As filed with the Securities and Exchange Commission on April
28, 2017
Registration No.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
20549
FORM F-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
SPHERE 3D CORP.
(Exact
name of registrant as specified in its charter)
Not Applicable
(Translation of Registrants name
into English)
Ontario, Canada
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240 Matheson Blvd. East
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98-1220792
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(State or other jurisdiction of
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Mississauga, Ontario L4Z 1X1
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(I.R.S. Employer
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Incorporation or Organization)
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(858) 571-5555
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Identification No.)
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(Address and telephone number of
Registrants
principal executive offices)
Eric L. Kelly
Chief Executive Officer
9112 Spectrum Center Boulevard
San Diego, California
92123
(858) 571-5555
(Name, address, and telephone number
of agent for service)
Copy to:
Warren T. Lazarow, Esq.
Paul L. Sieben, Esq.
OMelveny & Myers LLP
2765 Sand Hill Road
Menlo Park, California 94025
(650) 473-2600
Approximate date of commencement of proposed sale to the
public:
From time to time after the effective date of this registration
statement.
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933 check the following box.
[X]
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a 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)
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per unit(2)
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offering price(2)
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registration
fee
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Secondary Shares
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Common Shares, no
par value per share
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22,415,550
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$0.20
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$4,483,110
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$520
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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 common shares issuable upon exercise of warrants previously
issued to the selling shareholders. The number of common shares registered
hereunder includes 700,000 common shares, which represents a good faith
estimate by us, accounting for market fluctuations, of the number of
common shares issuable upon exercise of the Second Additional Warrant to
Purchase common shares dated March 12, 2017 issued by the Company to Opus
Bank.
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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 $0.20 and
low $0.19 sales prices of the registrants common shares on The NASDAQ
Capital Market on April 24, 2017. The registrant is not selling any common
shares in this offering and, therefore, will not receive any proceeds from
this offering.
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The registrant hereby amends
this registration statement on such date or dates as may be necessary to delay
its effective date until the registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until this registration statement shall become effective on such
date as the Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
The information in this prospectus is
not complete and may be changed. The selling shareholders may not sell these
securities pursuant to this prospectus until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities, and the selling shareholders are not
soliciting offers to buy these securities in any state where the offer or sale
of these securities is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 28,
2017
PROSPECTUS
22,415,550 Common Shares
This prospectus relates to the
resale or other disposition by certain selling shareholders identified in this
prospectus, or their transferees, of up to an aggregate of (i) 20,454,546 common
shares issuable upon the exercise of warrants issued to the selling stockholders
in connection with a private placement under a Securities Purchase Agreement
entered into on March 24, 2017 and (ii) 1,961,004 common shares issuable
pursuant to warrants issued to Opus Bank in connection with our Credit
Agreement.
The selling shareholders may,
from time to time, sell, transfer, or otherwise dispose of any or all of their
common shares on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These dispositions may be at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market price, at varying prices determined at the time of sale,
or at negotiated prices. See Plan of Distribution for additional information.
We are not offering any common
shares for sale under this prospectus, and we will not receive any of the
proceeds from the sale or other disposition of the common shares covered hereby.
However, we will receive the exercise price of any warrants exercised for cash.
Our common shares are traded on
The NASDAQ Capital Market under the symbol ANY. On April 24, 2017, the last
reported sale price for our common shares on NASDAQ was $0.20 per share.
We will pay the expenses related
to the registration of the common shares covered by this prospectus. The selling
shareholders will pay any commissions and selling expenses they may incur.
Our business and an investment
in our securities involve significant risks. You should read the section
entitled "
Risk Factors
" on page 8 of this prospectus and
the risk factors incorporated by reference into this prospectus as described in
that section before investing in our securities.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is April 28, 2017.
TABLE OF CONTENTS
i
ABOUT THIS PROSPECTUS
This prospectus is part of a
registration statement on Form F-1 that we filed with the Securities and
Exchange Commission using a shelf registration or continuous offering process.
You should read this prospectus,
the information and documents incorporated by reference, and the additional
information described under the heading Where You Can Find Additional
Information below carefully because these documents contain important
information you should consider when making your investment decision. Whenever
we make reference in this prospectus to any of our contracts, agreements or
other documents, the references are not necessarily complete and you should
refer to the exhibits attached to the registration statement or the documents
incorporated by reference for copies of the actual contract, agreements or other
document. See Where You Can Find More Information and Information
Incorporated by Reference.
You should rely only on the
information provided in this prospectus and the information and documents
incorporated by reference into this prospectus. We have not, and the selling
shareholders have not, authorized anyone to provide you with different
information. This prospectus is not an offer to sell these securities, and the
selling shareholders are not soliciting offers to buy these securities, in any
state where the offer or sale of these securities is not permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of common shares. You should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the front cover of
this prospectus, or that the information contained in any document incorporated
by reference is accurate as of any date other than the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus
or any sale of a security. As described under the heading Incorporation of
Certain Documents By Reference, some of the information contained herein may be
modified or superseded by documents incorporated by reference herein and, to
such extent, you should rely on the later-dated information.
In this prospectus, unless
otherwise indicated or the context otherwise requires, references to Sphere,
we, Company, us, or our refer to Sphere 3D Corp. and its consolidated
subsidiaries, and references to selling shareholders refer to those
shareholders listed herein under Selling Shareholders, and their transferees.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
applicable to foreign private issuers. We anticipate filing with the SEC, within
three months after the end of each fiscal year, an Annual Report on Form 20-F
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. You can
find, copy and inspect information we file with the SEC (including exhibits to
such documents) at the SECs Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain additional information about the Public
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains a site on the Internet at http://www.sec.gov which contains reports
and other information that we file electronically with the SEC. You may also
review such reports and other documents we file with the SEC on our website at
http://www.sphere3d.com. Information included on our website is not a part of
this prospectus. This prospectus is part of a registration statement that we
filed with the SEC. The registration statement contains more information than
this prospectus regarding our common shares and us, including exhibits.
-1-
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by
reference information into this prospectus. This means that we are disclosing
important information to you by referring you to another document that has been
separately filed with or furnished to the SEC. The information incorporated by
reference is considered to be part of this prospectus, and certain information
that we later file with or furnish to the SEC will automatically update and
supersede the information contained in documents earlier filed with or furnished
to the SEC or contained in this prospectus. The following documents filed with
or furnished to the SEC are incorporated herein by reference:
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Our Annual Report on Form 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;
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Our Report of Foreign Private Issuer on Form 6-K (File
No. 001-36532) furnished to the SEC on 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; and
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All Annual Reports on Form 20-F and all Reports of
Foreign Private Issuer on Form 6-K (or portions thereof) that indicate
that they are being incorporated by reference into this registration
statement and that we file with the SEC on or after the date on which the
registration statement is first filed with the SEC until the termination
or completion of the offering under this prospectus.
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Unless otherwise identified,
documents or information deemed to have been furnished and not filed in
accordance with SEC rules shall not be deemed incorporated by reference into
this registration statement. We may incorporate future Reports of Foreign
Private Issuer on Form 6-K (or portions thereof) that we furnish subsequent to
the date of this prospectus by indicating in such Form 6-K (or portions thereof)
that they are being incorporated by reference into this prospectus.
Any statement contained herein or
in a document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this registration statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or amended, to constitute a part of this registration
statement.
You may obtain copies, without
charge, of documents incorporated by reference in this prospectus, by requesting
them in writing or by telephone from us as follows:
Sphere 3D Corp.
240 Matheson Blvd. East
Mississauga,
Ontario L4Z 1X1
Attention: Investor Relations
(800) 729-8725
Exhibits to the filings will not
be sent unless those exhibits have been specifically incorporated by reference
in this prospectus.
-2-
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this
prospectus 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.
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In addition, if any of the
assumptions or estimates made by management prove to be incorrect, actual
results and developments are likely to differ, and may differ materially, from
those expressed or implied by the forward-looking information. Accordingly,
investors are cautioned not to place undue reliance on such statements.
All of this forward-looking
information is qualified by these cautionary statements. Statements containing
forward-looking information are made only as of the date of such document. We
expressly disclaims any obligation to update or alter statements containing any
forward-looking information, or the factors or assumptions underlying them,
whether as a result of new information, future events or otherwise, except as
required by law.
-3-
PROSPECTUS SUMMARY
The following is only a summary
and therefore does not contain all of the information you should consider before
investing in our securities. We urge you to read this entire prospectus,
including the matters discussed under Risk Factors and the risk factors
incorporated by reference into this prospectus as described in that section, and
the more detailed consolidated financial statements, notes to the consolidated
financial statements and other information incorporated by reference from our
other filings with the SEC.
Our Company
We are a virtualization
technology and data management solutions provider with a portfolio of products
that address the complete data continuum. We enable the integration of virtual
applications, virtual desktops, and storage into workflow, and allow
organizations to deploy a combination of public, private or hybrid cloud
strategies. We achieve this through the sale of solutions that are derived from
our primary product groups: disk systems, virtualization, and data management
and storage.
We have a global presence and
maintain offices in multiple locations. Executive offices and our primary
operations are conducted from our San Jose and San Diego, California locations.
Our main office is located at 9112 Spectrum Center Blvd., San Diego, CA 92123.
Our virtualization product development is primarily done from its research and
development center near Toronto, Canada. Our European headquarters are located
in Germany. We maintain additional offices in Singapore, Japan, and the United
Kingdom.
We were incorporated on May 2,
2007 under the Business Corporations Act (Ontario) as T.B. Mining Ventures
Inc.. Our registered office is located at 240 Matheson Blvd. East Mississauga,
Ontario L4Z 1X1 and our main telephone number is (858) 571-5555. Our Internet
address is
http://www.sphere3d.com
. Except for the documents referred to
under Where You Can Find Additional Information which are specifically
incorporated by reference into this prospectus, information contained on our
website or that can be accessed through our website does not constitute a part
of this prospectus. We have included our website address only as an interactive
textual reference and do not intend it to be an active link to our website.
The Offering
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Common shares offered by the selling shareholders,
including common shares issuable upon exercise of the warrants:
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22,415,550
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Common shares to be outstanding after the offering:
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125,296,348
(1)
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NASDAQ Capital Market symbol:
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ANY
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Use of proceeds:
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To the extent that we have received or will receive
additional cash upon exercise of the warrants, we currently expect to use
that cash for general corporate purposes. See Use of Proceeds beginning
on page 15.
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Risk factors:
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See Risk Factors beginning on page 8 and the risk
factors incorporated by reference into this prospectus as described in
that section, and the other information included in this prospectus or
incorporated by reference for a discussion of factors you should consider
before making an investment decision
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(1)
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The number of common shares shown to be outstanding is
based on the number of common shares outstanding as of April 24, 2017,
102,880,798, and excludes as of such date:
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3,163,848 common shares subject to outstanding options
issued to employees and consultants having a weighted- average exercise
price of $2.03 per share;
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3,054,942 common shares reserved for issuance in
connection with future awards under our 2015 Performance Incentive Plan
and 6,437,081 restricted share units outstanding and unreleased under our
stock plans;
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2,000,000 common shares reserved for future sale under
our Employee Stock Purchase Plan; and
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-4-
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68,204,737 common shares issuable pursuant to outstanding
warrants having a weighted-average exercise price of $0.60 per share,
including warrants to purchase up to, in aggregate, 800,000 common shares
issued on February 19, 2015, March 6, 2015, March 20, 2015 and December
2015 to FBC Holdings S.à r.l. in connection with draws on our Revolving
Credit Agreement with FBC (with each such warrants exercise price being
determined by reference to 110% of the closing price for our common shares
on The NASDAQ Global Market on the last complete trading day immediately
prior to issuance) and a warrant to purchase up to, in aggregate, 500,000
common shares issued on February 26, 2016 in connection with
the amendment to our 8% Senior Secured Convertible Debenture with FBC (with each
such warrant's exercise price being determined by reference to 110% of the
closing price for our common shares on the NASDAQ Global Market on the last
complete trading day immediately prior to issuance).
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Unless otherwise indicated, this prospectus supplement reflects
and assumes no exercise of our outstanding warrants or options to purchase
common shares described above.
-5-
Recent Developments
Private Placement and Concurrent Registered Direct
Offering
On March 29, 2017, the Company
closed a registered direct offering of 20,454,546 of the Companys common
shares, no par value per share (the Shares), and warrants (the Warrants)
exercisable to purchase up to 20,454,546 of the Companys common shares, no par
value per share, at an exercise price of $0.30 per share by private placement
(the March Private Placement). The Company sold the Shares at a price of $0.22
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. Roth Capital Partners, LLC acted as the
placement agent for the offering.
Private Placement
Between December 30, 2016 and
March 16, 2017, the Company issued a total of 18,139,998 Units, at a purchase
price of U.S. $0.30 per Unit. Each Unit consisted of one common share and one
warrant from each of two series of warrants. The first series of warrants is
exercisable to purchase 18,139,998 common shares in the aggregate and has an
exercise price of U.S. $0.40 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 18,139,998 common shares in the aggregate and has an exercise
price of U.S. $0.55 per share, a five-year term, and is exercisable in whole or
in part at any time prior to expiration. The Company received gross proceeds of
U.S. $5.4 million in connection with the sale of the Units.
Consent, Waiver, Reaffirmation and Amendment Number One to
Credit Agreement
On April 6, 2016, Overland
Storage, Inc., a California corporation (Overland) and wholly owned subsidiary
of the Company, Tandberg Data GmbH, a limited liability company organized under
the laws of Germany (Tandberg and, together with Overland, collectively the
Borrowers), and Opus Bank, a California commercial bank, as Lender (Lender),
entered into a Credit Agreement (the Credit Agreement) pursuant to which the
Lender provided the Borrowers a $10 Million revolving credit facility and
Overland $10 Million term loan facility. On December 30, 2016, the Borrowers and
Lender entered into a Consent, Waiver, Reaffirmation and Amendment Number One to
Credit Agreement (the First Amendment) pursuant to which (i) the maturity date
for the revolving and term loan credit facilities were amended to be the earlier
of the maturity date in the 8% Senior Secured Convertible Debenture, dated
December 1, 2014, issued to FBC Holdings S.a r.l. (the Debenture), or March
31, 2017, (ii) the Lender granted a waiver of specified defaults under the
Credit Agreement relating to a minimum asset coverage ratio, (iii) the Lender
provided its consent to the consummation of the Acquisition (as defined below),
and (iv) certain other terms of the Credit Agreement were amended, including but
not limited to terms related to collateral coverage, milestone deliverables, and
financial covenants.
Further, as a condition of the
entry into the First Amendment, the Company (i) cancelled the warrant issued to
Lender for the purchase of 1,541,768 common shares at an exercise price of $1.30
per common share and (ii) issued to the Lender a warrant for the purchase of up
to 862,068 common shares at an exercise price of $0.01 per common share. In
addition, the First Amendment warrant provide for piggyback registration
rights. These piggyback registration rights would be triggered by the filing
of a registration statement to register the resale of the warrants and common
shares issuable upon the exercise of the warrants. The exercise price and number
of common shares issuable upon exercise of the warrants may be adjusted in
certain circumstances including in the event of a share dividend, extraordinary
cash dividend or our recapitalization, reorganization, merger or consolidation.
Amendments Number Two and Three to Credit Agreement,
Amendment Number One to Amendment Number 1, Waiver and Reaffirmation and
Amendment Number Four to Credit Agreement and Reaffirmation
On March 12, 2017, the Borrowers
and Lender entered into an Amendment Number Two to Credit Agreement, Amendment
Number One to Amendment Number 1, Waiver and Reaffirmation (the Second
Amendment). On March 21, 2017, the Borrowers and Lender entered into an
Amendment Number Three to Credit Agreement (the Third Amendment) further
amending the Second Amendment. On April 28, 2017, the Borrowers and Lender
entered into an Amendment Number Four to Credit Agreement and Reaffirmation (the
Fourth Amendment and, together with the First Amendment, Second Amendment and
Third Amendment, the Opus Amendments). Under the terms of the Second
Amendment, as modified by the Third Amendment, (i) the maturity date for the
revolving and term loan credit facilities were amended to be the earlier of (a)
the maturity date in the Debenture or (b) (x) June 30, 2017 if the Maturity
Extension Trigger Date (as defined below) occurs on or before March 31, 2017 or
(y) if the Maturity Extension Trigger Date has not occurred by such date, March
31, 2017, (ii) the Lender granted a waiver of specified defaults under the
Credit Agreement relating to obligations to deliver to the Lender an executed
letter of intent with respect to refinancing the credit facility, and (iii)
certain other terms of the Credit Agreement were amended, including but not
limited to terms related to collateral coverage, milestone deliverables, and
financial covenants. The Maturity Extension Trigger Date, which occurred prior
to March 31, 2017, was the date upon which (a) the Company received gross cash
proceeds of at least $3,000,000 from the issuance of the common shares and
related warrants and (b) the Company deposited at least $2,500,000 of the funds
raised in an equity offering into the primary operating account that Overland
maintains at Opus Bank. Pursuant to the Opus Amendments, in the event of certain
specified events of default, including failure to meet certain monthly revenue
and EBITDA targets or failure to retain a financial advisor with respect to a sale of a significant portion of the
Companys assets by June 10, 2017, all amounts under the Credit Agreement may be
accelerated and become immediately payable.
-6-
Further, as a condition of the
entry into the Second Amendment, the Company issued to the Lender (i) a warrant,
exercisable for 398,936 shares at an exercise price of $0.01 per common share
and (ii) a warrant, exercisable in the event that the Company has not repaid all
outstanding amounts due under the Credit Agreement on or prior to May 31, 2017,
for the purchase of the number of common shares determined by dividing (i)
100,000 by (ii) the difference between the market price of our common shares on
May 31, 2017 and $0.01, at an exercise price of $0.01 per common share. In
addition, the warrants provide for piggyback registration rights. These
piggyback registration rights would be triggered by the filing of a
registration statement to register the resale of the warrants and common shares issuable upon the exercise of the warrants. The exercise price and number of
common shares issuable upon exercise of the warrants may be adjusted in certain
circumstances including in the event of a share dividend, extraordinary cash
dividend or our recapitalization, reorganization, merger or consolidation.
Acquisition
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 3,947,368
common shares. In January 2017, in connection with the Companys purchase of the
remaining equity interests of the Sellers, the Company paid to the Sellers
$1,100,000 in cash and issued 2,205,883 common shares.
Grant of Inducement RSUs
In January 2017, we granted
5,156,030 inducement RSUs in connection with the hiring of additional employees,
which will vest over the next one to three years.
-7-
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 the accompanying prospectus supplement. The
risks and uncertainties not presently known to us or that we currently deem
immaterial may also materially harm our business, operating results and
financial condition and could result in a complete loss of your investment.
Risks Related to Our Common Shares and this
Offering
Our share price has been volatile and your investment in
our common shares could decrease in value.
The market price for securities
of technology companies, including ours, historically has been highly volatile,
and the market from time to time has experienced significant price and volume
fluctuations that are unrelated to the operating performance of such companies.
For example, during the 12-month period ended February 28, 2017, our closing
stock price has ranged from a low of $0.20 to a high of $1.97. Fluctuations in
the market price or liquidity of our common shares may harm the value of your
investment in our common shares. You may not be able to resell your common
shares at or above the price you pay for those shares due to fluctuations in the
market price caused by changes in our operating performance or prospects and
other factors, including, among others:
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actual or anticipated fluctuations in our operating
results or future prospects;
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our announcements or our competitors announcements of
new products;
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public reaction to our press releases, our other public
announcements and our filings with the SEC;
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strategic actions by us or our competitors;
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changes in financial markets or general economic
conditions;
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our ability to raise additional capital as needed;
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developments regarding our patents or proprietary rights
or those of our competitors; and
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changes in stock market analyst recommendations or
earnings estimates regarding our common shares, other comparable companies
or our industry generally.
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Future sales of our common shares 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 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.
Excluding the warrants issued
pursuant to the Securities Purchase Agreement and the warrants issued to Opus
Bank, as of April 24, 2017, we have warrants outstanding for the purchase of up
to 46,522,919 common shares having a weighted-average exercise price of $0.74
per share. Our 8% Senior Secured Convertible Debenture is currently convertible
into common shares at a conversion price of $3.00 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.
-8-
Future sales of our securities under certain
circumstances may trigger price-protection provisions in outstanding warrants,
which would dilute your investment and could result in a decline in the trading
price of our common shares.
In connection with our registered
direct offering in December 2015, we issued a warrant exercisable to purchase up
to 1,500,000 common shares that contains certain price protection provisions. If
we, at any time while these warrants are outstanding, effect certain variable
rate transactions and the issue price, conversion price or exercise price per
share applicable thereto is less than the exercise price then in effect for the
warrants, then the exercise price of the warrants will be reduced to equal such
price. 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
$0.30, 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 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.
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 placement in March 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.
-9-
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISORS
The following table sets forth
information with respect to each of the directors and officers of the Company,
who share a business address at 9112 Spectrum Center Blvd, San Diego, CA 92123
USA.
Name
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Position with Sphere 3D
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Peter
Ashkin
(1)(2)(3)
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Director
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Dr. Cheemin Bo-Linn
(1)(2)(3)
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Director
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Eric L. Kelly
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Chief Executive
Officer, Chairman and Director
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Vivekanand Mahadevan
(1)(2)(3)
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Director
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Peter Tassiopoulos
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President, Vice
Chairman and Director
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Kurt L. Kalbfleisch
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Senior Vice President and Chief
Financial Officer
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Randall T. Gast
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Senior Vice
President and Chief Operating Officer
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Jenny C. Yeh
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Vice President, Legal and General
Counsel
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_____________
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(1)
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Member of Audit Committee.
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(2)
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Member of Compensation Committee.
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(3)
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Member of the Nominating and Governance
Committee.
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Peter Ashkin, Director
Mr. Ashkin
member of the
Board and also serves as the Chairman of its Compensation Committee. Mr. Ashkin
has been a Managing Partner of Baker, Cook and Constable LLC, a venture capital
firm that focuses on investing in, and operating high-tech start-up companies
since March 2012 and President of Peter Ashkin Consulting, a consulting agency
that focuses on high-tech startup companies since 2006. Previously, Mr. Ashkin
served as President of the Technology Group for CanWest Mediaworks (2004 -2006),
at that time, Canadas largest media company, with multiple locations across
Canada consisting of newspapers, broadcast television and cable. Prior to
CanWest, Mr. Ashkin served as President of Product Strategy for AOL (America
Online) (2001 -2004), at that time, the worlds largest internet provider. Mr.
Ashkin also served as Senior Vice President and Chief Technology Officer of
Gateway Computer (1998 - 2001) and prior thereto a number of senior and
executive management positions at both Toshiba Corporation and Apple.
Dr. Cheemin Bo-Linn, Director
Dr. Bo-Linn has served as a
member of our Board since April 2017 and also serves as the Chairman of its
Audit Committee. Dr. Bo-Linn is the CEO and President of Peritus Partners Inc.,
an international consulting group focused on leading companies to the next level
growth and increasing business valuation, and has held this position since
January 2013. From September 2010 to November 2012, she was Chief Marketing
Officer, Chief Revenue Officer and consultant at NetLine Corporation, a global
online multi-channel digital media network, mobile applications and content
marketing services company. From July 2006 to August 2010, she was President of
Peritus Partners Inc./BL Group. From June 1980 to June 2006, she held a number
of executive business management roles including IBM Vice-President of
Electronics, and other roles with responsibility ranging from strategy,
marketing, sales, operations and investments across storage and software
products and consulting services. She presently serves on the Advisory Board of
SpeedTrack, a business analytics software company, and Women in Technology
International, an online marketplace for research, publications, media and
career services. She previously served as a member of the Boards of Directors of
Violin Memory, Inc., NetLine Corporation, Association of Corporate Growth-SV,
American Electronics Association and several private companies. She holds a
Doctorate of Education focused on Computer-based Management Information Systems
and Organizational Change from the University of Houston.
-10-
Eric L. Kelly, Chief Executive Officer, Chairman and
Director
Mr. Kelly is a current member of
the Board, has served as its Chairman since July 2013, and also serves as its
Chief Executive Officer since December 1, 2014. Mr. Kelly formerly served as
Chief Executive Officer of Overland since January 2009, President and Chief
Executive Officer of Overland since January 2010 and has been a member of
Overlands board of directors since November 2007. Prior to joining Overland,
Mr. Kelly was President of Silicon Valley Management Partners Inc., a management
consulting and merger and acquisition advisory firm which he co-founded in 2007.
Mr. Kelly is serving a second term on the U.S. Department of Commerces
Manufacturing Council, where he offers advice and counsel to the Obama
Administration on strategies and policy recommendations on ways to promote and
advance U.S. manufacturing globally, and from 2013 to 2014 he was appointed to
President Obamas Advanced Manufacturing Steering Committee. He is a member of
the Global Leadership Council for San Jose State Universitys Lucas College and
Graduate School of Business. Mr. Kelly has spent over 30 years in computer
technology developing distinct operational, marketing and sales expertise. His
previous corporate affiliations include Adaptec Inc., Maxtor Corp., Dell
Computer Corp., Diamond Multimedia, Conner Peripherals and IBM. Mr. Kelly earned
an M.B.A. from San Francisco State University and a B.S. in Business Management
from San Jose State University.
Vivekanand Mahadevan, Director
Mr. Mahadevan has been the Chief
Executive Officer of Dev Solutions, Inc., a consulting firm that helps
technology startups build next-generation market leaders in data analytics,
security, storage and cloud markets since March 2012. Mr. Mahadevan was the
Chief Strategy Officer for NetApp, Inc., a supplier of enterprise storage and
data management software and hardware products and services, from November 2010
until February 2012. Prior to that time served as Vice President of Marketing
for LSI Corporation, an electronics company that designs semiconductors and
software that accelerate storage and networking, from January 2009 to September
2010. Prior to LSI Corporation, he was Chief Executive Officer for Deeya Energy,
Inc., and has also held senior management positions with leading storage and
systems management companies including BMC Software, Compaq, Ivita, and Maxxan
Systems. Mr. Mahadevan is also a current board member of Violin Memory, Inc. Mr.
Mahadevan holds an M.B.A. in Marketing and MS in Engineering from the University
of Iowa as well a degree in Mechanical Engineering from the Indian Institute of
Technology.
Peter Tassiopoulos, President, Vice Chairman and
Director
Mr. Tassiopoulos is a current
member of the Board and has served as President of the Company since December 1,
2014. Mr. Tassiopoulos served as the Chief Executive Officer of the Company from
March 2013 until December 1, 2014. Mr. Tassiopoulos has extensive experience in
information technology business development and global sales as well as a
successful track record leading early-stage technology companies. He has been
actively involved as a business consultant over the past 10 years, including
acting as Chief Operating Officer and then Chief Executive Officer of BioSign
Technologies Inc. from September 2009 to April 2011 and Chief Executive Officer
of IgeaCare Systems Inc. from February 2003 to December 2008. Mr. Tassiopoulos
is also a current board member of Northern Sphere Mining Corp., formerly
Argentium Resources Inc.
Kurt L. Kalbfleisch, Senior Vice President and Chief
Financial Officer
Mr. Kalbfleisch has served as
Senior Vice President and Chief Financial Officer of the Company since December
1, 2014. Mr. Kalbfleisch had 20 years of service with Overland and served as
Overland's Senior Vice President since June 2012, Chief Financial Officer since
February 2008, and Secretary since October 2009. Prior to that, he served as
Overland's Vice President of Finance from July 2007 to June 2012.
Randall T. Gast, Senior Vice President and Chief
Operating Officer
Mr. Gast has served as Senior
Vice President and Chief Operating Officer of the Company since December 1,
2014. Mr. Gast served as Overlands Chief Operating Officer from January 2014
until December 1, 2014, as its Senior Vice President of Worldwide Operations and
Service from August 2013 through December 1, 2014, and as its Senior Vice
President of Strategic Alliances and Client Services from August 2012 until
December 1, 2014. Prior to joining Overland, Mr. Gast was Vice President,
Corporate Operations, of 3PAR, Inc. from May 2006 until October 2010 when 3PAR,
Inc. was acquired by Hewlett Packard. Mr. Gast served as Vice President of ESSN
Supply Chain & Logistics at Hewlett Packard from October 2010 to June 2012.
-11-
Jenny C. Yeh, Vice President, Legal and General
Counsel
Ms. Yeh has served as Vice
President, Legal and General Counsel of the Company since October 5, 2015. Prior
to joining the Company, Ms. Yeh served as Executive Counsel, Transactions and
Finance, at General Electric Company where she was a senior legal advisor to GE
Corporates business development group, supporting global corporate strategy and
transactions across all GE industrial businesses worldwide. From 2007 to 2011,
Ms. Yeh was a corporate partner at Baker & McKenzie LLP, where she advised
clients in general corporate and securities matters, with a specialization in
complex cross-border transactions. Ms. Yeh holds a Juris Doctorate from
Georgetown University Law Center, and Bachelor of Arts degrees from the
University of California at Berkeley.
The Companys independent auditor
is Moss Adams LLP, located at 4747 Executive Drive, Suite 1300, San Diego, CA
92121.
-12-
RELATED PARTY TRANSACTIONS
Related parties of the Company
include the Companys directors, key management personnel and persons that
beneficially own, control or direct, directly or indirectly, more than 10% of
the voting securities of the Company. Key management personnel are those persons
having authority and responsibility for planning, directing, and controlling the
activities of the Company, directly or indirectly. There were no transactions
between the Company and such related parties for the preceding three financial
years up to April 24, 2017 that were material to the Company or such related
party, except for the following:
Registered Direct Offering
and Concurrent Private Placement.
On March 24, 2017, the Company entered
into a Securities Purchase Agreement with certain investors, pursuant to which
the Company issued to the investors, in the aggregate, 20,454,546 of the
Companys common shares for gross proceeds of $4.5 million. The purchase price
for one common share was $0.22. The Securities Purchase Agreement also provided
for the concurrent private placement of warrants exercisable to purchase up to
20,454,546 common shares.
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), participated in the private
placements by acquiring 4,545,454 common shares and warrants to purchase
4,545,454 common shares, for an aggregate purchase price of $1.0 million.
Private Placement.
Between December 30, 2016 and March 16, 2017, the Company completed a
private placement and issued a total of 18,139,998 Units at a purchase price
of $0.30 per Unit. Each Unit consisted of one common share and one warrant from
each of two series of warrants. 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 18,139,998 common shares in the aggregate and has an
exercise price of $0.40 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 18,139,998 common shares in the aggregate and has an exercise
price of $0.55 per share, a five-year term, and is exercisable in whole or in
part at any time prior to expiration.
MF Ventures, LLC, participated in
the private placements by acquiring 8,333,333 common shares and warrants to
purchase 16,666,666 shares.
Lynn Factor and Sheldon
Inwentash, a married couple who 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), participated in the private placements by acquiring 5,325,000 common
shares and warrants to purchase 10,650,000 shares. An additional 700,000 common
shares and warrants to purchase 1,400,000 shares were acquired by ThreeD Capital
Inc. Mr. Inwentash is the Chief Executive Officer of ThreeD Capital Inc.
Related Party Term Loan.
In September 2016, the Company entered into a $2.5 million term loan
agreement with FBC Holdings (an affiliate of Cyrus Capital Partners, a related
party). The term loan has a maturity date of January 31, 2018 and bears interest
at a 20.0% simple annual interest rate, payable monthly in arrears. Monthly
payments of principal on the term loan begin on January 31, 2017, in 13 equal
installments. The Company has the option to pre-pay the outstanding balance of
the term loan, plus any accrued interest, at any time.
Related Party Warrant
Exchange Agreement.
The Company entered into a warrant exchange
agreement (the Warrant Exchange Agreement), dated March 25, 2016, with MF
Ventures, LLC (the Holder) pursuant to which the Company agreed to issue a
warrant (the New Warrant) for the purchase of up to 7,199,216 common shares
(the Warrant Shares), no par value, in a privately negotiated exchange under
Section 3(a)(9) of the Securities Act of 1933, as amended, in exchange for the
surrender and cancellation of previously outstanding warrants for the purchase
of up to, in aggregate, 3,031,249 common shares (the Previously Outstanding
Warrants). The Previously Outstanding Warrants were issued pursuant to: (i)
that certain Purchase Agreement, dated as of May 13, 2015, by and between the
Company and the Holder (the May Purchase Agreement); (ii) that certain
Purchase Agreement, dated as of August 10, 2015, by and between the Company and
the Holder (the August Purchase Agreement); and (iii) that certain
Subscription Agreement, dated as of September 22, 2015, by and between the
Company and the Holder (the 2015 Subscription Agreement). The terms of the New
Warrant are substantially similar to the Previously Outstanding Warrants except:
(i) in the case of the Previously Outstanding Warrants issued pursuant to the
May Purchase Agreement, the exercise price changed from $4.00 per common share
to $1.22 per common share; (ii) in the case of the Previously Outstanding
Warrants issued pursuant to the August Purchase Agreement and the 2015
Subscription Agreement, the exercise price changed from $2.33 per common share
to $1.22 per common share; and (iii) the expiry date changed from various dates
between May 18, 2020 and September 22, 2020 to April 14, 2016. However, if the
holder exercises the New Warrant for the purchase of at least 3,031,249 common
shares before April 14, 2016, then the expiry date for the balance of any
unexercised portion of the New Warrant shall become March 25, 2021. On March 25,
2016, the Holder exercised 3,031,249 of the Warrant Shares for 3,031,249 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 Company also entered into a
Registration Rights Agreement (the Registration Rights Agreement), dated as of
March 25, 2016, with the Holder. Pursuant to the Registration Rights Agreement,
the Company filed a registration statement with the SEC to register the resale
of the Warrant Shares.
-13-
Related Party Convertible
Notes.
On December 1, 2014, in connection with the acquisition of
Overland, the existing debt of Overland and the remaining debt of the Company
were amended and restated into a $19.5 million convertible note with FBC
Holdings. In April 2016, the Company modified its convertible note with FBC
Holdings, pursuant to which the holder made an additional advance of $5.0
million to the Company. The convertible note was originally convertible into
common shares at a price equal to $7.50 per share with respect to $10 million of
the convertible note and $8.50 per share with respect to $9.5 million of the
convertible note. In November 2015, the convertible note was modified and the
conversion prices of $7.50 per share and $8.50 per share were adjusted to $3.00
per share. The convertible note is scheduled to mature March 31, 2018 and bears
interest at an 8.0% simple annual interest rate, payable semi-annually. The
obligations under the convertible note are secured by substantially all assets
of the Company. At December 31, 2016, the Company had $24.2 million, net of
unamortized debt costs of $0.3 million, outstanding on the convertible note.
In February 2016, in connection
with the November 2015 modification and certain specified terms, we issued to
the holder of the convertible note a warrant to purchase 500,000 of common
shares of the Company at a price of $1.62.
In June and December 2015, we
issued 157,872 and 510,590 common shares, respectively, for the payment of
interest expense on our convertible note. In 2016, we issued 4,214,849 common
shares for the payment of interest expense on our convertible note.
Terminated Related Party
Credit Facility.
In December 2014, the Company entered into a
revolving credit agreement with FBC Holdings for a revolving credit facility of
$5.0 million. In July 2015, the credit facility was amended to extend the
scheduled maturity date to May 2016 with an automatic extension to November
2016, and the aggregate borrowing amount was increased from $5.0 million to
$10.0 million. In April 2016, the credit facility was terminated upon repayment
of the outstanding balance.
For the year ended December 31,
2016, interest expense for the credit facility was $0.9 million, which included
$0.7 million of amortization of issuance costs. Interest expense for the credit
facility was $1.2 million, which included $0.7 million of amortization of
issuance costs in 2015. At December 31, 2015, there were $0.1 million in accrued
liabilities related to fees.
In February 2015, we issued
warrants to purchase up to 100,000 common shares to FBC Holdings in connection
with draws on our related party credit facility. The warrants expire in February
2018 and have an exercise price of $4.50 per share.
In March 2015, we issued warrants
to purchase up to 200,000 common shares to FBC Holdings in connection with draws
on our related party credit facility. The warrants expire in March 2018 and have
an exercise price of: (i) in the case of 100,000 of the warrants, $7.21 per
share; and (ii) in the case of 100,000 of the warrants, $5.02 per share.
In December 2015, we issued
warrants to purchase 500,000 common shares of the Company to FBC Holdings in
connection with draws on our related party credit facility. The warrants expire
in December 2018 and have an exercise price of $1.54 per share.
Related Commercial
Agreements
. In July 2013, the Company entered into a supply
agreement, and a technology license agreement, with Overland Storage, Inc.. As
payments under the supply agreement, Sphere 3D issued common shares with a value
as of the date of issuance equal to approximately $0.5 million to Overland
during each of the years ended December 31, 2014 and 2013.
In September 2014, the Company
entered into a commercial relationship with a third party customer to sell a
license to its Glassware product. The customer required that the Glassware
product be provided through one of its preapproved distribution partners. The
Company did not have a relationship with such distribution partner and in order
to facilitate such transaction on a timely basis, the Company and Overland
agreed that Overland would purchase the Glassware product from the Company and
resell it to the distribution partner, with whom Overland had a preexisting
relationship.
The Company recognized $0.8
million and zero in revenue related to these agreements during the years ended
December 31, 2014 and 2013, respectively. The Company made purchases of $1.4
million from Overland related to the supply agreement prior to the acquisition
of Overland on December 1, 2014. The Company recognized $0.2 million in interest
income from a note receivable from Overland that existed prior to the
acquisition of Overland. No related party expense, other than debt interest
expense, was recognized during the years ended December 31, 2014 and 2013.
Amounts included in other current assets and accounts payable under these
agreements was $0.4 million and $0.1 million as of December 31, 2013.
Related Party Legal
Services
. Legal services of $0.4 million and $0.1 million were
provided by a legal firm affiliated with a former director of the Company during
the years ended December 31, 2014 and 2013, respectively. Professional services
of $0.4 million and $0.6 million were provided by a company controlled by a
director of the Company during the years ended December 31, 2014 and 2013,
respectively.
-14-
REASONS FOR THE OFFER AND USE OF PROCEEDS
We are required under the terms
of the Registration Rights Agreement entered into with the investors in the
March Private Placement to file a registration statement on Form F-1,of which
this prospectus is a part, to cover the resale of the common shares issuable
upon conversion of the warrants. The common shares being offered by this
prospectus are solely for the account of the selling shareholders. To the extent
that we have received or will receive additional cash upon exercise of the
warrants, we currently expect to use that cash for general corporate purposes.
These purposes may include repayment of debt, working capital needs, capital
expenditures, acquisitions and any other general corporate purpose.
SELLING SHAREHOLDERS
We have prepared this prospectus
to allow the selling shareholders or their donees, pledgees, transferees or
other successors in interest to sell or otherwise dispose of, from time to time,
up to an aggregate of 22,415,550 common shares issued or issuable upon exercise
of the warrants. The table below presents information regarding the selling
shareholders, the common shares beneficially owned and the common shares that
they may sell or otherwise dispose of from time to time under this
prospectus.
We do not know when or in what
amounts the selling shareholder may sell or otherwise dispose of the common
shares covered hereby. The selling shareholder might not sell any or all of the
shares covered by this prospectus or may sell or dispose of some or all of the
shares other than pursuant to this prospectus. Because the selling shareholder
may not sell or otherwise dispose of some or all of the shares covered by this
prospectus and because there are currently no agreements, arrangements or
understandings with respect to the sale or other disposition of any of the
shares, we cannot estimate the number of the shares that will be held by the
selling shareholder after completion of the offering. However, for purposes of
this table, we have assumed that all of the common shares covered by this
prospectus will be sold by the selling shareholder.
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Beneficial Ownership
(1)
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Number of
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Percent
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Number of
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Percent
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Shares
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of
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Shares
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of
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Beneficially
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Class
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Number of
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Beneficially
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Class
|
|
|
|
Owned Prior
|
|
|
Prior
|
|
|
Shares
|
|
|
Owned
|
|
|
After
|
|
Name of Selling
|
|
to the
|
|
|
to the
|
|
|
Offered
|
|
|
After this
|
|
|
this
|
|
Shareholder
(2)
|
|
Offering
|
|
|
Offering
|
|
|
Hereby
(3)
|
|
|
Offering
|
|
|
Offering
|
|
MF Ventures, LLC
(4)
|
|
41,913,869
|
(5)
|
|
33.45%
|
|
|
4,545,454
|
|
|
37,368,415
|
|
|
29.82%
|
|
Anson Investments Master Fund LP
(6)
|
|
4,210,000
|
|
|
3.36%
|
|
|
2,500,000
|
|
|
1,710,000
|
|
|
1.36%
|
|
Alto Opportunity Master Fund,
SPC - Segregated Master
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio B
(7)
|
|
2,500,000
|
|
|
2.00%
|
|
|
2,500,000
|
|
|
0
|
|
|
0%
|
|
CVI Investments, Inc.
(8)
|
|
2,829,484
|
|
|
2.26%
|
|
|
2,272,728
|
|
|
556,756
|
|
|
0.44%
|
|
Hudson Bay Master Fund Ltd.
(9)
|
|
4,545,454
|
|
|
3.63%
|
|
|
4,545,454
|
|
|
0
|
|
|
0%
|
|
Intracoastal Capital,
LLC
(10)
|
|
2,272,728
|
|
|
1.81%
|
|
|
2,272,728
|
|
|
0
|
|
|
0%
|
|
L1 Capital Global Opportunities Master
Fund
(11)
|
|
818,182
|
|
|
0.65%
|
|
|
818,182
|
|
|
0
|
|
|
0%
|
|
Black Mountain Equities,
Inc.
(12)
|
|
500,000
|
|
|
0.40%
|
|
|
500,000
|
|
|
0
|
|
|
0%
|
|
Gemini Master Fund, Ltd.
(13)
|
|
500,000
|
|
|
0.40%
|
|
|
500,000
|
|
|
0
|
|
|
0%
|
|
Opus Bank
(14)
|
|
1,961,004
|
|
|
1.57%
|
|
|
1,961,004
|
|
|
0
|
|
|
0%
|
|
*
|
Less than 1.0%.
|
|
|
(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 April 28, 2017. Percentage ownership is based on an
aggregation of the 102,880,798 common shares issued and outstanding as of
April 24, 2017 and assumes issuance of the remaining common shares
issuable upon exercise of the warrants. This amount totals 125,296,348
common shares.
|
(2)
|
Unless otherwise indicated, this table is based on
information supplied to us by the selling shareholders and our
records.
|
(3)
|
All 22,415,550 common shares offered pursuant to this
prospectus are issuable upon exercise of the warrants.
|
(4)
|
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. The address for this selling shareholder
is: 201 Spear Street 14
th
Floor, San Francisco, California
94105.
|
(5)
|
Consists of warrants currently exercisable for 25,380,087
common shares and 16,533,782 common shares currently issued to and held
directly by MF Ventures, LLC, and, further, assumes MF Ventures, LLC is
not subject to a 4.99% blocker that would prevent the exercise of warrants
for 4,545,454 common shares that are registered hereunder. Please refer to
the SC 13D/A filed by MF Ventures, LLC, among others, on March 31,
2017.
|
-15-
(6)
|
Voting and investment power over the shares held by Anson
Investments Master Fund LP is exercised by the co-investment advisors to
Anson Investments Master Fund LP. The co-investment advisors of Anson
Investments Master Fund LP consist of Anson Advisors Inc. and Anson Funds
Management LP. Bruce Winson is the managing member of Anson Management GP
LLC, which is the general partner of Anson Funds Management LP. Moez
Kassam and Adam Spears are directors of Anson Advisors Inc. Mr. Winson,
Mr. Kassam and Mr. Spears each disclaim beneficial ownership of these
shares. The principal business address for this selling shareholder is:
190 Elgin Ave; George Town, Grand Cayman.
|
(7)
|
Ayrton Capital LLC, the investment manager to Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B, has
discretionary authority to vote and dispose of the shares held by Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B and may be
deemed to be the beneficial owner of these shares. Waqas Khatri, in his
capacity as Managing Member of Ayrton Capital LLC, may also be deemed to
have investment discretion and voting power over the shares held by Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B. Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B and Mr.
Khatri each disclaim any beneficial ownership of these shares. The address
of Ayrton Capital LLC is 1180 Avenue of Americas, Suite 842, New York, NY
10036.
|
(8)
|
Heights Capital Management, Inc., the authorized agent of
CVI Investments, Inc. ("CVI"), has discretionary authority to vote and
dispose of the shares held by CVI and may be deemed to be the beneficial
owner of these shares. Martin Kobinger, in his capacity as Investment
Manager of Heights Capital Management, Inc., may also be deemed to have
investment discretion and voting power over the shares held by CVI. Mr.
Kobinger disclaims any such beneficial ownership of the shares. The address for this
selling shareholder is: 101 California Street, Suite 3250, San Francisco,
CA 94111.
|
(9)
|
Hudson Bay Capital Management LP, the investment manager
of Hudson Bay Master Fund Ltd., has voting and investment power over these
securities. Sander Gerber is the managing member of Hudson Bay Capital GP
LLC, which is the general partner of Hudson Bay Capital Management LP.
Each of Hudson Bay Master Fund Ltd. and Sander Gerber disclaims beneficial
ownership over these securities. The address for this selling shareholder
is: 777 Third Avenue, 30
th
Floor, New York, NY 10017.
|
(10)
|
Mitchell P. Kopin and Daniel B. Asher, are each managers
of Intracoastal Capital LLC ("lntracoastal") and have shared voting
control and investment discretion over the securities reported herein that
are held by Intracoastal. As a result, each of Mr. Kopin and Mr. Asher may
be deemed to have beneficial ownership of the shares held by Intracoastal.
Mr. Asher, who is a manager of Intracoastal, is also a control person of a
broker-dealer. As a result of such common control, Intracoastal may be
deemed to be an affiliate of a broker-dealer. Intracoastal acquired the
ordinary shares being registered hereunder in the ordinary course of
business, and at the time of the acquisition of the ordinary shares and
warrants described herein, Intracoastal did not have any arrangements or
understandings with any person to distribute such securities. The address
for this selling shareholder is: 2211A Lakeside Drive Bannockbum IL
60015.
|
(11)
|
David Feldman holds voting and/or dispositive power over
the shares held by the selling stockholder. The address for this selling
shareholder is: 161A Shedden Road, 1 Artillery Court, PO Box 10085, Grand
Cayman, KY-1, Cayman Islands.
|
(12)
|
Adam Baker, President of Black Mountain Equities, Inc.,
has sole voting and dispositive power over shares held by Black Mountain
Equities, Inc. The address for this selling shareholder is: 13366
Greenstone Court, San Diego, CA 92131.
|
(13)
|
Steven Winters, President of Gemini Strategies Inc.,
investment manager of Gemini Master Fund, Ltd. has sole voting and
dispositive power over shares held by Gemini Master Fund, Ltd. The address
for this selling shareholder is: c/o Gemini Strategies, 6619 South Vulcan
Ave, Suite 203, Encinitas, CA 92024.
|
(14)
|
Opus Bank is a California commercial bank and lender to
the company under its credit agreement. The address for this selling
shareholder is: 19900 MacArthur Boulevard, 12th Floor, Irvine, California
92612.
|
-16-
PLAN OF DISTRIBUTION
We are registering 22,415,550
common shares issuable upon exercise of the warrants issued in connection with
our March 2017 private placement and to Opus Bank, to permit the resale of the
common shares by the selling shareholders. The number of common shares
registered hereunder includes 700,000 common shares, which represents a good
faith estimate by us, accounting for potential market fluctuations, of the
number of common shares issuable upon exercise of a warrant issued to Opus Bank.
We will not receive any of the proceeds from the sale by the selling
shareholders of the common shares. We will bear all fees and expenses incident
to our obligation to register the common shares.
The selling shareholders, which
as used herein includes donees, pledgees, transferees or other
successors-in-interest selling common shares or interests in common shares
received after the date of this prospectus from a selling shareholder as a gift,
pledge, partnership distribution or other transfer, may, from time to time,
sell, transfer or otherwise dispose of any or all of their common shares or
interests in common shares on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices.
The selling shareholders may use
any one or more of the following methods when disposing of shares or interests
therein:
|
|
ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
|
|
|
|
|
|
block trades in which the broker-dealer will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
|
|
|
|
|
|
purchases by a broker-dealer as principal and resale by
the broker-dealer for its account;
|
|
|
|
|
|
an exchange distribution in accordance with the rules of
the applicable exchange;
|
|
|
|
|
|
privately negotiated transactions;
|
|
|
|
|
|
short sales effected after the date the registration
statement of which this prospectus is a part is declared effective by the
SEC;
|
|
|
|
|
|
through the writing or settlement of options or other
hedging transactions, whether through an options exchange or otherwise;
|
|
|
|
|
|
broker-dealers may agree with the selling shareholders to
sell a specified number of such shares at a stipulated price per share;
|
|
|
|
|
|
a combination of any such methods of sale; and
|
|
|
|
|
|
any other method permitted by applicable law.
|
If the selling shareholders
effect such transactions by selling common shares to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling shareholders or commissions from purchasers of the common shares for
whom they may act as agent or to whom they may sell as principal (which
discounts, concessions or commissions as to particular underwriters,
broker-dealers or agents may be in excess of those customary in the types of
transactions involved). The selling shareholders may, from time to time, pledge
or grant a security interest in some or all of the common shares owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the common shares, from time to
time, under this prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling shareholders to include the pledgee, transferee or other successors
in interest as selling shareholders under this prospectus. The selling
shareholders also may transfer the common shares in other circumstances, in
which case the transferees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.
In connection with the sale of
our common shares or interests therein, the selling shareholders may enter into
hedging transactions with broker-dealers or other financial institutions, which
may in turn engage in short sales of the common shares in the course of hedging
the positions they assume. The selling shareholders may also sell shares of our
common shares short and deliver these securities to close out their short
positions, or loan or pledge the common shares to broker-dealers that in turn
may sell these securities. The selling shareholders may also enter into option
or other transactions with broker-dealers or other financial institutions or the
creation of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
-17-
The aggregate proceeds to the
selling shareholders from the sale of the common shares offered by them will be
the aggregate purchase price of the common shares less aggregate discounts or
commissions, if any. Each of the selling shareholders reserves the right to
accept and, together with their agents from time to time, to reject, in whole or
in part, any proposed purchase of common shares to be made directly or through
agents. We will not receive any of the proceeds from this offering. Upon any
exercise of the warrants by payment of cash, however, we will receive the
exercise price of the warrants.
The selling shareholders also
may resell all or a portion of the shares in open market transactions in
reliance upon Rule 144 under the Securities Act, provided that they meet the
criteria and conform to the requirements of that rule.
The selling shareholders and any
underwriters, broker-dealers or agents that participate in the sale of the
common shares or interests therein may be, underwriters within the meaning of
Section 2(a)(11) of the Securities Act. Any discounts, commissions, concessions
or profit they earn on any resale of the shares may be underwriting discounts
and commissions under the Securities Act. Selling shareholders who are
underwriters within the meaning of Section 2(a)(11) of the Securities Act will
be subject to the prospectus delivery requirements of the Securities Act.
To the extent required, the
common shares to be sold, the names of the selling shareholders, the respective
purchase prices and public offering prices, the names of any agents, dealer or
underwriter, any applicable commissions or discounts with respect to a
particular offer will be set forth in an accompanying prospectus supplement or,
if appropriate, a post-effective amendment to the registration statement that
includes this prospectus.
In order to comply with the
securities laws of some states, if applicable, the common shares may be sold in
these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the common shares may not be sold unless it has been
registered or qualified for sale or an exemption from registration or
qualification requirements is available and is complied with.
We have advised the selling
shareholders that the anti-manipulation rules of Regulation M under the Exchange
Act may apply to sales of shares in the market and to the activities of the
selling shareholders and their affiliates. In addition, to the extent applicable
we will make copies of this prospectus (as it may be supplemented or amended
from time to time) available to the selling shareholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act. The
selling shareholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed to indemnify the
selling shareholders against liabilities, including liabilities under the
Securities Act and state securities laws, relating to the registration of the
shares offered by this prospectus.
We have agreed with certain of
the selling shareholder to keep the registration statement of which this
prospectus constitutes a part effective until the earlier of (1) such time as
all of the shares held by such shareholders and covered by this prospectus have
been disposed of pursuant to and in accordance with the registration statement,
(2) such time as all of the shares held by such shareholders and covered by this
prospectus have been disposed of in accordance with Rule 144 of the Securities
Act, or (3) the date on which such shares may be sold without restriction
pursuant to Rule 144 of the Securities Act without volume or manner-of-sale
restrictions and without the Company being in compliance with the reporting
requirements set forth under Rule 144(d)(1)(i).
-18-
CAPITALIZATION
The following table sets forth
our cash and cash-equivalents and our capitalization as of March 31, 2017 on an
actual basis. The table below does not present our capitalization on an
as-adjusted basis to give effect to the issuance and sale of the 20,454,546
common shares issuable upon exercise of the warrants issued on March 29, 2017 or
the 1,961,004 common shares issuable upon exercise of the warrants issued to
Opus Bank. 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
|
|
$
|
6,904
|
|
|
Current portion of long-term debt, net
|
|
$
|
44,049
|
|
|
Warrant liability
|
|
|
2,945
|
|
|
Shareholders equity
|
|
|
|
|
|
Common
stock, no par value per share; unlimited shares authorized, 102,708,418
shares issued and outstanding, actual
|
|
|
163,260
|
|
|
Accumulated deficit
|
|
$
|
(142,207
|
)
|
|
Accumulated other comprehensive loss
|
|
$
|
(1,574
|
)
|
|
Total
shareholders equity
|
|
$
|
19,479
|
|
|
Total liabilities and
shareholders equity
|
|
$
|
96,302
|
|
-19-
PRICE RANGE OF OUR SHARES
On December 28, 2012, our common
shares commenced trading on the TSX Venture Exchange under the symbol ANY. On
July 8, 2014, our common shares commenced trading on the NASDAQ Global Market
under the symbol ANY. On December 10, 2014, we voluntarily delisted our common
shares from the TSXV. On February 1, 2017, our common shares commenced trading
on the NASDAQ Capital Market in connection with our application to transfer our
shares from the NASDAQ Global Market.
The tables below set forth, for
the periods indicated, the per share high and low closing sales prices for our
common shares as reported on the NASDAQ and the TSXV. TSXV closing prices of our
common shares are presented in Canadian dollars, and the NASDAQ closing prices
of our common shares are presented in U.S. dollars.
|
|
|
|
TSXV
(CAD$)
|
|
|
Annual Highs and Lows
|
|
|
High
|
|
|
Low
|
|
|
Fiscal 2012 (from December
28, 2012)
|
|
|
0.95
|
|
|
0.74
|
|
|
Fiscal 2013
|
|
|
6.80
|
|
|
0.41
|
|
|
Fiscal 2014 (through December
10, 2014)
|
|
|
11.20
|
|
|
5.35
|
|
|
|
|
|
NASDAQ
(USD$)
|
|
|
Annual Highs and Lows
|
|
|
High
|
|
|
Low
|
|
|
Fiscal 2014 (from July 8,
2014)
|
|
|
11.00
|
|
|
4.87
|
|
|
Fiscal 2015
|
|
|
7.49
|
|
|
1.30
|
|
|
Fiscal 2016
|
|
|
2.00
|
|
|
0.18
|
|
|
Fiscal 2017 (through April 19, 2017)
|
|
|
0.37
|
|
|
0.19
|
|
|
|
|
|
NASDAQ
(USD$)
|
|
|
Quarterly Highs and Lows for Fiscal 2015 and 2016
|
|
|
High
|
|
|
Low
|
|
|
First Quarter Fiscal 2015
|
|
|
7.49
|
|
|
3.35
|
|
|
Second Quarter Fiscal 2015
|
|
|
5.46
|
|
|
2.98
|
|
|
Third Quarter Fiscal 2015
|
|
|
5.73
|
|
|
1.66
|
|
|
Fourth Quarter Fiscal 2015
|
|
|
3.80
|
|
|
1.30
|
|
|
First Quarter Fiscal 2016
|
|
|
2.00
|
|
|
1.02
|
|
|
Second Quarter Fiscal 2016
|
|
|
1.38
|
|
|
0.66
|
|
|
Third Quarter Fiscal 2016
|
|
|
0.95
|
|
|
0.40
|
|
|
Fourth Quarter Fiscal 2016
|
|
|
0.92
|
|
|
0.18
|
|
|
First Quarter Fiscal 2017
|
|
|
0.37
|
|
|
0.21
|
|
|
|
|
|
NASDAQ
(USD$)
|
|
|
Monthly Highs and Lows
|
|
|
High
|
|
|
Low
|
|
|
September 2016
|
|
|
0.84
|
|
|
0.40
|
|
|
October 2016
|
|
|
0.68
|
|
|
0.45
|
|
|
November 2016
|
|
|
0.92
|
|
|
0.42
|
|
|
December 2016
|
|
|
0.85
|
|
|
0.18
|
|
|
January 2017
|
|
|
0.56
|
|
|
0.26
|
|
|
February 2017
|
|
|
0.36
|
|
|
0.26
|
|
|
March 2017
|
|
|
0.34
|
|
|
0.20
|
|
|
April 2017 (through April 19, 2017)
|
|
|
0.22
|
|
|
0.19
|
|
Fluctuations in the exchange rate
between the Canadian dollar and the U.S. dollar will affect any comparisons of
our common shares traded on the TSXV and our common shares traded on the NASDAQ.
-20-
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN
PERSONS
We are a corporation governed by
the Business Corporations Act (Ontario) and by the applicable federal laws of
Canada. Certain of our directors and officers and some of the experts named in
this prospectus reside outside the United States and a majority of their assets
are located outside the United States. It may not be possible for you to effect
service of process within the United States on these persons. Furthermore, it
may not be possible for you to enforce against us or them, in the United States,
judgments obtained in United States courts, because a significant portion of our
assets and the assets of these persons are located outside the United States.
We have been advised that there
are strong defenses that can be raised as to the enforceability, in original
actions in Canadian courts, of liabilities based on the United States federal
securities laws or blue sky laws of any state within the United States and to
the enforceability in Canadian courts of judgments of United States courts
obtained in actions based on the civil liability provisions of the United States
federal securities laws or any such state securities or blue sky laws such that
the enforcement in Canada of such liabilities and judgments is not certain.
Therefore, it may not be possible to enforce those judgments against us, our
directors and officers and some of the experts named in this prospectus.
OFFERING EXPENSES
The following table lists the
costs and expenses payable by us in connection with the sale of the common
shares covered by this prospectus other than any sales commissions or discounts,
which expenses will be paid by the selling shareholders. The estimates do not
include expenses related to offerings of particular securities. Each prospectus
supplement describing an offering of securities will reflect the estimated
expenses related to the offering of securities under that prospectus supplement.
All amounts shown are estimates except for the SEC registration fee.
|
SEC registration fee
|
$
|
520
|
|
|
Legal fees and expenses
|
|
40,000
|
|
|
Accounting fees and expenses
|
|
5,000
|
|
|
Miscellaneous expenses
|
|
3,000
|
|
|
Total
|
$
|
48,520
|
|
-21-
SHARE CAPITAL
As of April 24, 2017, 102,880,798
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
|
|
11,108
|
|
|
Common shares issued for warrants exercised
|
|
2,101
|
|
|
Shares
issued under equity incentive plan
|
|
247
|
|
|
Shares issued during the year
ended December 31, 2015:
(2)
|
|
|
|
|
Common
shares issued
|
|
8,764
|
|
|
Common shares issued for warrants exercised
|
|
349
|
|
|
Shares
issued under equity incentive plan
|
|
1,531
|
|
|
Shares issued during the year
ended December 31, 2016:
(3)
|
|
|
|
|
Common
shares issued
|
|
15,126
|
|
|
Common shares issued for warrants exercised
|
|
3,508
|
|
|
Shares
issued under equity incentive plan
|
|
2,733
|
|
|
Shares issued during the year
ended December 31, 2017:
(4)
|
|
|
|
|
Common
shares issued
|
|
33,867
|
|
|
Shares issued under equity incentive plan
|
|
2,276
|
|
_____________
(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 8,556,865 common shares for
all of the outstanding Overland shares on the basis of one Overland share
for 0.46385 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 1,089,867 of our common shares at $5.92.
|
|
|
|
The company issued 87,103 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 1,804,000 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 $1.00. Additionally, the company issued 297,000 common
shares in connection with the exercise of warrants issued in connection
with a November 2013 underwritten financing for the sale of 1,250,000
units that included one common share and one-half of one common share
purchase warrant, at a price of $3.35 per unit of gross proceeds of
$4,187,500. Each such warrant was exercisable to acquire one common share
at a purchase price of $4.50.
|
|
|
(2)
|
In May and June 2015, we completed private placements for
a total of 1,621,250 common shares of the Company and warrants to purchase
up to 1,621,250 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 $3.20. The
warrants have an exercise price of $4.00 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).
|
-22-
|
In August 2015, we completed a private placement of
606,060 common shares of the Company and warrants to purchase up to
606,060 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 $3.30. The
warrants had an exercise price of $3.30 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 $2.33. In September 2015, we issued an additional 252,308 common
shares and 252,308 warrants to purchase 252,308 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 141,631 common shares and 141,631 warrants
to purchase 141,631 common 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 $2.33. 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 1,529,126 common shares with an approximate value
of $6.1 million, and a warrant exercisable for 250,000 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 250,000 common shares at $0.01.
|
|
|
|
In September and October 2015, we entered into
subscription agreements with certain investors pursuant to which we
issued, in the aggregate, 1,417,961 common shares, warrants exercisable to
purchase up to 354,490 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 $2.33.
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 $2.33 per Warrant Share. The warrants are immediately
exercisable and have a five-year term. Each Adjustment Warrant has an
initial exercise price of $0.01 per common share. In December 2015, we
issued an additional 1,297,435 warrants to purchase 1,297,435 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 $2.33. In December 2015, we issued
233,964 Adjustment Warrants to purchase 233,964 common shares in
conjunction with the equity financing completed in December 2015. In
January 2016, 226,539 Adjustment Warrants were exercised at $0.01 per
common share. The remaining Adjustment Warrants will expire on March 31,
2016.
|
|
|
|
In December 2015, we completed an equity financing of
2,527,500 common shares and warrants to purchase up to 2,527,500 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 $2.00. The
warrants have an exercise price of $2.50 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 $1.79. Warrants to purchase up to 1,500,000 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
$2.50.
|
|
|
|
The company issued 668,462 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 349,076 common shares in connection
with the exercise of warrants issued in connection with a November 2013
underwritten financing for the sale of 1,250,000 units that included one
common share and one-half of one common share purchase warrant, at a price
of $3.35 per unit of gross proceeds of $4,187,500. Each such warrant was
exercisable to acquire one common share at a purchase price of
$4.50.
|
|
|
(3)
|
In March 2016, the company issued 30,000 shares in
connection with subscription agreements dated December 2015 and entered
into in connection with the December 2015 Registered Direct
Offering.
|
|
|
|
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 7,199,216 common shares (the Warrant
Shares) in exchange for the surrender and cancellation of previously
outstanding warrants for the purchase of up to, in aggregate, 3,031,249
common shares (the Previously Outstanding Warrants) (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 $1.22 per common share. On March 25, 2016, MF Ventures
exercised 3,031,249 of the Warrant Shares for 3,031,249 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.
|
-23-
|
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
3,947,368 common shares.
|
|
|
|
Between December 2016 and March 16, 2017, the Company
completed private placements and issued a total of 18,139,998 Units at a
purchase price of $0.30 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 18,139,998 common
shares in the aggregate and has an exercise price of $0.40 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 18,139,998
common shares in the aggregate and has an exercise price of $0.55 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 6,933,333
common shares under the Units described above.
|
|
|
|
The company issued 3,105,137 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 250,000 common
shares upon exercise, at a price of $0.01 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 226,539 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, 1,417,961 of the Companys common shares, warrants
exercisable to purchase up to 354,490 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 $2.33. Each
adjustment warrant had an initial exercise price of $0.01 per common
share.
|
|
|
(4)
|
In connection with the December 2016 to March 2017
Private Placement, from January 2017 to March 2017, the Company issued
11,206,665 common shares and the warrants under the Units described in the
footnote above.
|
|
|
|
In January 2017, the Company completed the Acquisition,
and in connection with such purchase of the remaining outstanding equity
interests of the Sellers, issued 2,205,883 common shares.
|
|
|
|
In March 2017, the Company completed a registered direct
offering of 20,454,546 of the Companys common shares, and warrants
exercisable to purchase up to 20,454,546 of the Companys common shares,
at an exercise price of $0.30 per share (the March 2017 Offering). The
Company sold the common shares at a price of $0.22 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.
|
-24-
At April 24, 2017, the Company had the following outstanding
warrants to purchase common shares:
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
Contractual
|
|
|
Exercise
|
|
|
outstanding
|
|
|
|
|
Date issued
|
|
life (years)
|
|
|
price
|
|
|
(in thousands)
|
|
|
Expiration
|
|
February 2015
(1)
|
|
3
|
|
|
$4.50
|
|
|
100
|
|
|
February 20,
2018
|
|
March 2015
(2)
|
|
3
|
|
$
|
$7.21
|
|
|
100
|
|
|
March 6, 2018
|
|
March 2015
(3)
|
|
3
|
|
$
|
$5.02
|
|
|
100
|
|
|
March 20, 2018
|
|
May 2015
(4)
|
|
5
|
|
$
|
$4.00
|
|
|
840
|
|
|
May 31, 2020
|
|
October 2015
(5)
|
|
5
|
|
$
|
$2.33
|
|
|
402
|
|
|
October 14,
2020
|
|
December 2015
(6)
|
|
3
|
|
$
|
$1.54
|
|
|
500
|
|
|
December 21, 2018
|
|
December 2015
(7)
|
|
5
|
|
$
|
$2.50
|
|
|
1,028
|
|
|
December 15,
2020
|
|
December 2015
(8)
|
|
5
|
|
$
|
$1.08
|
(9)
|
|
1,500
|
(10)
|
|
December 4, 2020
|
|
January 2016
(11)
|
|
3
|
|
$
|
$2.06
|
|
|
88
|
|
|
November 30,
2018
|
|
February 2016
(12)
|
|
3
|
|
$
|
$1.62
|
|
|
500
|
|
|
February 26, 2019
|
|
March 2016
(13)
|
|
5
|
|
$
|
$2.50
|
|
|
30
|
|
|
March 4, 2021
|
|
March 2016
(14)
|
|
5
|
|
$
|
$1.22
|
|
|
4,168
|
|
|
March 25, 2021
|
|
November
2016
(15)
|
|
3
|
|
$
|
$2.00
|
|
|
25
|
|
|
November 8,
2019
|
|
December 2016
(16)
|
|
6
|
|
$
|
$0.01
|
|
|
862
|
|
|
December 30, 2022
|
|
January 2017
(17)
|
|
1
|
|
$
|
$0.40
|
|
|
16,907
|
|
|
January 24,
2018
|
|
January 2017
(18)
|
|
5
|
|
$
|
$0.55
|
|
|
16,907
|
|
|
January 24, 2022
|
|
March 2017
(19)
|
|
6
|
|
$
|
$0.01
|
|
|
399
|
|
|
April 18, 2023
|
|
March 2017
(20)
|
|
6
|
|
$
|
$0.01
|
|
|
*
(21
|
)
|
|
June 1, 2023
|
|
March 2017
(22)
|
|
1
|
|
$
|
$0.40
|
|
|
1,233
|
|
|
March 16, 2018
|
|
March 2017
(23)
|
|
5
|
|
$
|
$0.55
|
|
|
1,233
|
|
|
March 16, 2022
|
|
March 2017
(24)
|
|
5
|
|
$
|
$0.30
|
|
|
21,682
|
(25)
|
|
March 24, 2022
|
|
|
|
|
|
|
|
|
|
68,604
|
|
|
|
|
(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 $2.50. On May 28, 2016, the exercise price was
adjusted to $1.08 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.
|
|
|
(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 in connection with the March 2016 Warrant
Exchange.
|
-25-
(15)
|
Issued to Peter Smiechowski in connection with
compensation for consulting services.
|
|
|
(16)
|
Issued in connection with the First Amendment entered
into with Opus Bank.
|
|
|
(17)
|
Issued in connection with the December 2016 to March 2017
Private Placement.
|
|
|
(18)
|
Issued in connection with the December 2016 to March 2017
Private Placement.
|
|
|
(19)
|
Issued in connection with the Second Amendment entered
into with Opus Bank.
|
|
|
(20)
|
Issued in connection with the Second Amendment entered
into with Opus Bank.
|
|
|
(21)
|
In the event that the Company has not repaid all
outstanding amounts due under the Opus Bank Credit Agreement on or prior
to May 31, 2017, this warrant will become exercisable for the purchase of
the number of common shares determined by dividing (i) 100,000 by (ii) the
difference between the market price of our common shares on May 31, 2017
and $0.01.
|
|
|
(22)
|
Issued in connection with the December 2016 to March 2017
Private Placement.
|
|
|
(23)
|
Issued in connection with the December 2016 to March 2017
Private Placement.
|
|
|
(24)
|
Issued in connection with the March 2017
Offering.
|
|
|
(25)
|
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 $0.30, 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 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.
|
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.
-26-
LEGAL MATTERS
The validity of the common shares
offered hereby will be passed upon for us by Stikeman Elliot LLP, 1155
René-Lévesque Blvd. West, 40th Floor, Montréal, QC H3B 3V2.
EXPERTS
Moss Adams LLP, 4747 Executive
Drive, Suite 1300, San Diego, CA 92121, an independent registered public
accounting firm, has audited our consolidated financial statements as of
December 31, 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.
-27-
PART II
INFORMATION NOT REQUIRED IN
PROSPECTUS
Item 6.
|
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 7.
|
Recent Sales of Unregistered Securities
|
In the three years preceding the
filing of this registration statement, we have issued the following securities
that were not registered under the Securities Act:
|
|
warrants exercisable to purchase up to 20,454,546 of the
Companys common shares, no par value per share, at an exercise price of
$0.30 per share in connection with the March 2017 Offering. Roth Capital
Partners, LLC acted as the placement agent for the offering.
|
|
|
18,139,998 Units, at a purchase price of U.S. $0.30 per
Unit, consisting of one common share and one warrant from each of two
series of warrants, as described below, in connection with the December
2016 to March 2017 Private Placement. The first series of warrants is
exercisable to purchase 18,139,998 common shares in the aggregate and has
an exercise price of U.S. $0.40 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 18,139,998 common shares in
the aggregate and has an exercise price of U.S. $0.55 per share, a
five-year term, and is exercisable in whole or in part at any time prior
to expiration.
|
|
|
3,947,368 common shares issued in December 2017 in
connection with the Companys acquisition of 19.9% of the outstanding
equity interests of HVE ConneXions, LLC and Unified ConneXions, Inc.
|
|
|
2,205,883 common shares issued in January 2017 in
connection with the completion of the Companys acquisition of all of the
outstanding equity interests of HVE ConneXions, LLC and Unified
ConneXions, Inc.
|
|
|
a warrant for the purchase of up to 25,000 common shares,
no par value, issued to Peter Smiechowski in connection with compensation
for consulting services.
|
|
|
a warrant for the purchase of up to 7,199,216 common
shares, no par value, issued to MacFarlane Family Ventures, LLC in a
privately negotiated exchange under Section 3(a)(9) of the Securities Act
of 1933, as amended, in exchange for the surrender and cancellation of
previously outstanding warrants for the purchase of up to, in aggregate,
3,031,249 common shares.
|
|
|
1,529,126 common shares and a warrant exercisable for
250,000 common shares issued in connection with the acquisition of RDX®
removable disk product lines from Imation.
|
|
|
999,999 common shares of the Company and warrants to
purchase up to 999,999 common shares in connection with the August 2015
Private Placement, after giving effect to triggered price protection
provisions.
|
|
|
1,621,250 common shares and warrants to purchase up to
1,621,250 common shares in connection with the May 2015 Private Placement.
|
-28-
Unless otherwise noted, all sales of securities described above
were exempt from the registration requirements of the Securities Act in reliance
on Section 4(a)(2) of the Securities Act or Regulation D promulgated under the
Securities Act, relating to transactions by an issuer not involving a public
offering.
Item 8.
|
Exhibits and Financial Statement
Schedules
|
The exhibits to this registration
statement are listed in the Exhibit Index that appears immediately following the
signature pages of this registration statement. Such Exhibit Index is hereby
incorporated in this Item 8 by reference.
(a) The
undersigned registrant hereby undertakes:
1. To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i) To include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or percent change in the maximum aggregate offering price set forth
in the Calculation of Registration Fee table in the effective registration
statement.
(iii) To include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
provided, however
, that
paragraphs (i), (ii), and (iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of the
registration statement.
2.
That, for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
3. To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
4.
To file a post-effective amendment to the registration statement to include any
financial statements required by Item 8.A. of Form 20-F at the start of any
delayed offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Securities Act need
not be furnished, provided, that we include in the prospectus, by means of a
post-effective amendment, financial statements required pursuant to this
paragraph (4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, a post-effective amendment
need not be filed to include financial statements and information required by
Section 10(a)(3) of the Securities Act or Rule 3-19 of Regulation S-X if such
financial statements and information are contained in periodic reports filed
with or furnished to the SEC by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
5. That, for purposes of
determining liability under the Securities Act of 1933 to any purchaser, if
relying on Rule 430B:
(i) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act of
1933 shall be deemed to be part of and included in the registration statement as
of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
Provided, however
, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date.
-29-
(b) The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrants
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plans annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
(c) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
-30-
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-1
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 28
day of April, 2017.
SPHERE 3D CORP.
|
|
|
By:
|
/s/
ERIC L. KELLY
|
|
Eric L. Kelly
|
|
Chief Executive Officer
|
POWER OF ATTORNEY
Each person whose signature
appears below hereby constitutes and appoints Eric L. Kelly and Kurt L.
Kalbfleisch, jointly and severally, as his attorney-in-fact, each with the power
of substitution, for him in any and all capacities, to sign any and all
amendments to this registration statement, including post-effective amendments
or any abbreviated registration statement and any amendments thereto filed
pursuant to Rule 462(b) increasing the number of securities for which
registration is sought, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, with full power of
each to act alone, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
for all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his or
her or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of
the Securities Act of 1933, as amended, this registration statement has been
signed by the following persons in their capacities and on the date indicated.
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ ERIC L. KELLY
|
|
Chairman of the Board and Chief Executive
Officer
|
April 28, 2017
|
Eric L. Kelly
|
|
(
Principal
Executive Officer
)
|
|
|
|
|
|
/s/ KURT L.
KALBFLEISCH
|
|
Chief Financial Officer
|
April 28, 2017
|
Kurt L. Kalbfleisch
|
|
(
Principal
Financial and
Accounting Officer
)
|
|
|
|
|
|
/s/ PETER ASHKIN
|
|
Director
|
April 28, 2017
|
Peter Ashkin
|
|
|
|
|
|
Director
|
April 28, 2017
|
Dr. Cheemin Bo-Linn
|
|
|
|
|
|
|
|
/s/ VIVEKANAND
MAHADEVAN
|
|
Director
|
April 28, 2017
|
Vivekanand Mahadevan
|
|
|
|
|
|
|
|
/s/ PETER
TASSIOPOULOS
|
|
Director
|
April 28, 2017
|
Peter Tassiopoulos
|
|
|
|
-31-
EXHIBIT INDEX
Exhibit
|
|
Filed
|
Incorporated by
Reference
|
Number
|
Description
|
Herewith
|
Form
|
File No.
|
Date Filed
|
|
|
|
|
|
|
1.1
|
Placement Agency Agreement dated March 24, 2017 between
the Company and Roth Capital Partners, LLC
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
3.1
|
Certificate and Articles of Amalgamation
|
|
6-K
|
001-36532
|
3/25/2015
|
|
|
|
|
|
|
3.2
|
By-Law Certificate
|
|
6-K
|
001-36532
|
3/25/2015
|
|
|
|
|
|
|
4.1
|
Specimen certificate evidencing Common Shares
|
|
F-3
|
333-210735
|
4/13/2016
|
|
|
|
|
|
|
4.2
|
Warrant to Purchase up to 862,068 common shares dated
December 30, 2016 issued by the Company to Opus Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
4.3
|
First Additional Warrant to Purchase common shares dated
March 12, 2017 issued by the Company to Opus Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
4.4
|
Second Additional Warrant to Purchase common shares dated
March 12, 2017 issued by the Company to Opus Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
4.5
|
Form of Registration Rights Agreement
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
4.6
|
Form of Warrant
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
5.1
|
Opinion of Stikeman Elliot LLP
|
X
|
|
|
|
|
|
|
|
|
|
10.1
|
Voting Agreements each dated July 15, 2013 between Eric
L. Kelly and various shareholders of the Company
|
|
40-F
|
000-55232
|
6/27/2014
|
|
|
|
|
|
|
10.2
|
Board Nomination Rights Agreement dated July 15, 2013
between Eric L. Kelly and the Company
|
|
40-F
|
000-55232
|
6/27/2014
|
|
|
|
|
|
|
10.3
|
8% Senior Secured Convertible Debenture dated December 1,
2014 between the Company and FBC Holdings S.A.R.L. for $19.5 million
|
|
6-K
|
001-36532
|
12/16/2014
|
|
|
|
|
|
|
10.4
|
First Amendment to 8% Senior Secured Convertible
Debenture dated November 30, 2015 between the Company and FBC Holdings
S.A.R.L.
|
|
6-K
|
001-36532
|
12/2/2015
|
|
|
|
|
|
|
10.5
|
Second Amendment to 8% Senior Secured Convertible
Debenture dated April 6, 2016 between the Company and FBC Holdings
S.A.R.L.
|
|
6-K
|
001-36532
|
4/7/2016
|
|
|
|
|
|
|
10.6
|
Escrow Agreement dated December 1, 2014 between the
Company and Continental Stock Transfer and Trust Company
|
|
6-K
|
001-36532
|
4/1/2015
|
|
|
|
|
|
|
10.7
|
Revolving Credit Agreement dated December 30, 2014
between the Company, Overland Storage, Inc. and FBC Holdings S.A.R.L. for
$5.0 million
|
|
6-K
|
001-36532
|
1/22/2015
|
|
|
|
|
|
|
10.8
|
First Amendment to Revolving Credit Agreement dated July
10, 2015 between the Company, Overland Storage, Inc. and FBC Holdings
S.A.R.L.
|
|
6-K
|
001-36532
|
7/31/2015
|
|
|
|
|
|
|
10.9
|
Form of Purchase Agreement
|
|
6-K
|
001-36532
|
6/2/2015
|
|
|
|
|
|
|
10.10
|
Form of Warrant
|
|
6-K
|
001-36532
|
6/2/2016
|
|
|
|
|
|
|
10.11
|
Asset Purchase Agreement dated August 10, 2015 between
Imation Corp., Overland Storage, Inc. and Sphere 3D Corp.
|
|
6-K
|
001-36532
|
8/14/2015
|
-32-
10.12
|
Form of Subscription Agreement
|
|
6-K
|
001-36532
|
10/7/2015
|
|
|
|
|
|
|
10.13
|
Form of Warrant
|
|
6-K
|
001-36532
|
10/7/2015
|
|
|
|
|
|
|
10.14
|
Form of Subscription Agreement
|
|
6-K
|
001-36532
|
12/2/2015
|
|
|
|
|
|
|
10.15
|
Form of Canadian Warrant
|
|
6-K
|
001-36532
|
12/2/2015
|
|
|
|
|
|
|
10.16
|
Form of Securities Purchase
Agreement
|
|
6-K
|
001-36532
|
12/2/2015
|
|
|
|
|
|
|
10.17
|
Form of Fund Warrant
|
|
6-K
|
001-36532
|
12/2/2015
|
|
|
|
|
|
|
10.18
|
Warrant Exchange Agreement,
dated March 25, 2016, by and between the Company and MF Ventures, LLC
|
|
40-F
|
001-36532
|
3/30/2016
|
|
|
|
|
|
|
10.19
|
Warrant for the purchase of up
to 7,199,216 common shares, dated March 25, 2016, issued to MF Ventures,
LLC
|
|
40-F
|
001-36532
|
3/30/2016
|
|
|
|
|
|
|
10.20
|
Credit Agreement dated April 6,
2016 between Overland Storage, Inc., Tandberg Data Gmbh and Opus Bank
|
|
6-K
|
001-36532
|
4/21/2016
|
|
|
|
|
|
|
10.21
|
Consent, Waiver, Reaffirmation
and Amendment Number One to Credit Agreement dated December 30, 2016
between Overland Storage, Inc., Tandberg Data Gmbh and Opus Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.22
|
Amendment Number Two to Credit
Agreement, Amendment Number One to Amendment Number 1, Waiver and
Reaffirmation dated March 12, 2017 between Overland Storage, Inc.,
Tandberg Data Gmbh and Opus Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.23
|
Third Amendment to Credit
Agreement dated March 21, 2017 between Overland Storage, Inc., Tandberg
Data Gmbh and Opus Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
10.24
|
Term Loan Agreement dated
September 16, 2016 between Sphere 3D Corp. and FBC Holdings S.A.R.L.
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.25
|
Warrant to Purchase up to
862,068 common shares dated December 30, 2016 issued by the Company to
Opus Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
10.26
|
First Additional Warrant to
Purchase common shares dated March 12, 2017 issued by the Company to Opus
Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.27
|
Second Additional Warrant to
Purchase common shares dated March 12, 2017 issued by the Company to Opus
Bank
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.28
|
Form of Securities Purchase
Agreement dated March 24, 2017
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.29
|
Form of Warrant
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.30
|
Form of Leak-Out Agreement
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.31
|
Form of Registration Rights
Agreement
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.32
|
Placement Agency Agreement
dated March 24, 2017 between the Company and Roth Capital Partners, LLC
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.33
|
Form of Lock-Up Agreement
|
|
6-K
|
001-36532
|
3/24/2017
|
|
|
|
|
|
|
10.34
|
Sphere 3D Second Amended and
Restated Stock Option Plan
|
|
F-4
|
333-197569
|
7/23/2014
|
|
|
|
|
|
|
10.35
|
Overland Storage, Inc. 2009
Equity Incentive Plan
|
|
S-8
|
333-203149
|
3/31/2015
|
|
|
|
|
|
|
10.36
|
Overland Storage, Inc. Form of
Stock Option Agreement Under 2009 Plan
|
|
S-8
|
333-203149
|
3/31/2015
|
-33-
10.37
|
Overland Storage,
Inc. Form of Inducement Stock Option Agreement
|
|
S-8
|
333-203149
|
3/31/2015
|
|
|
|
|
|
|
10.38
|
Sphere 3D Corp.
2015 Performance Incentive Plan
|
|
S-8
|
333-214605
|
11/15/2016
|
|
|
|
|
|
|
10.39
|
Form of
Inducement Restricted Stock Unit Agreement.
|
|
S-8
|
333-209251
|
2/1/2016
|
|
|
|
|
|
|
10.40
|
Form of Executive
Inducement Restricted Stock Unit Agreement
|
|
S-8
|
333-209251
|
2/1/2016
|
|
|
|
|
|
|
10.41
|
Sphere 3D Corp.
Employee Stock Purchase Plan
|
|
S-8
|
333-205236
|
6/25/2016
|
|
|
|
|
|
|
10.42
|
Retention
Agreement between Overland Storage, Inc. and Eric Kelly dated June 24,
2009
|
|
10-Q
|
000-22071
|
2/10/2010
|
|
|
|
|
|
|
10.43
|
Employment
Agreement between Overland Storage, Inc. and Eric Kelly dated August 3,
2011
|
|
8-K
|
000-22071
|
8/4/2011
|
|
|
|
|
|
|
10.44
|
San Diego,
California Headquarters Facility Lease dated October 12, 2000 between the
Company and LBA-VIF One, LLC
|
|
10-Q
|
000-22071
|
2/14/2001
|
|
|
|
|
|
|
10.45
|
First Amendment
to Lease dated January 18, 2001 between Overland Storage, Inc. and LBA
Overland, LLC, (as successor-in-interest to LBA-VIF One, LLC)
|
|
10-K
|
000-22071
|
9/28/2001
|
|
|
|
|
|
|
10.46
|
Second Amendment
to Lease dated July 1, 2010 between Overland Storage, Inc. between the
Company and LBA Overland, LLC (as successor-in-interest to LBA-VIF One,
LLC)
|
|
10-K
|
000-22071
|
9/28/2001
|
|
|
|
|
|
|
10.47
|
Third Amendment
to Lease dated July 1, 2010 between the Company and Overtape (CA) QRS
15-14, Inc. (successor-in- interest to LBA Overland, LLC, the
successor-in-interest to LBA-VIF One, LLC
|
|
10-K
|
000-22071
|
9/24/2010
|
|
|
|
|
|
|
10.48
|
Fourth Amendment
to Lease dated October 15, 2013 between the Company and Overtape (CA) QRS
15-14, Inc. (successor- in-interest to LBA Overland, LLC, the
successor-in-interest to LBA-VIF One, LLC
|
|
10-Q
|
000-22071
|
2/13/2014
|
|
|
|
|
|
|
10.49
|
Fifth Amendment
to Lease dated December 8, 2015 between the Company and Overtape (CA) QRS
15-14, Inc. (successor- in-interest to LBA Overland, LLC, the
successor-in-interest to LBA-VIF One, LLC
|
|
20-F
|
001-36532
|
3/31/2017
|
|
|
|
|
|
|
10.50
|
San Jose,
California Headquarters Office Lease dated February 9, 2010 between
Overland Storage, Inc. and Park Center Plaza Investors, L.P.
|
|
20-F
|
001-36532
|
3/31/2017
|
|
|
|
|
|
|
10.51
|
First Amendment
to San Jose, California Headquarters Office Lease dated March 22, 2017
between Sphere 3D Corp. and Park Center Plaza Investors, L.P.
|
|
20-F
|
001-36532
|
3/31/2017
|
|
|
|
|
|
|
10.52
|
Lease Contract
dated May 19, 2016 between Guangzhou Tandberg Electronic Components Co.,
Ltd. And Guangzhu Shi Panyu Tongxing Paper Products Co., Ltd.
|
|
20-F
|
001-36532
|
3/31/2017
|
|
|
|
|
|
|
10.53
|
Form of Stock
Purchase Agreement
|
|
20-F
|
001-36532
|
3/31/2017
|
|
|
|
|
|
|
10.54
|
Form of One-Year
Warrant Agreement
|
|
20-F
|
001-36532
|
3/31/2017
|
|
|
|
|
|
|
10.55
|
Form of Five-Year
Warrant Agreement
|
|
20-F
|
001-36532
|
3/31/2017
|
-34-
-35-
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