UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 23, 2020
SPHERE 3D CORP.
(Exact Name of Registrant as Specified in Charter)
|
Ontario, Canada |
001-36532 |
98-1220792 |
|
(State or Other Jurisdiction |
(Commission |
(IRS Employer |
|
of Incorporation) |
File Number) |
Identification No.) |
|
895 Don Mills Road, Bldg. 2, Suite 900 Toronto, Ontario |
M3C 1W3
|
|
(Address of principle executive offices) |
(Zip Code) |
Registrant's telephone number, including area code: (858) 571-5555
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[x] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
|
Common Shares |
ANY |
NASDAQ Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, 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 13(a) of the Exchange Act. [ ]
Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Share Purchase Agreement
On September 14, 2020, Sphere 3D Corp. (the "Company" or "Sphere") entered into a securities purchase agreement (the "SPA") with an investor relating to the issuance and sale to the investor of 3,000 shares of the Company's to-be-established Series E Convertible Preferred Shares, no par value (the "Series E Preferred Shares") in a private placement transaction, for proceeds of $3 million. The sale of the Series E Preferred Shares to the investor is expected to close on or about September 30, 2020.
On September 23, 2020, the Company entered into an Amendment to the SPA (the "SPA Amendment"). Under the SPA Amendment, the investor and the Company agreed that to the extent the investor converts any Series E Preferred Shares into common shares, such common shares shall be prohibited from being voted with respect to any proposal related to the transactions contemplated by the SPA, including any proposal seeking to obtain shareholder approval of the transactions contemplated by the SPA in accordance with Nasdaq rules.
The foregoing summary of the terms of the SPA Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the SPA Amendment, a copy of which is filed hereto as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Amendment No. 1 to Business Advisory Agreement
On February 13, 2020, the Company entered into a business advisory agreement (the "Advisory Agreement") with Torrington Financial Services Ltd (the "Advisor"). Under the Advisory Agreement, the Advisor is to receive certain consideration in the event the Company enters into a business combination.
On September 25, 2020, the Company and Advisor entered into Amendment No. 1 to the Business Advisory Agreement (the "Amendment"). Under the Amendment, the parties agreed that if the Company closes on its merger with Rainmaker Worldwide Inc. ("Rainmaker") pursuant to the Agreement and Plan of Merger, dated July 14, 2020, as amended, between Sphere, Rainmaker and S3D Nevada Inc. at a ratio of less than 1 share of the Company for every 10 shares of Rainmaker, the Advisor shall receive 1,800,000 common shares of the Company as compensation under the Advisory Agreement, subject to regulatory and NASDAQ approvals.
The foregoing summary of the terms of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed hereto as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
Item 5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Pursuant to the articles of incorporation of Sphere, the Company is authorized to issue an unlimited number of preferred shares, issuable in series and the directors are authorized to fix the number of shares in each series of preferred shares and to determine the designation, rights, privileges, restrictions and conditions attaching to each series of preferred shares.
On September 17, 2020 the directors of the Company passed a resolution authorizing the filing of articles of amendment to create a fifth series of preferred shares, being, an unlimited number of Series E Preferred Shares and to provide for the rights, privileges, restrictions and conditions attaching thereto. On September 29, 2020, the Company filed articles of amendment to create the Series E Preferred Shares (the "Pref E Amendment").
The foregoing description of the Pref E Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Pref E Amendment, a copy of which is filed hereto as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
All references in this 8-K to dollars, unless otherwise specifically indicated, are expressed in United States currency.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Additional Information and Where to Find It
In connection with the proposed transaction, Sphere and Rainmaker intend to file with the SEC a registration statement on Form S-4 or F-4, as applicable, which will contain an information statement of Rainmaker and a proxy statement/prospectus of Sphere (the "Proxy Statement/Prospectus"), and intend to mail the definitive proxy statement/prospectus to the Company's stockholders when available. SECURITY HOLDERS OF SPHERE AND RAINMAKER ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AND ANY RELATED AMENDMENTS, SUPPLEMENTS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SPHERE, RAINMAKER, THE PROPOSED TRANSACTION AND RELATED MATTERS. Security holders may obtain free copies of the Proxy Statement/Prospectus and other documents (when available) that Sphere and Rainmaker file with the SEC through the website maintained by the SEC at www.sec.gov.
Participants in the Solicitation
Sphere, Rainmaker and certain of their respective directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of Rainmaker in connection with the transaction, including a description of their respective direct or indirect interests, by security holdings or otherwise, will be included in the definitive Proxy Statement/Prospectus when it is filed with the SEC. Information regarding Sphere's executive officers and directors is included in Sphere's proxy statement for its 2019 annual meeting of stockholders, which was filed with the SEC on December 6, 2019 and in Sphere's Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on May 14, 2020 and amended on May 15, 2020 ("Annual Report"). Changes in the director or indirect interests of Sphere's directors and executive officers are set forth in Forms 3, 4 and 5 as filed with the SEC. These documents are available free of charge as described above.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events and these include statements using the words such as will and expected, and similar statements. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations of Sphere. Risks and uncertainties include, but are not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect Sphere's business and the price of its common stock, (ii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the Merger Agreement by the stockholders of Rainmaker, and the receipt of certain governmental and regulatory approvals, (iii) the failure of Sphere and Merger Sub to obtain the necessary financing, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (v) the effect of the announcement or pendency of the transaction on Sphere's or Rainmaker's business relationships, operating results, and business generally, (vi) risks that the proposed transaction disrupts Sphere's or Rainmaker's current plans and operations, (vii) risks related to diverting management's attention from Sphere's or Rainmaker's ongoing business operations, and (viii) the outcome of any legal proceedings that may be instituted against Sphere, Rainmaker or Merger Sub related to the Merger Agreement or the transaction contemplated thereby. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of Sphere described in the "Risk Factors" section of Sphere's Annual Report and other reports and documents filed from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Sphere assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Sphere does not give any assurance that it will achieve its expectations.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 29, 2020
SPHERE 3D Corp.
By: /s/ Peter Tassiopoulos
Name: Peter Tassiopoulos
Title: Chief Executive Officer
Exhibit 10.1
AMENDMENT TO PURCHASE AGREEMENT
This Amendment (this "Amendment"), dated as of September 23, 2020, is to that certain Purchase Agreement, dated September 14, 2020 ("Purchase Agreement"), between Sphere 3D Corp. (the "Company") and the investor signatory thereto (the "Investor"). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.
RECITALS:
A. Whereas, the Purchase Agreement contemplated the Company selling the Investor $3,000,000 of Preferred Stock pursuant to the terms set forth therein;
B. Whereas, the Company and Investor now desire to amend the Purchase Agreement as set forth herein; and
C. Whereas, the Purchase Agreement may be amended in a written instrument signed by the Company and the Investor.
AGREEMENTS
NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows:
1. A new Section 7.10 shall be added to the Purchase Agreement, which shall state as follows:
Section 7.10 Voting. The Investor and Company hereby covenant and agree that to the extent Investor converts any Preferred Stock into Common Shares, such Common Shares shall be prohibited from being voted with respect to any proposal related to the transactions contemplated by the Purchase Agreement, including on any proposal seeking to obtain shareholder approval of the transactions contemplated by the Purchase Agreement in accordance with Nasdaq rules.
2. Except as modified herein, the Purchase Agreement shall remain in full force and effect.
3. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and shall be binding upon all parties, their successors and assigns, and all of which taken together shall constitute one and the same Amendment. A signature delivered by facsimile shall constitute an original.
4. This Amendment shall be governed pursuant to Section 9.11 of the Agreement.
[Signature Page Follows]
[SIGNATURE PAGE TO AMENDMENT TO PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth above.
|
COMPANY: |
||
|
Sphere 3D Corp. |
||
|
By: |
/s/ Peter Tassiopoulos |
|
|
Name: Peter Tassiopoulos Title: CEO |
||
|
|
||
|
INVESTOR: ______________________________
|
||
|
By: |
/s/ Investor |
|
|
Name: Title: |
||
Exhibit 10.2
AMENDMENT NO. 1
TO BUSINESS ADVISORY AGREEMENT
This Amendment No. 1 to the Business Advisory Agreement (the "Amendment"), dated September 25, 2020, is by and between Sphere 3D Corp., an Ontario corporation (the "Company") and Torrington Financial Services Limited (the "Advisor") The Company and the Advisor are collectively referred to as the "Parties" and individually, a "Party").
WHEREAS, the Parties entered into a Business Advisory Agreement on February 13, 2020 (the "Agreement"); and
WHEREAS, pursuant to the Agreement, the Advisor is to receive certain consideration in the event that the Company enters into a business combination; and
WHEREAS, the Parties wish to amend the Agreement to clarify the Advisor's compensation in the event that the Company closes on its merger with Rainmaker Worldwide Inc.(the "Rainmaker Merger"); and
WHEREAS, the Parties wish to amend Section 2(b) of the Agreement to provide that upon the closing of the Rainmaker Merger, at a ratio of less than 10 to 1 in favor of Sphere 3D, the Advisor will receive 1,800,000 shares of common stock of the Company and that such shares shall constitute full payment under the Agreement.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, the Parties hereto agree as follows:
1. All capitalized terms not otherwise defined herein shall have the meaning attributed to them in the Merger Agreement.
2. Section 2(b) of the Agreement is amended to state that the in the event that the company successfully renegotiates the Rainmaker Merger to include a ratio of at least 10 to 1 Rainmaker shares for each Sphere 3D share, the Advisor will be entitled to a flat fee of 1,800,000 shares of the Company's Common Stock which shares shall be issued upon the closing of the proposed merger with Rainmaker Worldwide Inc, subject to the Company receiving all necessary approvals and that such shares shall be included in the Company's listing on the Nasdaq Stock Market, and that such shares shall constitute full payment for the Advisor in connection with the Rainmaker Merger.
The remainder of the Agreement shall remain unchanged and continue to be operative.
3. The Parties shall sign such further and other documents, and do and perform and cause to be done and performed all such further and other acts and things, as may be necessary or desirable in order to give full effect to this Amendment and every part hereof.
4. This Amendment shall be governed by, and construed in accordance with, the laws of the State of Nevada, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof.
5. This Amendment may be executed in several counterparts, each of which so executed shall be deemed to be an original and such counterparts together shall be but one and the same instrument. Delivery by facsimile or by electronic transmission in portable document format (PDF) of an executed counterpart of this Amendment is as effective as delivery of an originally executed counterpart of this Amending Agreement.
6. This Amendment Agreement constitutes the entire agreement between the Parties with respect to all of the matters herein and its execution has not been induced by, nor do any of the Parties rely upon or regard as material, any representations or writings whatever not incorporated herein and made a part hereof. This Amendment may not be amended or modified in any respect except by written instrument signed by all of the parties hereto.
7. This Amendment shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns.
[Signature Page Follows]
| SPHERE 3D CORP. | ||
| Per: | /s/ Peter Tassiopoulos | |
| Name: Peter Tassiopoulos | ||
| Title: Chief Executive Officer | ||
| TORRINGTON FINANCIAL SERVICES LIMITED | ||
| Per: |
/s/ Freda McWilliams
|
|
| Name: Freda McWilliams | ||
| Title: Chief Executive Officer | ||
[Signature Page to Amendment No. 1 to Advisory Agreement]