Sphere 3D Announces Warrant Exchange to Simplify Capital Structure
March 16 2018 - 6:19PM
Sphere 3D Corp. (NASDAQ:ANY), a containerization,
virtualization, and data management solutions provider (the
“Company”), today announced that it entered into warrant exchange
agreements with certain existing holders of its outstanding
warrants, pursuant to which the Company agreed to issue 1.1 common
shares, no par value, of the Company (the “Common Shares”) for each
warrant issued under certain purchase agreements entered into in
March 2017 (the “Warrant Exchange”).
The Warrant Exchange was a privately negotiated exchange under
Section 4(a)(2) and Rule 144(d)(3)(ii) of the Securities Act
of 1933, as amended, for the surrender and cancellation of
previously outstanding warrants for the purchase of up to, in
aggregate, 1,300,910 Common Shares. The Company will issue an
aggregate of 1,430,998 Common Shares in the Warrant Exchange.
The Warrant Exchange is intended to improve the financial
flexibility of the Company by removing potentially dilutive effects
of certain provisions in such previously outstanding warrants in
the event of certain equity issuances.
MF Ventures, LLC, which beneficially owns, directly or
indirectly, securities of the Company carrying more than 10% of the
voting rights attached to the outstanding voting securities of the
Company (on a partially-diluted basis), will participate in the
Warrant Exchange by acquiring 299,999 Common Shares. As a
result, the participation of MF Ventures, LLC constitutes a
"related party transaction" within the meaning of Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions ("MI 61-101"). The Company intends to file a
material change report in connection therewith with the applicable
Canadian securities regulatory authorities. However, such material
change report will not be filed at least 21 days before the
completion of the Warrant Exchange in order to allow the Company to
secure the opportunity to eliminate the warrants so exchanged from
its capital structure. The Company is relying on the
exemptions from the "formal valuation" and "minority approval"
requirements under MI 61-101, respectively, based on the fact that
the subject matter of, or consideration for, the Warrant Exchange
insofar as it involves interested parties, as determined in
accordance with MI 61-101, does not exceed 25% of the market
capitalization of the Company, as determined in accordance with MI
61-101.
About Sphere 3D Sphere 3D
Corp. (NASDAQ:ANY) delivers containerization, virtualization,
and data management solutions via hybrid cloud, cloud and
on-premises implementations through its global reseller network and
professional services organization. Sphere 3D, along with its
wholly owned subsidiaries Overland Storage and Tandberg
Data, has a strong portfolio of brands, including
Overland-Tandberg, HVE ConneXions and UCX
ConneXions, dedicated to helping customers achieve their IT goals.
For more information, visit www.sphere3d.com. Follow us on
Twitter @Sphere3D, @HVEconneXions, @ovltb.
Safe Harbor Statement This
press release contains forward-looking statements, which include,
among others, Sphere 3D’s expectations, beliefs, plans, objectives,
prospects, financial condition, assumptions or future events or
performance, that may involve risks, uncertainties, and assumptions
concerning the Company’s business and products, including the entry
into a definitive agreement with Silicon Valley Technology Partners
(“SVTP”), pursuant to which SVTP proposes to acquire the Data
Protection and Archive business from Sphere 3D; the
market adoption, actual performance and functionality of our
products; our inability to comply with the covenants in our credit
facilities or to obtain additional debt or equity financing; any
increase in our future cash needs; our ability to maintain
compliance with NASDAQ Capital Market listing requirements;
unforeseen and proposed changes in the course of Sphere 3D’s
business or the business of its wholly-owned subsidiaries,
including, without limitation, Overland Storage and Tandberg Data;
the level of success of our collaborations and business
partnerships; possible actions by customers, partners, suppliers,
competitors or regulatory authorities; and other risks detailed
from time to time in our periodic reports contained in our Annual
Information Form and other filings with Canadian securities
regulators (www.sedar.com) and in periodic reports filed with the
United States Securities and Exchange Commission
(www.sec.gov). All forward-looking statements speak only as
of the date of this written communication. Sphere 3D undertakes no
obligation to update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise, except as
required by law.
Investor Contact:The Blueshirt
GroupLauren SloaneTel: +1 415-217-2632Lauren@blueshirtgroup.com
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