, by and between the Company and
the Holder, and (iii) that certain Subscription Agreement, dated as of September
22, 2015, by and between the Company and the Holder. The terms of the new
warrant are substantially similar to the previously outstanding warrants except
(i) in the case of the existing warrants issued pursuant to the May 2015
purchase agreement, the exercise price has changed from $4.00 per common share
to $1.22 per common share, (ii) in the case of the existing warrants issued
pursuant to the August 2015 purchase agreement and the September 2015
subscription agreement, the exercise price has changed from $2.33 per common
share to $1.22 per common share, and (iii) the expiry date has changed from
various dates between May 18, 2020 and September 22, 2020 to April 14, 2016.
However, pursuant to the terms of the warrant exchange agreement, because the
selling shareholder exercised the new warrant for the purchase of 3,031,249
common shares before April 14, 2016, the expiry date for the balance of the
unexercised portion of the new warrant became March 25, 2021. We received $3.7
million in proceeds from the selling shareholders partial exercise of the
warrant on March 25, 2016.
Debt Financing
Overland Storage, Inc., a
California corporation (Overland) and wholly owned subsidiary of our company,
Tandberg Data GmbH, a limited liability company organized under the laws of
Germany and wholly owned subsidiary of our company (Tandberg and, together
with Overland, collectively the Borrowers), and Opus Bank, a California
commercial bank, as Lender (Lender), have entered into a Credit Agreement,
dated as of April 6, 2016 (the Credit Agreement). Pursuant to the terms of the
Credit Agreement, the Lender will provide the Borrowers a $10 Million revolving
credit facility and Overland $10 Million term loan facility. The revolving
credit facility will mature on April 6, 2018, and the term loan facility will
mature the earlier of the maturity date in the Debenture (as defined below) or
April 6, 2020. Further, as a condition of the extension of credit to the
Borrowers under the Credit Agreement, we agreed to issue to the Lender a warrant
for the purchase of up to 1,541,768 common shares at an exercise price of $1.30
per common share.
We also entered into a Second
Amendment, dated April 6, 2016, (the Second Amendment) to our existing 8% Senior Secured Convertible
Debenture, dated December 1, 2014, issued to FBC Holdings S.a r.l. (the
Debenture), pursuant to which, among other things, the Debenture has been
amended to provide an additional loan of $5,000,000 under the Debenture (the
Additional Loan) and to make certain other amendments provided therein. The
proceeds of the Additional Loan were used to pay off a portion of the
outstanding obligations under the Revolving Credit Agreement referred to below.
In connection with the
transactions contemplated by the Credit Agreement and the Second Amendment, we
and the Borrowers have repaid all outstanding obligations under the Amended and
Restated Loan and Security Agreement, dated as of March 19, 2014, by and among
the Borrowers and Silicon Valley Bank, as amended, and all outstanding
obligations under the Revolving Credit Agreement, dated as of July 10, 2015, by
and among the Company, the subsidiaries of the Company party thereto and FBC
Holdings S.à r.l., and such Amended and Restated Loan and Security Agreement and
the Revolving Credit Agreement have been terminated.
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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 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 $8.7 million and our
outstanding indebtedness was $36.9 million as of December 31, 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 to 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.
Our cash and other sources of liquidity may not be
adequate to fund our operations for the next 12 months. If we raise additional
funding through sales of equity or equity-based securities, your shares will be
diluted. If we need additional funding for operations and we are unable to raise
it, we may be forced to liquidate assets and/or curtail or cease operations.
We have projected that cash on
hand, available borrowings under our credit facility may not be sufficient to
allow us to continue operations for the next 12 months. Significant changes from
our current forecasts, including, but not limited to: (i) shortfalls from
projected sales levels, (ii) unexpected increases in product costs, (iii)
increases in operating costs, (iv) changes to the historical timing of
collecting accounts receivable and/or (v) failure to secure additional capital
under our credit facility or to secure additional debt or equity financing could
have a material adverse impact on our ability to operate our business or to
access the level of funding necessary to continue operations at current levels.
If any of these events occur, we may be forced to make further reductions in
spending, extend payment terms with suppliers, liquidate assets where possible
and/or suspend or curtail planned programs. Any of these actions could
materially harm our business, and/or results of operations and future prospects.
We may seek debt, equity, or
equity-based financing when market conditions permit. Such financing may not be
available on favorable terms, or at all. If we need additional funding for
operations and are unable to raise it through debt or equity financings, we may
be forced to liquidate assets and/or curtail or cease operations. If we raise
additional funds by selling additional shares of our capital stock, or
securities convertible into shares of our capital stock, the ownership interest
of our existing shareholders will be diluted. The amount of dilution could be
increased by the issuance of warrants or securities with other dilutive
characteristics, such as anti-dilution clauses or price resets.
Our credit facility contains restrictions and
requirements on our operations, including financial covenants. We have in the
past failed to comply with financial covenants in certain of our loan documents,
and similar defaults in the future could adversely affect our financial
condition and our ability to meet our payment obligations on our
indebtedness.
We have obtained external funding
for our business through a Credit Agreement with Opus Bank. This Credit
Agreement contains restrictions on the amount of debt we may incur and other
restrictions and requirements on our operations. We have in the past defaulted
under financial covenants in our previous loan documents, which was waived by
our previous lender. Upon the occurrence of certain events of default under our
current credit facility, our lender may elect to declare all amounts outstanding
to be immediately due and payable and terminate all commitments to extend
further credit. In the event of such acceleration or if we are unable to
otherwise maintain compliance with covenants set forth in these arrangements or
if these arrangements are otherwise terminated for any reason, it could have a
material adverse effect on our ability to access the level of funding necessary
to continue operations at current levels. If any of these events occur,
management may be forced to make reductions in spending, extend payment terms
with suppliers, liquidate assets where possible, and/or suspend or curtail
planned programs. Any of these actions could materially harm our business,
results of operations and future prospects.
- 7 -
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 March 31, 2016, our closing share
price on The NASDAQ Global Market has ranged from a low of $1.15 to a high of
$5.71. 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:
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actual or anticipated fluctuations in our
operating results or future prospects;
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our announcements or our competitors
announcements of new products;
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public reaction to our press releases, our
other public announcements and our filings with the SEC;
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strategic actions by us or our competitors;
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changes in financial markets or general
economic conditions;
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our ability to raise additional capital as
needed;
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developments regarding our patents or
proprietary rights or those of our competitors; and
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changes in stock market analyst recommendations
or earnings estimates regarding our common shares, other comparable
companies or our industry generally.
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Future sales of our common shares or securities
convertible into common shares by us could result in a decline in the trading
price of our common shares and the dilution of the ownership interest of our
existing shareholders.
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 securities convertible into 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 issuable upon exercise of outstanding
warrants, the conversion of outstanding convertible debt, or the effectiveness
of our registration statement may cause the market price of our shares to
decline.
We have warrants outstanding for the
purchase of up to 11,515,286 common shares, including warrants to purchase the
common shares covered by this prospectus, and our 8% Senior Secured Convertible
Debenture is convertible to common shares at a conversion price of $3.00 per
common share. Additionally, we are in the process of registering with the SEC
the common shares issued or issuable upon exercise of warrants for resale, and
upon the effectiveness of the registration statement for these shares, they may
be freely sold in the open market. The sale of our common shares upon exercise
of our outstanding warrants, the conversion of the debenture into common shares,
or the sale of a significant amount of the common shares issued or issuable upon
exercise of the warrants 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 securities under certain
circumstances may trigger price-protection provisions in outstanding warrants,
which would dilute your investment and could result in a decline in the trading
price of our common shares.
In connection with our registered direct
offering in December 2015, we issued a warrant exercisable to purchase up to
1,500,000 common shares that contains certain price protection provisions. If
we, at any time while these warrants are outstanding, effect certain variable
rate transactions and the issue price, conversion price or exercise price per
share applicable thereto is less than the exercise price then in effect for the
warrants, then the exercise price of the warrants will be reduced to equal such
price. Further, if as of the 180 day anniversary from November 30, 2015, the
quotient of (x) the sum of the volume weighted average price of our common
shares for each trading day during the five consecutive trading days ending and
including the trading day immediately preceding such date, divided by (y) five
is less than the current exercise price of $2.50 per common share, the exercise
price of the warrants will be adjusted to such price. The triggering of these
price protection provisions or the potential adjustment to the exercise price of
this warrant, together with its exercise for the purchase of 1,500,000 common
shares, could cause the market price of our common shares to decline or become
highly volatile.
- 8 -
We may have to pay liquidated damages to our investors,
which will increase our negative cash flows.
Under the terms of our
registration rights agreements entered into with certain investors in connection
with private placements of our securities in May, June, and August 2015 and in
connection with the warrant exchange agreement we entered into with a selling
shareholder, if we fail to comply with certain provisions set forth in these
agreements, including covenants requiring that we maintain the effectiveness of
the registration statements registering these securities, then we will be
required to pay liquidated damages to our investors. There can be no assurance
that the registration statements will remain effective for the time periods
necessary to avoid payment of liquidated damages. If we are required to pay our
investors liquidated damages, this could materially harm our business and future
prospects.
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 listing on the NASDAQ
Global Market. If our common stock is delisted from NASDAQ, our business,
financial condition, results of operations and stock price would be adversely
affected, and the liquidity of our stock and our ability to obtain financing
could be impaired.
Maintaining the listing of our
common stock on the NASDAQ Global Market requires that we comply with certain
listing requirements. If our common stock ceases to be listed for trading on
NASDAQ for any reason, it may harm our stock price, increase the volatility of
our stock price, decrease the level of trading activity and make it more
difficult for investors to buy or sell shares of our common stock. Our failure
to maintain a listing on NASDAQ may constitute an event of default under our
outstanding indebtedness as well as any future indebtedness, which could
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, which would adversely affect the trading price of our common stock. If we are not
listed on NASDAQ, we will be limited in our ability to raise additional capital
we may need.
- 9 -
USE OF PROCEEDS
To the extent that we have
received or will receive additional cash upon exercise of the warrants, we
currently expect to use that cash for general corporate purposes. These purposes
may include repayment of debt, working capital needs, capital expenditures,
acquisitions and any other general corporate purpose.
SELLING SHAREHOLDER
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 7,287,679 common shares issued or issuable upon exercise of the
warrant issued pursuant to the exchange agreement dated March 25, 2016 and the
warrant issued as compensation to Ladenburg Thalmann & Co. Inc. for acting as
our placement agent in connection with our December equity financing. The table
below presents information regarding the selling shareholder, 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 shareholder may sell or otherwise dispose of the common shares covered
hereby. The selling shareholder 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 shareholder 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 shareholder
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 shareholder.
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Beneficial
Ownership
(1)
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Number of
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Percent
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Number of
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Percent
|
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Shares
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of
|
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|
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Shares
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|
of
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Beneficially
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Class
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Number of
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Beneficially
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Class
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Owned Prior
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Prior
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Shares
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Owned
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After
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Name of Selling
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to the
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to the
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Offered
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After this
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this
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Shareholder
(2)
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Offering
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Offering
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Hereby
(3)
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Offering
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Offering
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MacFarlane Family Ventures LLC
(4)
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9,554,830
(5)
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17.9%
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7,199,216
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2,355,614
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4.4%
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Ladenburg Thalmann & Co. Inc.
(6)
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88,463
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*
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88,463
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*
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* Less than 1.0%.
(1)
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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 April 6, 2016. Percentage ownership is based on an
aggregation of the 49,069,539 common shares issued and outstanding as of
April 6, 2016 and assumes issuance of the remaining common shares issuable
upon exercise of the warrant issued pursuant to the exchange agreement
dated March 25, 2016 and the warrant issued as compensation to Ladenburg
Thalmann & Co. Inc. for acting as our placement agent in connection with
our December equity financing. This amount totals 53,325,969 common
shares.
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(2)
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Unless otherwise indicated, this table is based on
information supplied to us by the selling shareholders and our records.
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(3)
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7,199,216 common shares offered pursuant to this
prospectus were issued or are issuable pursuant to the warrant issued to
the selling shareholder in connection with the warrant exchange agreement
we entered into with the selling shareholder on March 25, 2016. The
remaining 88,463 common shares offered pursuant to this prospectus are
issuable pursuant to a warrant with an exercise price of $2.06 per common
share, issued as compensation to Ladenburg Thalmann & Co. Inc. for acting
as our placement agent in connection with our December equity financing.
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(4)
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Mr. Victor B. MacFarlane has voting and investment power
with respect to the common shares held by this selling shareholder. The
address for this selling shareholder is: 201 Spear Street 14th Floor, San
Francisco, California 94105.
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(5)
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Consists of a warrant currently exercisable for 4,167,967 common shares
and 5,386,863 common shares held directly by MacFarlane Family Ventures
LLC.
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(6)
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Ladenberg Thalmann & Co. Inc. is a registered broker-dealer and a wholly-owned subsidiary of Ladenburg Thalmann Financial Services Inc. The address for this selling
shareholder is: 4400 Biscayne Blvd., Miami, Florida 33137.
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- 10 -
PLAN OF DISTRIBUTION
We are registering the common
shares issued or issuable upon exercise of the warrants to permit the resale of the 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 bear all fees
and expenses incident to our obligation to register the common shares.
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. 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.
The selling shareholders may use
any one or more of the following methods when disposing of shares or interests
therein:
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ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
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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;
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purchases by a broker-dealer as principal and resale by
the broker-dealer for its account;
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an exchange distribution in accordance with the rules of
the applicable exchange;
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privately negotiated transactions;
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short sales effected after the date the registration
statement of which this prospectus is a part is declared effective by the
SEC;
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through the writing or settlement of options or other
hedging transactions, whether through an options exchange or otherwise;
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broker-dealers may agree with the selling shareholders to
sell a specified number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted by applicable law.
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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).
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
this offering. Upon any exercise of the warrants by payment of cash, however, we
will receive the exercise price of the warrants.
- 11 -
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.
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.
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 one of the selling
shareholders to keep the registration statement of which this prospectus
constitutes a part effective until the earlier of (1) 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 (2) the date on which the shares
may be sold without restriction pursuant to Rule 144 of the Securities Act
without the Company being in compliance with the reporting requirements set
forth under Rule 144(d)(1)(i).
- 12 -
CAPITALIZATION
The following table sets forth our cash
and cash-equivalents and our capitalization as of December 31, 2015 on an actual
basis.(1) The table below does not present our capitalization on an as-adjusted
basis to give effect to the issuance and sale of the 7,199,216 common shares
issued or issuable upon exercise of the warrant issued on March 25, 2016 or the
88,463 common shares issuable upon exercise of the warrant issued as
compensation to Ladenburg Thalmann & Co. Inc. for acting as our placement agent
in connection with our December equity financing. The holders of the warrants
are not obligated to exercise them for the purchase of our common shares, and as
a result, there can be no assurance that the holders will exercise the warrants.
In addition, the table below does not reflect our recent debt financing
completed on April 6, 2016, pursuant to which we repaid the outstanding debt
under our Revolving Credit Agreement and Amended and Restated Loan and Security
Agreement. Our new lender has provided certain of our subsidiaries a $10 Million
revolving credit facility and a $10 Million term loan facility. In addition, on
April 6, 2016, we
amended our Convertible Debenture to provide an additional loan of $5 Million.
You should read the information
in the following table in conjunction with our consolidated financial statements
and the related notes and the section entitled Managements Discussion and
Analysis of Financial Condition and Results of Operations contained in our
Annual Report on Form 40-F for the year ended December 31, 2015 filed with the
SEC and incorporated by reference in this prospectus supplement and the
accompanying prospectus.
(In thousands, except per share
information)
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As of December 31,
2015
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Cash and cash equivalents
|
$
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8,661
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|
Revolving Credit Agreement
|
$
|
10,000
|
|
Amended and Restated Loan and
Security Agreement
|
$
|
7,391
|
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Convertible Debenture (Long-Term)
|
$
|
19,500
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Stockholders equity
|
|
|
|
Common
shares, no par value per share; unlimited shares authorized, 45,198
thousand
shares issued and outstanding
|
$
|
136,058
|
|
Accumulated deficit
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|
(66,783
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)
|
Accumulated Other Comprehensive
Loss
|
|
(1,135
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)
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Total shareholders equity
|
$
|
68,140
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(1)
Subsequent to December 31, 2015, an aggregate of
3,870,825 common shares were issued pursuant to (i) restricted share issuance releases,
(ii) the subscription agreements we entered into with investors on December 15,
2015, and (iii) warrant exercises, including the partial exercise of the warrant
issued to MacFarlane Family Ventures LLC for the purchase of 3,031,249 common shares.
- 13 -
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:
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ANY shares
TSXV
|
|
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(in C$)
|
|
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|
High
|
|
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Low
|
|
Annual Information for
2012, 2013, 2014
|
|
|
|
|
|
|
2012 (from December
28, 2012)
|
|
0.80
|
|
|
0.74
|
|
2013
|
|
6.56
|
|
|
0.45
|
|
2014 (through
December 10, 2014)
|
|
11.15
|
|
|
5.45
|
|
Quarterly information for the past two fiscal years
and subsequent quarters:
|
|
|
|
|
|
|
2013,
quarter ended
|
|
|
|
|
|
|
December 31
|
|
6.56
|
|
|
2.70
|
|
September 30
|
|
2.88
|
|
|
0.50
|
|
June
30
|
|
0.73
|
|
|
0.45
|
|
March 31
|
|
0.85
|
|
|
0.53
|
|
2014,
quarter ended
|
|
|
|
|
|
|
December 31
(through December 10, 2014)
|
|
10.84
|
|
|
5.90
|
|
September 30
|
|
11.15
|
|
|
6.70
|
|
June 30
|
|
10.84
|
|
|
6.75
|
|
March
31
|
|
8.49
|
|
|
5.45
|
|
NASDAQ:
|
|
ANY shares
NASDAQ
|
|
|
|
(in
US$)
|
|
|
|
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
|
|
3.35
|
|
|
1.33
|
|
September 30
|
|
5.71
|
|
|
1.99
|
|
June 30
|
|
5.17
|
|
|
3.14
|
|
March 31
|
|
7.13
|
|
|
3.47
|
|
2016, quarter ended
|
|
|
|
|
|
|
June 30 (through April 12, 2016)
|
|
1.34
|
|
|
1.05
|
|
March 31
|
|
1.97
|
|
|
1.15
|
|
Monthly information for
the most recent six months
|
|
|
|
|
|
|
October 2015
|
|
3.36
|
|
|
2.05
|
|
November 2015
|
|
2.75
|
|
|
1.79
|
|
December 2015
|
|
1.83
|
|
|
1.33
|
|
January 2016
|
|
1.46
|
|
|
1.15
|
|
February 2016
|
|
1.84
|
|
|
1.26
|
|
March 2016
|
|
1.97
|
|
|
1.24
|
|
April 2016 (through April 12, 2016)
|
|
1.34
|
|
|
1.05
|
|
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.
- 14 -
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.
We have been advised that there
are strong defenses that can be raised 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 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 by 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
|
$
|
932
|
|
|
Legal fees and expenses
|
|
30,000
|
|
|
Accounting fees and expenses
|
|
5,000
|
|
|
Miscellaneous expenses
|
|
5,000
|
|
|
Total
|
$
|
40,932
|
|
- 15 -
SHARE CAPITAL
As of April 6, 2016, 49,069,539 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,
bylaws, 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.
- 16 -
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.
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, 2015
and 2014,
and for the years then ended, included in our Annual Report on Form 40-F for the
year ended December 31, 2015, 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 LLP 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. 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.
- 17 -
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 9.
|
Exhibits and Financial Statement
Schedules
|
The exhibits to this registration
statement are listed in the Exhibit Index that appears immediately following the
signature pages of this registration statement. Such Exhibit Index is hereby
incorporated in this Item 9 by reference.
(a) The
undersigned registrant hereby undertakes:
1. To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii)
To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or percent change in the maximum
aggregate offering price set forth in the Calculation of Registration Fee
table in the effective registration statement.
(iii)
To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
provided, however
, that paragraphs (i), (ii), and (iii)
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
2. That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide
offering thereof.
3. To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
4. To
file a post-effective amendment to the registration statement to include any
financial statements required by Item 8.A. of Form 20-F at the start of any
delayed offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Securities Act need
not be furnished, provided, that we include in the prospectus, by means of a
post-effective amendment, financial statements required pursuant to this
paragraph (4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, a post-effective amendment
need not be filed to include financial statements and information required by
Section 10(a)(3) of the Securities Act or Rule 3-19 of Regulation S-X if such
financial statements and information are contained in periodic reports filed
with or furnished to the SEC by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
5. That,
for purposes of determining liability under the Securities Act of 1933 to any
purchaser, if relying on Rule 430B:
(i)
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii)
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act of
1933 shall be deemed to be part of and included in the registration statement as
of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be
deemed to be the initial
bona fide
offering thereof.
Provided,
however
, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date.
- 18 -
(b)
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrants
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plans annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
(c) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
- 19 -
SIGNATURES
Pursuant to the requirements of
the Securities Act of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form F-3
and has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of San Diego, State of
California, on this 13
th
day of April, 2016.
SPHERE 3D CORP.
|
|
|
|
|
By:
|
/s/
ERIC L. KELLY
|
|
Eric L. Kelly
|
|
Chief Executive Officer
|
POWER OF ATTORNEY
Each person whose signature
appears below hereby constitutes and appoints Eric L. Kelly and Kurt L.
Kalbfleisch, jointly and severally, as his attorney-in-fact, each with the power
of substitution, for him in any and all capacities, to sign any and all
amendments to this registration statement, including post-effective amendments
or any abbreviated registration statement and any amendments thereto filed
pursuant to Rule 462(b) increasing the number of securities for which
registration is sought, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, with full power of
each to act alone, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
for all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his or
her or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of
the Securities Act of 1933, as amended, this registration statement has been
signed by the following persons in their capacities and on the date indicated.
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ ERIC L.
KELLY
|
|
Chairman of the Board and Chief Executive
Officer
|
April 13, 2016
|
Eric L. Kelly
|
|
(
Principal Executive
Officer
)
|
|
|
|
|
|
/s/ KURT L.
KALBFLEISCH
|
|
Chief Financial Officer
|
April 13, 2016
|
Kurt L. Kalbfleisch
|
|
(
Principal Financial and
Accounting Officer
)
|
|
|
|
|
|
/s/ PETER ASHKIN
|
|
Director
|
April 13, 2016
|
Peter Ashkin
|
|
|
|
|
|
|
|
/s/ MARIO
BIASINI
|
|
Director
|
April 13, 2016
|
Mario Biasini
|
|
|
|
|
|
|
|
/s/ DANIEL J.
BORDESSA
|
|
Director
|
April 13, 2016
|
Daniel J. Bordessa
|
|
|
|
|
|
|
|
/s/ GLENN M.
BOWMAN
|
|
Director
|
April 13, 2016
|
Glenn M. Bowman
|
|
|
|
|
|
|
|
/s/ VIVEKANAND
MAHADEVAN
|
|
Director
|
April 13, 2016
|
Vivekanand Mahadevan
|
|
|
|
|
|
|
|
/s/ PETER
TASSIOPOULOS
|
|
Director
|
April 13, 2016
|
Peter Tassiopoulos
|
|
|
|
- 20 -
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