TORONTO, ONTARIO--(Marketwired - Jan. 5, 2017) - Cyrus Capital Partners, L.P. ("CCP") announces that FBC Holdings S.à r.l ("FBC"), an investment fund managed by CCP, received 3,105,137 common shares ("Common Shares") of Sphere 3D Corporation ("Sphere 3D") in lieu of an interest payment due on the the 8% senior secured convertible debenture in the principal amount $24,500,000 issued by Sphere 3D to FBC (the "Debenture"). The 3,105,137 Common Shares issued to FBC, which represent 5.65% of the 54,988,137 issued and outstanding Common Shares of Sphere 3D, were issued to satisfy an interest payment of $1,326,661.45, implying a value of $0.4272 per Common Share.
Before the transaction, CCP, through the Funds and FBC had indirect control over 7,717,389 Common Shares. CCP also had indirect control over 1,300,000 Warrants held by FBC 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 17,184,056 Common Shares, or approximately 28.01% of the issued and outstanding Common Shares. This is calculated on the basis that there would have been 61,349,667 Common Shares of Sphere 3D issued and outstanding (comprised of the then issued 51,883,000 Common Shares, plus the 8,166,667 Common Shares issuable on the conversion of the Debenture and the 1,300,000 Common Shares issuable on the conversion of the Warrants).
After the transaction, CCP, through the Funds and FBC has indirect control over 10,822,526 Common Shares. CCP also has indirect control over 1,300,000 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 20,289,193 Common Shares, or approximately 31.48% of the issued and outstanding Common Shares. This is calculated on the basis that there would be 64,454,804 Common Shares of Sphere 3D issued and outstanding (comprised of the currently issued 51,883,000 Common Shares, plus the 8,166,667 Common Shares issuable on the conversion of the Debenture, the 1,300,000 Common Shares issuable on the conversion of the Warrants and the 3,105,137 Common Shares issued in lieu of an interest payment due on the Debenture).
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 matters enumerated in paragraphs (a) - (k) of Item 5 of the report on Form 62-103F1 being filed connection with the matters disclosed in this release.
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 Item 5 of the report on Form 62-103F1 being filed connection with the matters disclosed in this release.
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