Following the acquisition of Common Shares, but without giving effect to the issue of the 135,975 Common Shares issuable upon the exercise of the 135,975 Warrants, or the issue of the 2,450,980 Common Shares issuable upon the conversion in full of the New Debentures, CCP now exercises indirect control over an aggregate of 5,915,807 Common Shares, or approximately 16.86% of the issued and outstanding Common Shares. Ownership of the 5,915,807 Common Shares over which CCP exercises indirect control is collectively held by FBC and the Funds.
Following the acquisition of the Common Shares, and assuming the exercise of the 135,975 Warrants for 135,975 Common Shares, and the issue of the 2,450,980 Common Shares issuable upon the conversion in full of the US$19,500,000 aggregate principal amount outstanding under the New Debentures, CCP exercises indirect control over an aggregate of 8,502,762 Common Shares, or approximately 22.58% of the issued and outstanding Common Shares on a partially diluted basis. The following table sets forth the number and percentage amount of outstanding Common Shares owned by FBC and each of the Funds on the date hereof, on a partially diluted basis, after giving effect to the acquisition of the Common Shares, including the exercise of all Warrants and the full conversion of the New Debentures.
Number of Common Shares Held Percentage of Common Shares Held Fund (on a partially diluted basis) (on a partially diluted basis) ---------------------------------------------------------------------------- CMF II 1,105,355 2.94% CRS 339,340 0.90% CRES 383,865 1.02% CSOM 164,368 0.44% FBC 6,509,834 17.29% ------------------------------------------------------------------ Total 8,502,762 22.58%Neither the holder of the New Debentures nor Sphere 3D may convert any portion of the principal amount of such debentures or accrued interest thereon to the extent that the exercise of the conversion right will result in the holder of the New Debentures either (i) becoming a "Control Person" (as that term is defined in Policy 1.1 of the TSX Venture Exchange's Corporate Finance Manual), if applicable, unless the exchange has granted its approval for the creation of a new "Control Person", or (ii) being in violation of any other applicable listing requirement of the exchange on which the Common Shares are then listed or any other regulatory requirement.
For purposes of calculating the percentages of Common Shares owned by FBC and the Funds and indirectly controlled by CCP, CCP has assumed that there were 35,069,410 Common Shares outstanding at December 1, 2014, after giving effect to the Sphere-Overland Merger, as disclosed by Sphere 3D to CCP.
CCP acquired indirect control over, and FBC and the Funds acquired ownership of, the Common Shares that are the subject of this news release for investment purposes.
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 new release.
In connection with the Sphere-Overland Merger, Daniel Bordessa, an employee of CCP, was appointed to the Sphere 3D board of directors on December 1, 2014.
Neither the issuance of this news 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 news release owns or controls any described securities or is a joint actor with another entity named or otherwise referred to in this news 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.
Contacts: Cyrus Capital Partners, L.P. Thomas Stamatelos Chief Financial Officer/Co-Chief Operating Officer (212) 380-5800 Cyrus Capital Partners, L.P. 399 Park Avenue, 39th Floor New York, NY 10022 United States of America