As filed with the Securities and Exchange Commission on August
23, 2017
Registration No.
333-219383
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
20549
Amendment No. 1
to
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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Identification No.)
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(858) 571-5555
(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 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 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 filed pursuant to
Rule 462(d) 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. [ ]
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company [X]
If an emerging growth company that prepares its financial
statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to
Section 7(a)(2)(B) of the Securities Act. [ ]
The term new or revised financial accounting standard refers
to any updated issued by the Financial Accounting Standards Board to its
Accounting Standards Codification after April 5, 2012.
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)(3)
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per unit(2)
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offering
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registration
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price(2)
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fee(4)
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Common Shares, no
par value per share
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3,376,797
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$3.75
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$12,662,988
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$1,468
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(1)
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Pursuant to Rule 416 of the Securities Act of 1933, as
amended, 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 3,376,797 common shares. This includes 1,451,198 common
shares issued upon exchange of warrants to purchase common shares that we
sold between December 30, 2016 and March 16, 2017, as well as 725,599
common shares at a price of $7.50 per share that we sold together with
these warrants pursuant to the same transactions. The common shares being
registered pursuant to this prospectus also include 600,000 common shares
issuable upon exercise of warrants to purchase common shares that we sold
on August 11, 2017 as well as 600,000 common shares at a price of $5.00
per share that we sold together with these warrants pursuant to the same
transaction.
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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 $3.95 and
low $3.55 sales prices of the registrants common shares on The NASDAQ
Capital Market on August 22, 2017.
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(3)
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Adjusted to reflect a 1-for-25 share consolidation of our
common shares effective July 11, 2017.
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(4)
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$1,055 was previously paid in the initial filing of the
registration statement on Form F-3, filed on July 20,
2017.
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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 AUGUST 23,
2017
PROSPECTUS
3,376,797 Common Shares
This prospectus relates solely to the resale by the selling
shareholders identified in this prospectus of an aggregate of 3,376,797
common shares. This includes 1,451,198 common shares issued upon exchange of
warrants to purchase common shares that we sold between December 30, 2016 and
March 16, 2017, as well as 725,599 common shares at a price of $7.50 per share
that we sold together with these warrants pursuant to the same transactions. The
common shares being registered pursuant to this prospectus also include 600,000
common shares issuable upon exercise of warrants to purchase common shares that
we sold on August 11, 2017 as well as 600,000 common shares at a price of $5.00
per share that we sold together with these warrants pursuant to the same
transaction. We will not receive any of the proceeds from the sale of our common
shares being sold by the selling shareholders.
From the date of this prospectus, the selling shareholders may
offer the common shares from time to time in amounts, at prices and on terms
determined by market conditions at the time of the offering. The selling
shareholders may sell or otherwise transfer the common shares directly or
alternatively through underwriters, broker-dealers or agents they select. If
such selling shareholders use underwriters, broker-dealers or agents to sell or
transfer the common shares, we will name them and describe their compensation in
a prospectus supplement. 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. For more information
regarding the sales or transfers of common shares by the selling shareholders
pursuant to this prospectus, please read Plan of Distribution. Our common
shares are traded on The NASDAQ Capital Market under the symbol ANY. On August
22, 2017, the last reported sale price for our common shares on NASDAQ was $3.90
per share.
We are an emerging growth company, as defined in the
Jumpstart Our Business Startups Act of 2012 and are subject to reduced public
company reporting requirements.
Our business and an investment in our securities involve
significant risks. Please carefully consider the risks discussed in this
prospectus under Risk Factors beginning on page 5 and the "Risk Factors" in
Item 3. Key InformationRisk Factors of our most recent Annual Report on Form
20-F incorporated by reference into this prospectus and the Risk Factors
section of any prospectus supplement for a discussion of the factors you should
consider carefully before deciding to purchase these 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 August 23, 2017.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form F-3
that we filed with the SEC under the Securities Act of 1933, as amended, or the
Securities Act. This prospectus and any accompanying prospectus supplement do
not contain all of the information included in the registration statement. For
further information, we refer you to the registration statement, including its
exhibits, filed with the SEC. Statements contained in this prospectus and any
accompanying prospectus supplement about the contents of any document are not
necessarily complete. If SEC rules require that a document be filed as an
exhibit to the registration statement, please see such document for a complete
description of these matters.
This prospectus only provides you with a general description of
the securities being offered. Each time a selling shareholder sells any of the
offered securities, such selling shareholder will provide this prospectus and a
prospectus supplement, if applicable, that will contain specific information
about the terms of the offering. The prospectus supplement may also add, update
or change any information contained in this prospectus. You should carefully
read this prospectus, any prospectus supplement and any free writing prospectus
related to the applicable securities that is prepared by us or on our behalf or
that is otherwise authorized by us, together with the additional information
described under the headings Where You Can Find More Information and
Incorporation of Certain Documents by Reference.
You should rely only on the information contained or
incorporated by reference in this prospectus, any prospectus supplement and any
free writing prospectus related to these securities that is prepared by us or on
our behalf or that is otherwise authorized by us. We have not authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. You
should assume that the information contained in this prospectus, any prospectus
supplement, any free writing prospectus and the documents incorporated by
reference herein and therein is accurate only as of their respective dates. Our
business, financial condition, results of operations and prospects may have
changed since those dates. To the extent there is a conflict between the
information contained in this prospectus and the prospectus supplement, you
should rely on the information in the prospectus supplement, provided that if
any statement in one of these documents is inconsistent with a statement in
another document having a later date for example, a document incorporated by
reference into this prospectus or any prospectus supplement the statement in
the document having the later date modifies or supersedes the earlier
statement.
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.
Unless otherwise stated, references in this prospectus to
shares of our common shares, including prices per share of our common shares,
have been retroactively restated to reflect the 1-for-25 share consolidation
that was approved by our board of directors on July 5, 2017. Our common shares
commenced trading on a consolidation-adjusted basis on July 12, 2017.
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. In accordance with the Exchange Act, we file reports, including annual
reports on Form 20-F, with the SEC containing financial statements audited by an
independent accounting firm. We also furnish or 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. Status as a foreign private issuer is determined as of
the second fiscal quarter with changes to status becoming effective on the first
day of the next fiscal year. We have determined that we no longer qualify as a
foreign private issuer based on our share holdings as of June 30, 2017.
Accordingly, beginning on January 1, 2018, we will no longer be eligible to use
the forms and rules designated for foreign private issuers. 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. This prospectus incorporates by reference the documents
listed below and any future filings we make with the SEC under Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act including all subsequent reports on Form
20-F and any report on 6-K which indicates it is being incorporated by reference
(in each case, other than those documents or the portions of those documents
deemed to be furnished and not filed in accordance with SEC rules) until the
offering of the securities under the registration statement of which this
prospectus forms a part is terminated or completed:
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Our Annual Report on Form 20-F (File No. 001-36532) filed
with the SEC on March 31, 2017;
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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 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 unaudited pro forma condensed combined
financial information of our company, the Overland companies and the
Tandberg companies giving effect to the acquisition of the Overland
companies and derived from the historical consolidated financial
statements and notes thereto of our companies; the description of the
terms of our merger with Overland Storage, Inc., together with Annex A;
and the description of the rights of our shareholders contained in our
Registration Statement on Form F-4 (File No. 333- 197569) filed with the
SEC on July 23, 2014, as subsequently amended; and
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Our Report of Foreign Private Issuer on Form 6-K (File
No. 001-36532) furnished to the SEC on August 15, 2017, August 14, 2017,
July 28, 2017, July 20, 2017, July 17, 2017, June 19, 2017, May 12, 2017,
March 29, 2017, March 24, 2017, November 14, 2016, September 22, 2016,
September 15, 2016, August 12, 2016, August 11, 2016, May 13, 2016, May
12, 2016, April 21, 2016, and April 7, 2016.
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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.
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 and the documents we
incorporate by reference in this prospectus 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:
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our ability to maintain the listing of our common shares on the NASDAQ
Capital Market;
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our limited operating history;
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our ability to generate cash to fund operations;
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our ability to refinance our credit facilities prior to maturity or
otherwise raise additional debt or equity financing;
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our ability to integrate the businesses of HVE ConneXions, LLC, and
Unified ConneXions, Inc.;
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the impact of competition;
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any defects in components or design of our products;
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the retention or maintenance of key personnel;
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the possibility of significant fluctuations in operating results;
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currency fluctuations;
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our ability to maintain business relationships;
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financial, political or economic conditions;
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financing risks;
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future acquisitions;
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our ability to protect our intellectual property;
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third party intellectual property rights;
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volatility in the market price for our common shares;
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our compliance with financial reporting and other requirements as a public
company;
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conflicts of interests;
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future sales of our common shares by our directors, officers and other
shareholders;
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dilution and future sales of common shares;
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acquisition-related risks; and
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other factors described under the heading Risk Factors and other risk
factors described in the documents incorporated by reference in this
prospectus supplement and the accompanying prospectus.
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.
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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.
4
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.
5
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 20-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 20-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 any prospectus supplement. The risks and uncertainties not presently known
to us or that we currently deem immaterial may also materially harm our
business, operating results and financial condition and could result in a
complete loss of your investment.
Risks Related to Our Common Shares and this Offering
Our determination that we no longer qualify as a foreign
private issuer could constrain our ability to raise new capital.
We have historically relied on NASDAQ Stock Market Marketplace
Rules, which permit NASDAQ-listed companies that are foreign private issuers to
follow home country practices in lieu of certain corporate governance provisions
specified by the NASDAQ. In particular, we have historically followed 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. We relied upon this exemption
in connection with the integrated offerings of common shares and warrants to
purchase common shares consummated in September, October, and December 2015; in
connection with the warrant exchange in March 2016; and the integrated offerings
of common shares and warrants to purchase common shares consummated in the
period between December 2016 and August 2017.
Status as a foreign private issuer is determined as of the
second fiscal quarter with changes to status becoming effective on the first day
of the next fiscal year. We have determined that we no longer qualify as a
foreign private issuer based on our share holdings as of June 30, 2017.
Accordingly, beginning on January 1, 2018, we will no longer be eligible to use
the forms and rules designated for foreign private issuers, which will subject
us to the shareholder approval requirements for the issuance of securities under
NASDAQ Listing Rule 5635. This could constrain our ability to raise new capital
and have a material adverse effect on our business, financial condition and
results of operations.
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 August 22, 2017, our closing stock price has ranged
from a low of $2.44 to a high of $23.75. 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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6
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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 could adversely affect
the market price and our future capital-raising activities could involve the
issuance of equity securities, which would dilute your investment and could
result in a decline in the trading price of our common shares.
We will likely sell securities in the public or private equity
markets if and when conditions are favorable, even if we do not have an
immediate need for additional capital at that time. Sales of substantial amounts
of common shares, or the perception that such sales could occur, could adversely
affect the prevailing market price of our common shares and our ability to raise
capital. We may issue additional common shares in future financing transactions
or as incentive compensation for our executive management and other key
personnel, consultants and advisors. Issuing any equity securities would be
dilutive to the equity interests represented by our then-outstanding common
shares. The market price for our common shares could decrease as the market
takes into account the dilutive effect of any of these issuances.
Sales of shares issuable upon exercise or exchange 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
2,195,108 common shares having a weighted-average exercise price of $9.90 per
share. Our 8% Senior Secured Convertible Debenture is currently convertible into
common shares at a conversion price of $75.00 per common share. 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.
If our common shares are delisted from the NASDAQ Capital
Market, our business, financial condition, results of operations and share price
could be adversely affected, and the liquidity of our common shares and our
ability to obtain financing could be impaired.
In August 2016, we received a letter from the NASDAQ Stock
Market LLC (NASDAQ) notifying us that we were not in compliance with the
requirement of NASDAQ Listing Rule 5450(a)(1) (Listing Rule) for continued
listing on the NASDAQ Global Market as a result of the closing bid price for our
common shares being below $1.00 for 30 consecutive business days. This
notification has had no effect on the listing of our common shares at this time.
In accordance with the Listing Rule, we had 180 calendar days, or until January
30, 2017, to regain compliance with such rule. On February 1, 2017, we were
granted an additional 180 calendar day period to regain compliance with the
Listing Rule in connection with the transfer of the listing of our common shares
to the NASDAQ Capital Market. To regain compliance, we effectuated a share
consolidation on a 1-for-25 basis in order for our common shares to have a
closing bid price above $1.00 for a minimum of 10 consecutive business days.
Although we regained compliance on July 26, 2017, we cannot assure you that we
will be able to maintain compliance in the future.
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 60,000 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.
Additionally, if at any time while the warrants issued pursuant to the
Securities Purchase Agreement entered into in March 2017 are outstanding, the
Company sells or grants options to purchase, reprices or otherwise issues any
common shares or securities convertible into common shares at a price less than
$7.50, then the exercise price for the warrants will be reduced to such price,
provided that the exercise price will not be lower than $0.10, and the number of
common shares issuable under the warrants will be increased such that, after
taking into account the decrease in the exercise price, the aggregate exercise
price under the warrants will remain the same. The Companys share
consolidation, which became effective on July 11, 2017, did not adjust the
minimum exercise price of these warrants. Also, pursuant to the terms of the
warrants issued pursuant to the Securities Purchase Agreement entered into on August 11, 2017, until December 31,
2017, if the Company sells or grants options to purchase, reprices or otherwise
issues any common shares or securities convertible into common shares at a price
less than $5.00, then the exercise price for such warrants will be reduced to
105% of such price. The triggering of these price protection provisions,
together with the exercise of these warrants, could cause the market price of
our common shares to decline or become highly volatile, and/or cause additional
dilution to our shareholders.
7
The terms of our March and August 2017 private placements
may materially and adversely impact our ability to obtain additional financing
in the future.
We are subject to certain restrictions and obligations in
connection with our private placement of warrants that was consummated in March
2017 which may materially and adversely affect our ability to obtain additional
financing in the future. These restrictions and obligations include
participation rights whereby certain investors are entitled to purchase up to
50% in the aggregate of the securities sold in any subsequent issuance for 15
months following the closing of the private placement (the Closing),
prohibitions on issuing common shares or common share equivalents in a variable
rate transaction for 90 days following the Closing and prohibitions on issuing
common shares or common share equivalents through an equity line of credit,
at-the-market offering, or similar transaction for six months following the
Closing. Additionally, if at any time while the warrants issued pursuant to the
Securities Purchase Agreement entered into in March 2017 are outstanding, the
Company sells or grants options to purchase, reprices or otherwise issues any
common shares or securities convertible into common shares at a price less than
$7.50, then the exercise price for the warrants will be reduced to such price,
provided that the exercise price will not be lower than $0.10, and the number of
common shares issuable under the warrants will be increased such that, after
taking into account the decrease in the exercise price, the aggregate exercise
price under the warrants will remain the same. The Companys share
consolidation, which became effective on July 11, 2017, did not adjust the
minimum exercise price of these warrants. Also, pursuant to the terms of the
warrants issued pursuant to the Securities Purchase Agreement entered into on
August 11, 2017, until December 31, 2017, if the Company sells or grants options
to purchase, reprices or otherwise issues any common shares or securities
convertible into common shares at a price less than $5.00, then the exercise
price for such warrants will be reduced to 105% of such price. The triggering of
these price protection provisions, together with the exercise of these warrants,
could materially and adversely affect our ability to obtain additional financing
in the future.
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, in connection with the warrant
exchange agreement we entered into in March 2016 and in connection with the
private placements in March and August 2017, 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.
8
USE OF PROCEEDS
Any selling shareholder will receive all of the net proceeds
from the sales of our common shares offered by such selling shareholder pursuant
to this prospectus.
9
CAPITALIZATION
The following table sets forth our cash and cash-equivalents
and our capitalization as of June 30, 2017 on an actual basis. The table below
does not present our capitalization on an as-adjusted basis to give effect to
(i) the 1,451,198 common shares issued upon exchange of warrants to purchase
common shares that we sold between December 30, 2016 and March 16, 2017, or (ii)
the 600,000 common shares issuable upon exercise of warrants to purchase common
shares that we sold on August 11, 2017 as well as 600,000 common shares at a
price of $5.00 per share that we sold together with these warrants pursuant to
the same transaction. 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.
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 20-F
for the year ended December 31, 2016 filed with the SEC on March 31, 2017
incorporated by reference in this prospectus.
(In thousands,
except share and per share information)
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,272
|
|
Current portion of long-term debt, net
|
|
$
|
43,797
|
|
Warrant liability
|
|
$
|
2,787
|
|
Shareholders equity
|
|
|
|
|
Common stock, no par value per share;
unlimited shares authorized, 4,365,799 shares issued and outstanding,
actual
|
|
$
|
166,740
|
|
Accumulated deficit
|
|
$
|
(150,565
|
)
|
Accumulated other comprehensive loss
|
|
$
|
(1,688
|
)
|
Total shareholders equity
|
|
$
|
14,487
|
|
Total liabilities and shareholders equity
|
|
$
|
87,758
|
|
10
SELLING SHAREHOLDERS
The following tables provide certain information with respect
to the common shares beneficially owned by each selling shareholder as of August
22, 2017. Except as otherwise noted in the footnotes following the table, none
of the selling shareholders has had a material relationship with us within the
past three years.
All of the common shares acquired by the selling shareholders
in certain private placements between December, 2016 and March, 2017 and all the
common shares issued upon exchange of warrants issued in the private placements
are being registered for sale pursuant to this prospectus. On July 11, 2017, the
warrants were amended to permit us, in our sole discretion, to opt to exchange
no fewer than all of the amended warrants for the same number of common shares.
Between July 14, 2017 and July 20, 2017, we notified such holders of our
election to exchange all of the warrants for common shares pursuant to the terms
of the amended warrants. The warrant exchange was completed on or about July 26,
2017. Additionally, all of the common shares acquired by certain selling
shareholders in a private placement in August, 2017 and all of the common shares
issuable upon exercise of warrants in such private placement are being
registered for sale pursuant to this prospectus.
The selling shareholders are not under any obligation to sell
all or any portion of their common shares, nor are they obligated to sell any of
their common shares immediately under this prospectus. No selling shareholder
has indicated to us that it presently intends to sell common shares offered by
this prospectus. Since the selling shareholders are not obligated to sell their
common shares, we do not know how many common shares each of them will own when
this offer is terminated.
In the following table, we have determined the number and
percentage of common shares and common shares issuable under the warrants
beneficially owned in accordance with Rule 13d-3 of the Exchange Act, based on
information provided to us by the selling shareholders, and this information
does not necessarily indicate beneficial ownership for any other purpose. In
determining the number of shares of our common shares beneficially owned by a
person and the percentage ownership of that person, we include any shares as to
which the person has sole or shared voting power or investment power, as well as
any shares subject to warrants or options held by that person that are currently
exercisable or exercisable within 60 days after August 22, 2017. Applicable
percentages are based on 6,596,786 common shares outstanding on August 22,
2017.
We have prepared the following tables and the related notes
solely based on information supplied to us by the selling shareholder. We have
not sought to verify such information. Additionally, the selling shareholder may
have sold or transferred some or all of the common shares and warrants listed
below since the date on which the information was provided to us. Other
information about the selling shareholder may change over time.
Beneficial
Ownership
(1)
|
|
|
|
Common Shares
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Beneficially
|
|
|
|
|
|
Common
|
|
|
Common Shares
|
|
|
|
|
|
|
Owned Prior to the
|
|
|
|
|
|
Shares
|
|
|
Beneficially Owned
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered
|
|
|
|
|
|
|
|
|
|
Offering
|
|
|
|
|
|
Hereby
(3)
|
|
|
After the Offering
|
|
|
|
|
Selling Shareholder Name and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Address
(2)
|
|
Number
|
|
|
Percent
|
|
|
for Sale
|
|
|
Number
|
|
|
Percent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ThreeD Capital Inc.
|
|
84,000
|
|
|
1.17%
|
|
|
84,000
|
|
|
|
|
|
|
|
69 Yonge Street, Suite 1010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Toronto, Ontario M5E
1K3
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1313366 Ontario Inc.
|
|
616,000
|
|
|
7.20%
|
|
|
518,000
|
|
|
98,000
|
|
|
1.36
|
|
55 Burbank Drive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thornhill, Ontario L4J
7T9
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheldon Inwentash
|
|
358,780
|
|
|
4.98%
|
|
|
335,000
|
|
|
23,780
|
|
|
*
|
|
126 Old Forest Hill Road
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Toronto, Ontario M5P
2R9
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MF Ventures, LLC
|
|
1,944,570
|
|
|
26.03%
|
|
|
1,599,999
|
|
|
344,571
|
|
|
4.61%
|
|
201 Spear St., 14th Floor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Francisco, CA
94105
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
Lynn Factor
|
536,780
|
7.41%
|
494,000
|
42,780
|
*
|
126 Old Forest Hill Road
|
|
|
|
|
|
Toronto, Ontario M5P 2R9
(8)
|
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Gargiulo
|
16,800
|
*
|
16,800
|
|
|
41 Limcombe Dr
|
|
|
|
|
|
Thornhill, Ontario L3T 2V7
|
|
|
|
|
|
|
|
|
|
|
|
Samuel Stern
|
106,666
|
1.48%
|
81,999
|
24,667
|
*
|
620 Wilson Ave #215
|
|
|
|
|
|
Toronto, Ontario M5K 1Z3
|
|
|
|
|
|
|
|
|
|
|
|
Manitex Capital Inc.
|
48,000
|
*
|
48,000
|
|
|
16667 Hymus Blvd.
|
|
|
|
|
|
Kirkland, Quebec H9H 4R9
(9)
|
|
|
|
|
|
|
|
|
|
|
|
Robert Halpern
|
9,000
|
*
|
9,000
|
|
|
8171 Vonge St, Suite 116
|
|
|
|
|
|
Thornhill, Ontario L37 2C6
|
|
|
|
|
|
|
|
|
|
|
|
Leonard Waldman
|
12,000
|
*
|
12,000
|
|
|
108 Highland Circle
|
|
|
|
|
|
Toronto, Ontario M2L 1H1
|
|
|
|
|
|
|
|
|
|
|
|
Pino Guido
|
9,999
|
*
|
9,999
|
|
|
125 Park Ridge Drive
|
|
|
|
|
|
Kleinburg, Ontario L0J 1C0
|
|
|
|
|
|
|
|
|
|
|
|
Skytrade Corporation
|
20,001
|
*
|
20,001
|
|
|
133 Hazelton Avenue, Suite 801
|
|
|
|
|
|
Toronto, Ontario M5R 0Z6
(10)
|
|
|
|
|
|
|
|
|
|
|
|
Countryman Investments Ltd.
|
157,684
|
2.19%
|
99,999
|
57,685
|
*
|
520 - 885 Dunsmuir Street
|
|
|
|
|
|
Vancouver, BC V6C 1N5
(11)
|
|
|
|
|
|
|
|
|
|
|
|
Michael Lamanna
|
36,000
|
*
|
36,000
|
|
|
5530 King Road
|
|
|
|
|
|
Nobleton, Ontario L0G 1N0
|
|
|
|
|
|
|
|
|
|
|
|
Rory O'Neill
|
12,000
|
*
|
12,000
|
|
|
1707 - 68 Abell Street
|
|
|
|
|
|
Toronto, Ontario M6J 0B1
|
|
|
|
|
|
* Less than 1%
Unless otherwise stated, the respective
selling shareholder has no relationship to us.
(1)
|
Beneficial ownership is determined in accordance with
Section 13(d) of the Exchange Act and generally includes voting and
investment power with respect to securities and including any securities
that grant the selling shareholder the right to acquire common shares
within 60 days of August 22, 2017. We did not deem these shares
outstanding, however, for the purpose of computing the percentage
ownership of any other selling shareholder. Percentage ownership is based
on an aggregation of the 6,596,786 common shares issued and outstanding as
of August 22, 2017 and includes issuance of the remaining common shares
issued upon exercise of warrants in the amount of 600,000. This amount
totals 7,196,786 common shares.
|
|
|
(2)
|
Unless otherwise indicated, this table is based on
information supplied to us by the selling shareholders and our
records.
|
12
(3)
|
These shares include 725,599 common shares and 1,451,198
common shares issued upon the exchange of warrants issued to the selling
shareholders between December 30, 2016 and March 16, 2017, as amended on
July 11, 2017 and 600,000 common shares and 600,000 common shares issuable
upon exercise of warrants sold in a private placement, the closing of
which occurred on or about August 11, 2017.
|
|
|
(4)
|
By virtue of his position as Chief Executive Officer of
ThreeD Capital Inc., Sheldon Inwentash has voting and investment power
with respect to the common shares held by this selling
shareholder.
|
|
|
(5)
|
Jeff Kopman, President of 1313366 Ontario Inc., has
voting and investment power over these securities.
|
|
|
(6)
|
Includes 8,800 common shares issuable pursuant to
warrants.
|
|
|
(7)
|
MF Ventures, LLC 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 (on a
partially-diluted basis). Victor B. MacFarlane and Thaderine D. MacFarlane
have shared voting and investment power with respect to the common shares
held by this selling shareholder. Includes 272,727 common shares issuable
pursuant to warrants.
|
|
|
(8)
|
Includes 42,780 common shares issuable pursuant to
warrants.
|
|
|
(9)
|
Mr. Steve Saviuk, President and Chief Executive Officer
of Manitex Capital Inc., has voting and investment power over these
securities.
|
|
|
(10)
|
Mr. Jason Meretsky has voting and investment power over
these securities.
|
|
|
(11)
|
Mr. G. David Richardson has voting and investment power
over these securities. Includes 8,000 common shares issuable pursuant to
warrants.
|
13
SHARE CAPITAL
As of August 22, 2017, 6,596,786 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.
The Company has unlimited authorized shares of common shares at
no par value. The share capital activity was as follows (in thousands):
|
Number of
|
|
Shares
|
Shares issued during the year ended
December 31, 2014
(1)
|
|
Common shares issued
|
444
|
Common shares issued for warrants exercised
|
84
|
Shares issued under equity incentive plan
|
10
|
Shares issued during the year ended
December 31, 2015:
(2)
|
|
Common shares issued
|
351
|
Common shares issued for warrants exercised
|
14
|
Shares issued under equity incentive plan
|
61
|
Shares issued during the year ended
December 31, 2016:
(3)
|
|
Common shares issued
|
605
|
Common shares issued for warrants exercised
|
140
|
Shares issued under equity incentive plan
|
109
|
Shares issued during the year ending
December 31, 2017:
(4)
|
|
Common shares issued
|
3,749
|
Shares issued under equity incentive plan
|
185
|
_______________
(1)
|
On December 1, 2014, the Company completed its
acquisition of Overland. The acquisition was carried out pursuant to the
terms and conditions contained in an Agreement and Plan of Merger dated
May 15, 2014 (as amended, the merger agreement). Under the terms of the
merger agreement, Sphere 3D issued a total of 342,275 common shares for
all of the outstanding Overland shares on the basis of one Overland share
for 11.59625 common shares.
|
|
|
|
On March 21, 2014, the Company acquired from V3 Systems
certain Virtual Desktop Infrastructure (VDI) technology, including
Desktop Cloud Orchestrator
®
software, which allows
administrators to manage local, cloud hosted, or hybrid virtual desktop
deployments, and a series of purpose-built, compact, efficient and
easy-to-manage servers. The purchase price for the acquired technology
assets of V3 Systems was $14.4 million, consisting of $4.2 million in cash
and the issuance of 43,595 of our common shares at $148.00.
|
|
|
|
The Company issued 3,484 in connection with its election
to pay accrued and outstanding interest under the convertible debenture
either entirely in cash or common shares.
|
|
|
|
The Company issued 72,160 common shares in connection
with the exercise of warrants issued in a private placement relating to
the companys acquisition of Sphere 3D Inc. in 2012 and a concurrent
financing. The warrants were exercisable to purchase one common share at a
purchase price of $25.00. Additionally, the company issued 11,880 common
shares in connection with the exercise of warrants issued in connection
with a November 2013 underwritten financing for the sale of 50,000 units
that included one common share and one-half of one common share purchase
warrant, at a price of $83.75 per unit of gross proceeds of $4,187,500.
Each such warrant was exercisable to acquire one common share at a
purchase price of $112.50.
|
|
|
(2)
|
In May and June 2015, we completed private placements for
a total of 64,850 common shares of the Company and warrants to purchase up
to 64,850 common shares for a gross purchase price of approximately $5.2
million (the May 2015 Private Placement). The purchase price for one
common share and a warrant to purchase one common share was $80.00. The
warrants have an exercise price of $100.00 per share and a five-year term.
These warrants have no anti-dilution provisions. We filed a registration
statement to register the resale of the shares to be issued in the
offering and the shares issuable upon exercise of the warrants with the
U.S. Securities and Exchange Commission (SEC).
|
14
|
In August 2015, we completed a private placement of
24,242 common shares of the Company and warrants to purchase up to 24,242
common shares for a gross purchase price of approximately $2.0 million
(the August 2015 Private Placement). The purchase price for one common
share and a warrant to purchase one common share was $82.50. The warrants
had an exercise price of $82.50 per share and a five-year term. We have
the right to force the exercise of the warrants if the weighted average
price of the common shares for 10 consecutive trading days exceeds 400% of
$58.25. In September 2015, we issued an additional 10,092 common shares
and 10,092 warrants to purchase 10,092 common shares in conjunction with
the price protection clause in effect through December 31, 2015 and the
equity financing completed in September 2015. In December 2015, we issued
an additional 5,665 common shares and 5,665warrants to purchase
5,665common shares in conjunction with the price protection clause and the
equity financing completed in December 2015. The purchase price for one
common share and a warrant to purchase one common share was adjusted to
$58.25. We filed a registration statement to register the resale of the
shares to be issued in the offering and the shares issuable upon exercise
of the warrants with the SEC.
|
|
|
|
On August 10, 2015, we completed an acquisition of assets
related to the RDX® removable disk product lines from Imation Corp.
(Imation). We issued 61,165 common shares with an approximate value of
$6.1 million, and a warrant exercisable for 10,000 additional common
shares exercisable in connection with certain purchase price adjustments
under the asset purchase agreement. In February 2016, Imation exercised
the warrant and we issued 10,000 common shares at $0.25.
|
|
|
|
In September and October 2015, we entered into
subscription agreements with certain investors pursuant to which we
issued, in the aggregate, 56,718 common shares, warrants exercisable to
purchase up to 14,180 common shares, and adjustment warrants (the
Adjustment Warrants) for an aggregate offering price of approximately
$3.3 million (the October 2015 Registered Direct Offering). The purchase
price for one common share, a warrant to purchase one quarter of one
common share (the Warrant Shares), and an Adjustment Warrant was $58.25.
The Adjustment Warrants become exercisable to purchase a number of common
shares to be determined at such time following an additional financing by
the Company prior to December 31, 2015. Each warrant has an initial
exercise price of $58.25 per Warrant Share. The warrants are immediately
exercisable and have a five-year term. Each Adjustment Warrant has an
initial exercise price of $0.25 per common share. In December 2015, we
issued an additional 51,897 warrants to purchase 51,897 common shares in
connection with the price protection clauses in effect through December
31, 2015 and the equity financing completed in December 2015. Each warrant
has an exercise price of $58.25. In December 2015, we issued 9,359
Adjustment Warrants to purchase 9,359 common shares in conjunction with
the equity financing completed in December 2015. In January 2016, 9,062
Adjustment Warrants were exercised at $0.25 per common share. The
remaining Adjustment Warrants expired on March 31, 2016.
|
|
|
|
In December 2015, we completed an equity financing of
101,100 common shares and warrants to purchase up to 101,100 common shares
for a gross purchase price of approximately $5.1 million (the December
2015 Registered Direct Offering). The purchase price for one common share
and a warrant to purchase one common share was $50.00. The warrants have
an exercise price of $62.50 per share and a five-year term. We have the
right to force the exercise of the warrants if the weighted average price
of the common shares for 10 consecutive trading days exceeds 400% of
$44.75. Warrants to purchase up to 60,000 common shares include a one-time
adjustment provision, as defined in the agreement, which provides that the
exercise price will be automatically adjusted, if the adjustment price as
calculated on May 28, 2016, is less than $62.50.
|
|
|
|
The Company issued 26,738 common shares in connection
with its election to pay accrued and outstanding interest under the
convertible debenture either entirely in cash or common shares.
|
|
|
|
The Company issued 13,963 common shares in connection
with the exercise of warrants issued in connection with a November 2013
underwritten financing for the sale of 50,000 units that included one
common share and one-half of one common share purchase warrant, at a price
of $83.75 per unit of gross proceeds of $4,187,500. Each such warrant was
exercisable to acquire one common share at a purchase price of
$112.50.
|
|
|
(3)
|
In March 2016, the company issued 1,200 shares in
connection with subscription agreements dated December 2015 and entered
into in connection with the December 2015 Registered Direct
Offering.
|
15
|
In March 2016, the Company entered into a warrant
exchange agreement with MF Ventures, LLC (MF Ventures), a related party,
pursuant to which the Company agreed to issue a warrant (the New
Warrant) for the purchase of up to 287,969 common shares (the Warrant
Shares) in exchange for the surrender and cancellation of previously
outstanding warrants for the purchase of up to, in aggregate, 121,250
common shares (the Previously Outstanding Warrants) (the March 2016
Warrant Exchange). The terms of the New Warrant are substantially similar
to the Previously Outstanding Warrants except the exercise price has
changed to $30.50 per common share. On March 25, 2016, MF Ventures
exercised 121,250 of the Warrant Shares for 121,250 common shares pursuant
to which the Company received $3.7 million in proceeds. The expiration
date for the remaining balance of the New Warrant is March 25, 2021. The
New Warrant was amended on July 11, 2017 to provide the Company the right
to exchange the warrants for common shares (the MFV Amended Warrant) and
on or about July 20, 2017, the Company notified MF Ventures of its intent
to exchange the MFV Amended Warrant, for common shares which exchange
automatically occurred on the third business day after such notice was
given (the MFV Warrant Exchange).
|
|
|
|
In January 2017, the Company completed its acquisition
(the Acquisition) of all of the outstanding equity interests of HVE
ConneXions, LLC and Unified ConneXions, Inc. (the Sellers). The Company
initially purchased 19.9% of the outstanding equity interests of the
Sellers in December 2016, and in connection with such purchase, issued
157,895 common shares.
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|
|
|
Between December 2016 and March 16, 2017, the Company
completed private placements and issued a total of 725,599 Units at a
purchase price of $7.50 per Unit (the December 2016 to March 2017 Private
Placement). Each Unit consisted of one common share and one warrant from
each of two series of warrants, as described below. The Company received
gross proceeds of $5.4 million in connection with the sale of the Units.
The first series of warrants is exercisable to purchase 725,599 common
shares in the aggregate and has an exercise price of $10.00 per share, a
one-year term, and is exercisable in whole or in part at any time prior to
expiration. The second series of warrants is exercisable for 725,599
common shares in the aggregate and has an exercise price of $13.75 per
share, a five-year term, and is exercisable in whole or in part at any
time prior to expiration. In December 2016, the Company issued 277,333
common shares under the Units described above.
|
|
|
|
The company issued 124,205 in connection with its
election to pay accrued and outstanding interest under the convertible
debenture either entirely in cash or common shares.
|
|
|
|
In February 2016, the company issued 10,000 common shares
upon exercise, at a price of $0.25 per common share, of warrants issued in
connection with the Companys August 2015 acquisition of assets related to
the RDX® removable disk product lines and related inventory from Imation
Corp. Additionally, the company issued 9,062 common shares in connection
with the exercise of adjustment warrants issued in connection with the
Companys October 2015 registered direct offering of, in the aggregate,
56,718 of the Companys common shares, warrants exercisable to purchase up
to 14,180 common shares, and adjustment warrants. The purchase price for
one common share, a warrant to purchase one quarter of one common share,
and an adjustment warrant was $58.25. Each adjustment warrant had an
initial exercise price of $0.25 per common share.
|
|
|
(4)
|
In connection with the December 2016 to March 2017
Private Placement, from January 2017 to March 2017, the Company issued
448,267 common shares and the warrants under the Units described in the
footnote above. The warrants were amended on July 11, 2017 to provide the
Company the right to exchange the warrants for common shares (the Amended
and Restated Warrants) and between July 14, 2017 and July 20, 2017, the
Company notified the holders of the Amended and Restated Warrants of its
intent to exchange all of the Amended and Restated Warrants, for common
shares which exchange automatically occurred on the third business day
after such notice was given (the Warrant Exchange). Between July 19 and
July 26, 2017, the Company issued 1,451,198 shares under the Warrant
Exchange.
|
|
|
|
In January 2017, the Company completed the Acquisition,
and in connection with such purchase of the remaining outstanding equity
interests of the Sellers, issued 88,235 common shares.
|
|
|
|
In March 2017, the Company completed a registered direct
offering of 818,181 of the Companys common shares, and warrants
exercisable to purchase up to 818,181 of the Companys common shares, at
an exercise price of $7.50 per share (the March 2017 Offering). The
Company sold the common shares at a price of $5.50 per share, and received
gross proceeds from the offering, before deducting placement agent fees
and other estimated offering expenses payable by the Company, of approximately
$4,500,000.
|
16
The Company issued 176,317 common
shares in connection with its election to pay accrued and outstanding interest
under the convertible debenture either entirely in cash or common shares.
On July 26, 2017, the Company issued
166,719 shares under the MFV Warrant Exchange described above.
In August, the Company completed a
private placement of 600,000 of the Companys common shares and warrants
exercisable to purchase up to 600,000 shares, at an exercise price of $5.50 per
share (the August 2017 Offering). The Company sold the common shares at a
price of $5.00 per share and received gross proceeds of $3,000,000.
At August 22, 2017, the Company had the following outstanding
warrants to purchase common shares:
|
|
Contractual
|
|
Exercise
|
|
Number
|
|
|
Date
issued
|
|
life (years)
|
|
price
|
|
outstanding
|
|
Expiration
|
February 2015
(1)
|
|
3
|
|
$112.50
|
|
4,000
|
|
February 20, 2018
|
March 2015
(2)
|
|
3
|
|
$180.25
|
|
4,000
|
|
March 6, 2018
|
March 2015
(3)
|
|
3
|
|
$125.50
|
|
4,000
|
|
March 20, 2018
|
May 2015
(4)
|
|
5
|
|
$100.00
|
|
33,600
|
|
May 31, 2020
|
October 2015
(5)
|
|
5
|
|
$58.25
|
|
16,077
|
|
October 14, 2020
|
December 2015
(6)
|
|
3
|
|
$38.50
|
|
20,000
|
|
December 21, 2018
|
December 2015
(7)
|
|
5
|
|
$62.50
|
|
41,100
|
|
December 15, 2020
|
December 2015
(8)
|
|
5
|
|
$27.00
|
(9)
|
60,000
|
(10)
|
December 4, 2020
|
January 2016
(11)
|
|
3
|
|
$51.50
|
|
3,539
|
|
November 30, 2018
|
February 2016
(12)
|
|
3
|
|
$40.50
|
|
20,000
|
|
February 26, 2019
|
March 2016
(13)
|
|
5
|
|
$62.50
|
|
1,200
|
|
March 4, 2021
|
November 2016
(14)
|
|
3
|
|
$50.00
|
|
1,000
|
|
November 8, 2019
|
December 2016
(15)
|
|
6
|
|
$0.25
|
|
34,483
|
|
December 30, 2022
|
March 2017
(16)
|
|
6
|
|
$0.25
|
|
15,957
|
|
April 18, 2023
|
March 2017
(17)
|
|
6
|
|
$0.25
|
|
35,242
|
|
June 1, 2023
|
March 2017
(18)
|
|
5
|
|
$5.00
|
|
1,300,910
|
(19)
|
March 24, 2022
|
August 2017
(20)
|
|
|
|
$5.50
|
|
600,000
|
(21)
|
|
|
|
|
|
|
|
2,195,108
|
|
|
____________________
(1)
|
Issued to FBC Holdings in connection with draws on a
revolving credit facility.
|
|
|
(2)
|
Issued to FBC Holdings in connection with draws on a
revolving credit facility.
|
|
|
(3)
|
Issued to FBC Holdings in connection with draws on a
revolving credit facility.
|
|
|
(4)
|
Issued in connection with the May 2015 Private
Placement.
|
|
|
(5)
|
Issued in connection with the October 2015 Registered
Direct Offering.
|
|
|
(6)
|
Issued in connection with the December 2015 Registered
Direct Offering.
|
|
|
(7)
|
Issued in connection with the December 2015 Registered
Direct Offering.
|
|
|
(8)
|
Issued in connection with the December 2015 Registered
Direct Offering.
|
|
|
(9)
|
Include a one-time adjustment provision, as defined in
the agreement, which provided that the exercise price would be
automatically adjusted, if the adjustment price as calculated on May 28,
2016, was less than $62.50. On May 28, 2016, the exercise price was
adjusted to $27.00 for the one-time adjustment provision.
|
|
|
(10)
|
If the Company or any subsidiary thereof, at any time
while this warrant is outstanding, enters into a Variable
Rate Transaction (as defined in the related purchase
agreement) and the issue price, conversion price or exercise price per
share applicable thereto is less than the warrant exercise price then in
effect, the exercise price shall be reduced to equal the VRT
price.
|
17
(11)
|
Issued in connection with the December 2015 Registered
Direct Offering.
|
|
|
(12)
|
Issued to FBC Holdings in connection with the November
2015 modification of certain terms in the companys convertible
note.
|
|
|
(13)
|
Issued in connection with the December 2015 Registered
Direct Offering.
|
|
|
(14)
|
Issued to Peter Smiechowski in connection with
compensation for consulting services.
|
|
|
(15)
|
Issued in connection with the First Amendment entered
into with Opus Bank.
|
|
|
(16)
|
Issued in connection with the Second Amendment entered
into with Opus Bank.
|
|
|
(17)
|
Issued in connection with the Second Amendment entered
into with Opus Bank.
|
|
|
(18)
|
Issued in connection with the March 2017
Offering.
|
|
|
(19)
|
If at any time while these warrants are outstanding, the
Company sells or grants options to purchase, reprices or otherwise issues
any common shares or securities convertible into common shares at a price
less than $7.50, then the exercise price for the Warrants will be reduced
to such price, provided that the exercise price will not be lower than
$0.10, and the number of common shares issuable under the Warrants will be
increased such that, after taking into account the decrease in the
exercise price, the aggregate exercise price under the Warrants will
remain the same. In August 2017, the Warrants were amended as set forth
above upon completion of the August 2017 Offering. In addition, upon the
occurrence of certain fundamental transactions, including certain mergers,
sales of substantially all of our assets or those of our significant
subsidiaries, and other significant corporate events, the warrant holders
will have certain rights, including for the exchange of the Warrants for
warrants to purchase common shares of the successor entity and the right
to have the Company purchase the warrants for their Black Scholes
Value.
|
|
|
(20)
|
Issued in connection with the August 2017
Offering.
|
|
|
(21)
|
At any time until December 31, 2017, if the Company sells
or grants options to purchase, reprice or otherwise issue any common
shares or securities convertible into common shares at a price less than
$5.00, subject to certain exempted issuances, then the exercise price for
the Warrants will be adjusted to a price that is equal to 105% of such
lower price.
|
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. Sphere 3D relied upon this exemption in connection with the
integrated offerings of common shares and warrants to purchase common shares
consummated in September, October, and December 2015; in connection with the
warrant exchange in March 2016; and the integrated offerings of common shares
and warrants to purchase common shares consummated in the period between
December 2016 and March 2017.
18
PLAN OF DISTRIBUTION
The selling shareholders may, from time to time, sell, transfer
or otherwise dispose of any or all of their common shares and warrants or
interests in common shares and warrants on any stock exchange, market or trading
facility on which the common shares or warrants 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 securities being offered by this prospectus may be sold:
|
|
through agents;
|
|
|
|
|
|
to or through one or more
underwriters on a firm commitment or agency basis;
|
|
|
|
|
|
through put or call option
transactions relating to the securities;
|
|
|
|
|
|
through broker-dealers (acting as
agent or principal);
|
|
|
|
|
|
directly to purchasers, through a
specific bidding or auction process, on a negotiated basis or otherwise;
|
|
|
|
|
|
through any other method
permitted pursuant to applicable law; or
|
|
|
|
|
|
through a combination of any such
methods of sale.
|
At any time a particular offer of the securities covered by
this prospectus is made, a revised prospectus or prospectus supplement, if
required, will be distributed which will set forth the aggregate amount of
securities covered by this prospectus being offered and the terms of the
offering, including the name or names of any underwriters, dealers, brokers or
agents, any discounts, commissions, concessions and other items constituting
compensation from us and any discounts, commissions or concessions allowed or
reallowed or paid to dealers. Such prospectus supplement, if required, and, if
necessary, a post-effective amendment to the registration statement of which
this prospectus is a part, will be filed with the SEC to reflect the disclosure
of additional information with respect to the distribution of the securities
covered by this prospectus. In order to comply with the securities laws of
certain states, if applicable, the securities sold under this prospectus may
only be sold through registered or licensed broker-dealers. In addition, in some
states the securities may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from registration or
qualification requirements is available and is complied with. Any public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
The distribution of securities may be effected from time to
time in one or more transactions, including block transactions and transactions
on The NASDAQ Capital Market or any other organized market where the securities
may be traded. The securities may be sold at a fixed price or prices, which may
be changed, or at market prices prevailing at the time of sale, at prices
relating to the prevailing market prices or at negotiated prices. The
consideration may be cash or another form negotiated by the parties. Agents,
underwriters or broker-dealers may be paid compensation for offering and selling
the securities. That compensation may be in the form of discounts, concessions
or commissions to be received from the selling shareholders or the purchasers of
the securities. Any dealers and agents participating in the distribution of the
securities may be deemed to be underwriters, and compensation received by them
on resale of the securities may be deemed to be underwriting discounts. If any
such dealers or agents were deemed to be underwriters, they may be subject to
statutory liabilities under the Securities Act.
Agents may from time to time solicit offers to purchase the
securities. If required, we will name in the applicable prospectus supplement
any agent involved in the offer or sale of the securities and set forth any
compensation payable to the agent. Unless otherwise indicated in a prospectus
supplement, any agent will be acting on a best efforts basis for the period of
its appointment. Any agent selling the securities covered by this prospectus may
be deemed to be an underwriter, as that term is defined in the Securities Act,
of the securities.
If underwriters are used in a sale, securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale, or other
contractual commitments. Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. If an underwriter or
underwriters are used in the sale of securities, an underwriting agreement will
be executed with the underwriter or underwriters, as well as any other
underwriter or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the
transactions, including compensation of the underwriters and dealers and the
public offering price, if applicable. The prospectus and, if required,
prospectus supplement will be used by the underwriters to resell the securities.
19
If a dealer is used in any sale of the securities, the selling
shareholders or an underwriter will sell the securities to the dealer, as
principal. The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale.
To the extent required, we will set forth in a prospectus
supplement the name of the dealer and the terms of the transactions. The selling
shareholders may directly solicit offers to purchase the securities and may make
sales of securities directly to institutional investors or others. These persons
may be deemed to be underwriters within the meaning of the Securities Act with
respect to any resale of the securities. To the extent required, a prospectus
supplement will describe the terms of any such sales, including the terms of any
bidding or auction process, if used.
Agents, underwriters and dealers may be entitled under
agreements which may be entered into with us or the selling shareholders to
indemnification by us and the selling shareholders against specified
liabilities, including liabilities incurred under the Securities Act, or to
contribution by us or the selling shareholders to payments they may be required
to make in respect of such liabilities. If required, a prospectus supplement
will describe the terms and conditions of the indemnification or contribution.
Some of the agents, underwriters or dealers, or their affiliates may be
customers of, engage in transactions with or perform services for us or our
subsidiaries.
Any person participating in the distribution of securities
registered under the registration statement that includes this prospectus will
be subject to applicable provisions of the Exchange Act and the applicable SEC
rules and regulations, including, among others, Regulation M, which may limit
the timing of purchases and sales of any of our securities by that person.
Furthermore, Regulation M may restrict the ability of any person engaged in the
distribution of our securities to engage in market-making activities with
respect to our securities. These restrictions may affect the marketability of
our securities and the ability of any person or entity to engage in
market-making activities with respect to our securities.
Certain persons participating in an offering may engage in
over-allotment, stabilizing transactions, short-covering transactions and
penalty bids that stabilize, maintain or otherwise affect the price of the
offered securities. These activities may maintain the price of the offered
securities at levels above those that might otherwise prevail in the open
market, including by entering stabilizing bids, effecting syndicate covering
transactions or imposing penalty bids, each of which is described below.
|
|
A stabilizing bid means the placing of any bid, or the
effecting of any purchase, for the purpose of pegging, fixing or
maintaining the price of a security.
|
|
|
|
|
|
A syndicate covering transaction means the placing of any
bid on behalf of the underwriting syndicate or the effecting of any
purchase to reduce a short position created in connection with the
offering.
|
|
|
|
|
|
A penalty bid means an arrangement that permits the
managing underwriter to reclaim a selling concession from a syndicate
member in connection with the offering when offered securities originally
sold by the syndicate member are purchased in syndicate covering
transactions.
|
These transactions may be effected on an exchange, if the
securities are listed on that exchange, or in the over-the-counter market or
otherwise.
Any underwriters to whom offered securities are sold for public
offering and sale may make a market in such offered securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice.
Any securities that qualify for sale pursuant to Rule 144 or
Regulation S under the Securities Act, may be sold under Rule 144 or Regulation
S rather than pursuant to this prospectus.
To the extent that the selling shareholders make sales to or
through one or more underwriters or agents in at-the-market offerings, the
selling shareholders will do so pursuant to the terms of a distribution
agreement among us, the selling shareholders and the underwriters or agents. If
the selling shareholders engage in at-the-market sales pursuant to a
distribution agreement, the selling shareholders will sell our common shares and
warrants to or through one or more underwriters or agents, which may act on an
agency basis or on a principal basis. During the term of any such agreement, the
selling shareholders may sell common shares and warrants on a daily basis in exchange
transactions or otherwise as the selling shareholders agree with the
underwriters or agents. The distribution agreement will provide that any common
shares or warrants sold will be sold at prices related to the then prevailing
market prices for our common shares and warrants. Therefore, exact figures
regarding proceeds that will be raised or commissions to be paid cannot be
determined at this time and will be described in a prospectus supplement.
Pursuant to the terms of the distribution agreement, the selling shareholders
also may agree to sell, and the relevant underwriters or agents may agree to
solicit offers to purchase, blocks of our common shares and warrants. The terms
of each such distribution agreement will be set forth in more detail in a
prospectus supplement to this prospectus.
20
In the event that any underwriter or agent acts as principal,
or broker-dealer acts as underwriter, it may engage in certain transactions that
stabilize, maintain or otherwise affect the price of our securities. We will
describe any such activities in the prospectus supplement relating to the
transaction.
The selling shareholders may enter into derivative transactions
with third parties or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable prospectus
supplement indicates, in connection with those derivatives, such third parties
(or affiliates of such third parties) may sell securities covered by this
prospectus and the applicable prospectus supplement, including in short-sale
transactions. If so, such third parties (or affiliates of such third parties)
may use securities pledged by the selling shareholders or borrowed from the
selling shareholders or others to settle those sales or to close out any related
open borrowings of shares, and may use securities received from the selling
shareholders in settlement of those derivatives to close out any related open
borrowings of shares. The third parties (or affiliates of such third parties) in
such sale transactions will be underwriters and, if not identified in this
prospectus, will be identified in a prospectus supplement (or a post-effective
amendment), if required.
The selling shareholders may loan or pledge securities to a
financial institution or other third party that in turn may sell or transfer the
securities using this prospectus. Such financial institution or third party may
transfer its short position to investors in our securities or in connection with
a simultaneous offering of other securities offered by this prospectus or in
connection with a simultaneous offering of other securities offered by this
prospectus.
We cannot advise you as to whether the selling shareholders
will, in fact, sell or transfer any or all of such shares, and the selling
shareholders are not obligated to do so pursuant to this registration statement
and may retain their common shares or warrants.
21
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.
EXPENSES
The following table lists the costs and expenses payable by us
in connection with the potential sale of the common shares and warrants 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. Any 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
|
$
|
1,468
|
|
|
Legal fees and expenses
|
|
40,000
|
|
|
Accounting fees and expenses
|
|
5,000
|
|
|
Miscellaneous expenses
|
|
3,000
|
|
|
Total
|
$
|
49,468
|
|
22
LEGAL MATTERS
The validity of the common shares and warrants 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, 2016 and 2015, and for each
of the three years in the period ended December 31, 2016, included in our Annual
Report on Form 20-F for the year ended December 31, 2016, as set forth in its
report, which is incorporated by reference in this prospectus and elsewhere in
the registration statement of which this prospectus forms a part. Further, Moss
Adams has audited the consolidated financial statements of Overland Storage,
Inc., as of June 30, 2014 and 2013, and for the years then ended, included in
our Form F-4, as set forth in its report, which is incorporated by reference in
this prospectus and elsewhere in the registration statement of which this
prospectus forms a part. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
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.
23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8.
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).
Item 9.
Exhibits
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.
Item 10.
Undertakings
(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 high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration statement; and
(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.
24
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.
(b) That, for the purpose of determining liability of a
registrant under the Securities Act to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
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1.
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any preliminary prospectus or prospectus of the
undersigned registrant to the offering required to be filed pursuant to
Rule 424;
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2.
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any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used or referred
to by an undersigned registrant;
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3.
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the portion of any other free writing prospectus relating
to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned
registrant; and
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25
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4.
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any other communication that is an offer in the offering
made by the undersigned registrant to the
purchaser.
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(c) 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.
(d) 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.
(e) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time it was
declared effective.
(f) The undersigned registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus 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.
26
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 23rd
day of August, 2017.
SPHERE 3D CORP.
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By:
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/s/
ERIC L. KELLY
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Eric L. Kelly
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Chief Executive Officer
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POWER OF ATTORNEY
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
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Title
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Date
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/s/ ERIC L. KELLY
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Chairman of the Board and Chief
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August 23, 2017
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Executive Officer
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Eric L. Kelly
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Principal Executive Officer
)
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/s/ KURT L.
KALBFLEISCH
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Chief Financial Officer
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August 23, 2017
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Kurt L. Kalbfleisch
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(
Principal Financial and Accounting
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Officer
)
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*
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Director
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August 23, 2017
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Dr. Cheemin Bo-Linn
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*
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Director
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August 23, 2017
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Vivekanand Mahadevan
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*
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Director
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August 23, 2017
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Duncan McEwan
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*
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Director
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August 23, 2017
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Peter Tassiopoulos
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*By:
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/s/ ERIC L. KELLY
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Eric L. Kelly
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Attorney-in-Fact
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/s/ KURT L. KALBFLEISCH
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Kurt L. Kalbfleisch
|
|
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Attorney-in-Fact
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27
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28
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