TORONTO, July 24, 2017 (GLOBE NEWSWIRE) -- This press release is being disseminated by MF Ventures, LLC (“MF Ventures”), as required by National Instrument 62-103 of the Canadian Securities Administrators in connection with the filing of an early warning report regarding a change in material facts relating to the common shares (“Common Shares”) and warrants to purchase Common Shares (“Warrants”) of Sphere 3D Corp. (“Sphere 3D”). MF Ventures is an independent investment firm.
Pursuant to a purchase agreement between MF Ventures and Sphere 3D dated December 30, 2016, Sphere 3D issued to MF Ventures: (i) one-year Warrants, which are Warrants exercisable for 8,333,333 Common Shares at an exercise price of $0.40 per share (the “One-Year Warrants”), and (ii) five-year Warrants, which are warrants exercisable for 8,333,333 Common Shares at an exercise price of $0.55 per share (the “Five-Year Warrants”).
Pursuant to a warrant exchange agreement between MF Ventures and Sphere 3D dated March 25, 2016, Sphere 3D issued Warrants to purchase up to 7,199,216 Common Shares at an exercise price of $1.22 per share (the “March 2016 Warrants”). On March 25, 2016, MF Ventures exercised its right under the March 2016 Warrants to purchase 3,031,249 Common Shares for an approximate total purchase price of $3.7 million. MF Ventures has a balance of 4,167,967 Common Shares, at an exercise price of $1.22 per share, to purchase under the March 2016 Warrants.
On July 11, 2017, MF Ventures and Sphere 3D amended the One-Year Warrants, the Five-Year Warrants, and the March 2016 Warrants so that Sphere 3D may elect, in its sole discretion, to acquire no fewer than all of the Warrants represented by the One-Year Warrants, the Five-Year Warrants, and the March 2016 Warrants in exchange for the Common Shares represented by such warrants—i.e. Sphere 3D may elect to issue 8,333,333 Common Shares in exchange for the cancellation of the One-Year Warrants; 8,333,333 Common Shares in exchange for the cancellation of the Five-Year Warrants; and 4,167,967 Common Shares in exchange for the cancellation of the March 2016 Warrants.
Concurrently with the amendment to the Warrants described above, and effective as of July 12, 2017, Sphere 3D effected a share consolidation of its Common Shares on a 1-for-25 basis.
On July 20, 2017, Sphere 3D notified MF Ventures that it intends to exchange the One-Year Warrants, Five-Year Warrants and March 2016 Warrants for Common Shares, with such exchange to be automatically effective three business days following the date of such notice. Sphere 3D will issue a total 1,451,198 Common Shares in exchange for such Warrants and Warrants held by other shareholders of Sphere 3D.
After giving effect to the share consolidation, but before the exchange of the Warrants for Common Shares (as described above), MF Ventures held 561,186 Common Shares and 1,015,203 Warrants (for a total of 1,576,389 Common Shares assuming the exercise of the Warrants), representing approximately 30.4% of the outstanding Common Shares (calculated on the basis of 5,181,629 Common Shares outstanding, consisting of 4,166,426 outstanding Common Shares, and the Warrants held by MF Ventures).
Following the exchange of the Warrants for Common Shares (as described above), MF Ventures will hold 1,394,571 Common Shares and 181,818 Warrants (for a total of 1,576,389 Common Shares assuming the exercise of the Warrants), representing approximately 26.2% of the outstanding Common Shares (calculated on the basis of 6,005,478 Common Shares outstanding, consisting of 5,823,660 outstanding Common Shares following the exchange of the Warrants, and the Warrants held by MF Ventures).
MF Ventures acquired the Common Shares that are the subject of this report for investment purposes.
MF Ventures does not have current plans or future intentions which relate to, or would result in, any of the following:
a) the acquisition of additional securities of Sphere 3D, or the disposition of securities of Sphere 3D;
b) a corporate transaction, such as a merger, reorganization or liquidation, involving Sphere 3D or any of its subsidiaries;
c) a sale or transfer of a material amount of the assets of Sphere 3D or any of its subsidiaries;
d) a change in the board of directors or management of Sphere 3D, including any plans or intentions to change the number or term of directors or to fill any existing vacancy on the board;
e) a material change in the present capitalization or dividend policy of Sphere 3D;
f) a material change in Sphere 3D’s business or corporate structure;
g) a change in Sphere 3D’s charter, bylaws or similar instruments or another action which might impede the acquisition of control of Sphere 3D by any person or company;
h) a class of securities of Sphere 3D being delisted from, or ceasing to be authorized to be quoted on, a marketplace;
i) Sphere 3D ceasing to be a reporting issuer in any jurisdiction of Canada;
j) a solicitation of proxies from securityholders; or
k) an action similar to any of those enumerated above.
Notwithstanding the foregoing, MF Ventures intends to review its investment on a regular basis and, as a result of such review, may determine at any time or from time to time:
- to acquire additional securities of Sphere 3D through open market purchases, privately negotiated transactions, or otherwise;
- to dispose of all or a portion of the securities of Sphere 3D beneficially owned in the open market, privately negotiated transactions, or otherwise; or
- to take any other available course of action which may involve one or more of the transactions described in paragraphs (a) through (k) above or have the results described in those paragraphs.
Notwithstanding anything herein to the contrary, MF Ventures specifically reserves the right to change its intention with respect to any and all matters disclosed or referenced herein. In reaching any decision with respect to any course of action, MF Ventures expects it would take into consideration a variety of factors including, but not limited to, Sphere 3D’s business and prospects, other business opportunities available to MF Ventures, changes in applicable laws and regulations, general economic conditions, worldwide money and equity market conditions (including the market price of the securities of Sphere 3D), tax considerations, and any other factors deemed relevant.
The head office of Sphere 3D is located at:
240 Matheson Blvd. East
Mississauga, Ontario
L4Z 1X1
The address of MF Ventures is:
201 Spear Street, 14th Floor
San Francisco, CA 94105