TORONTO, ONTARIO--(Marketwired - July 7, 2016) - Cyrus Capital Partners, L.P. ("CCP") announces that FBC Holdings Sàrl ("FBC"), an investment fund managed by CCP, received 1,109,712 common shares ("Common Shares") of Sphere 3D Corporation ("Sphere 3D") as an interest payment on the 8% senior secured convertible debenture in the principal amount $24,500,000 issued by Sphere 3D to FBC (the "Debenture"). The 1,109,712 Common Shares issued to FBC, which represent 2.21% of the 50,113,712 issued and outstanding Common Shares of Sphere 3D, were issued to satisfy an interest payment of $871,013.00, implying a value of $0.7849 per Common Share.
Before the transaction, CCP, through funds managed by it (the "Funds") and FBC had indirect control over 6,607,677 Common Shares. CPP also had indirect control over 1,435,975 warrants held by FBC (the "Warrants") and the Debenture that is convertible into 8,166,667 Common Shares. If FBC were to have converted the Debenture and the Warrants, FBC and the Funds would have held and CCP would have indirectly controlled, on a partially diluted basis, an aggregate of 16,210,319 Common Shares, or approximately 27.66% of the issued and outstanding Common Shares. This is calculated on the basis that there would have been 58,606,642 Common Shares of Sphere 3D issued and outstanding (comprised of the then issued 49,004,000 Common Shares, plus the 8,166,667 Common Shares issuable on the conversion of the Debenture and the 1,435,975 Common Shares issuable on the conversion of the Warrants).
After the transaction, CCP, through the Funds and FBC has indirect control over 7,717,389 Common Shares. CPP also has indirect control over 1,435,975 Warrants held by FBC and the Debenture that is convertible into 8,166,667 Common Shares. If FBC converts the Debenture and the Warrants, FBC and the Funds would hold and CCP would have indirect control over, on a partially diluted basis, an aggregate of 17,320,031 Common Shares, or approximately 29% of the issued and outstanding Common Shares. This is calculated on the basis that there would be 59,716,354 Common Shares of Sphere 3D issued and outstanding (comprised of the currently issued 50,113,712 Common Shares, plus the 8,166,667 Common Shares issuable on the conversion of the Debenture and the 1,435,975 Common Shares issuable on the conversion of the Warrants).
FBC and each of the Funds are joint actors in connection with the disclosure required by this press release.
Other Information
CCP acquired indirect control over, and FBC and the Funds acquired ownership of, the Common Shares that are the subject of this release for investment purposes.
None of CCP, FBC or the Funds has any current plans or future intentions which relate to or would result in any of the following:
- the acquisition of additional securities of Sphere 3D, or the disposition of securities of Sphere 3D;
- a corporate transaction, such as a merger, reorganization or liquidation, involving Sphere 3D or any of its subsidiaries;
- a sale or transfer of a material amount of the assets of Sphere 3D or any of its subsidiaries;
- 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;
- a material change in the present capitalization or dividend policy of Sphere 3D;
- a material change in Sphere 3D's business or corporate structure;
- 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;
- a class of securities of Sphere 3D being delisted from, or ceasing to be authorized to be quoted on, a marketplace;
- the issuer ceasing to be a reporting issuer in any jurisdiction of Canada;
- a solicitation of proxies from securityholders;
- an action similar to any of those enumerated above.
Notwithstanding the foregoing, in connection with the investment by FBC and the Funds in the Common Shares, CCP may engage in communications with members of management and the board of directors of Sphere 3D, other current or prospective shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other investors with respect to Sphere 3D. CCP intends to review FBC's and the Funds' investment in Sphere 3D on a continuing basis. Depending on various factors including, without limitation, Sphere 3D's financial position, the price levels of the Common Shares, conditions in the securities markets and general economic and industry conditions, CCP's, FBC's or the Funds' business or financial condition and other factors and conditions CCP deems appropriate, FBC and/or the Funds may in the future take such actions with respect to their investment in Sphere 3D as CCP deems appropriate including, without limitation, seeking additional board representation, making proposals to Sphere 3D concerning changes to the capitalization, ownership structure or operations of Sphere 3D, acquiring additional Common Shares, and/or selling or otherwise disposing of some or all of their Common Shares. In addition, CCP may formulate other purposes, plans or proposals regarding Sphere 3D or any of its securities to the extent deemed advisable in light of general investment and trading policies, market conditions or other factors or may change its intention with respect to any and all matters referred to in this Item 5.
Except as specifically indicated in this press release, neither the issuance of this press release in connection with the matters disclosed herein nor the anticipated filing by CCP of the corresponding "early warning" report required to be filed in accordance with applicable Canadian securities laws is an admission that an entity named or otherwise referred to in this press release owns or controls any described securities or is a joint actor with another entity named or otherwise referred to in this press release.
CCP's address and other contact information is set forth below. For further information, including to obtain a copy, once filed, of the "early warning" report required to be filed in accordance with applicable Canadian securities laws, contact CCP at the address specified below. CCP was formed under the laws of Delaware and is an SEC registered investment adviser.
| Cyrus Capital Partners, L.P. |
| 399 Park Avenue, 39th Floor |
| New York, NY 10022 |
| United States of America |
Contact Information:
Chief Operating Officer
(212) 380-5800