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Sphere 3D Completes $20 Million US Debt Financing with Opus Bank

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San Jose, California–(Newsfile Corp. – April 6, 2016) – Sphere 3D Corp. (NASDAQ: ANY), a containerization, virtualization and data management solutions provider and parent company of Overland Storage and Tandberg Data, today announced it has entered into an agreement with Opus Bank (“Opus”) (NASDAQ: OPB), pursuant to which Opus has agreed to provide the company up to US$20 Million in debt financing.

In addition, the company terminated its short term loan facility with FBC Holdings S.a.r.l. (“FBC”), by using US$5 Million in proceeds from the Opus financing and by increasing the existing convertible debenture with FBC by US$5 Million, which currently matures in 2018.

In connection with the Opus financing, the company issued to Opus a warrant for the purchase of up to 1,541,768 common shares of the company, no par value. The warrant will have an exercise price of U.S. $1.30 per share, a six-year term and are exercisable in whole or in part, at any time prior to expiration.

Stephen H. Gordon, Chairman, Chief Executive Officer, and President of Opus Bank, stated, “At Opus Bank, we understand the value of providing capital funding to businesses that cultivate growth and poses an entrepreneurial DNA. Sphere 3D has transformed itself into a provider of end to end IT solutions to thousands of global customer in Healthcare, Educational, Retail, and Governments. We believe that by providing funding to businesses like Sphere 3D, we are fostering innovation, job creation and economic growth.”

Eric Kelly, Chief Executive Officer of Sphere 3D, commented, “Last year we executed a significant transformation and with this elimination of 100% of our short-term debt, we have positioned the company for growth in 2016. In preparing for this growth, we chose to partner with Opus Bank whose strength, leadership and experience in working with leading technology companies provide us with the necessary foundation to capitalize on our opportunities.”

Kevin McBride, Senior Managing Director and Head of the Technology Banking division at Opus Bank, stated, “Sphere 3D has developed differentiated hybrid cloud solutions and partnered with leading global technology companies to help organizations modernize their IT infrastructure in a flexible and affordable way.” McBride added, “The senior debt solution provided by Opus Bank is an example of Opus’ technology experience and capability to deliver needed financing to public middle-market technology companies like Sphere 3D to help them grow their business. Opus is pleased to have the opportunity to become Sphere 3D’s lead commercial bank.”

FBC is an affiliate of Cyrus Capital Partners, L.P., which beneficially owns, directly or indirectly, securities of the company carrying more than 10% of the voting rights attached to the outstanding voting securities of the company. As a result, the additional advance under the existing convertible debenture with FBC constitutes a “related party transaction” within the meaning of Canadian Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). A resolution of the board of directors was passed to approve the transactions described herein. The director nominated by Cyrus did not vote on the resolution in respect of the transactions described herein insofar as they involve FBC and such director did not participate in the discussions relating thereto. The company intends to file a material change report in connection with the transactions described herein. However, such material change report will not be filed at least 21 days before the completion of the transactions described herein in order to allow the company to secure the financing opportunities described herein. The company is relying on the exemptions from the “formal valuation” and “minority approval” requirements under MI 61-101 set forth in sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, based on the fact that the subject matter of, or consideration for, the transactions contemplated herein insofar as they involve interested parties, as determined by the board of directors of the company and in accordance with MI 61-101, does not exceed 25% of the market capitalization of the company, as determined in accordance with MI 61-101.

Technology Banking at Opus Bank

Opus Bank’s Technology Banking division serves West Coast-based venture-backed, private equity, and public middle-market technology companies that focus on Intellectual Property (IP), software, hardware, and IT services. The Technology Banking division is led by Kevin McBride, Senior Managing Director, a seasoned Technology Banking veteran who has acted as the lead agent on transactions for a number of private and public companies, including Adobe Systems, Electronic Arts, Epicor Software, Kratos Defense and Security Systems, and Quantum Corporation.

About Opus Bank

Opus Bank is an FDIC insured California-chartered commercial bank with $6.6 billion of total assets, $5.5 billion of total loans, and $5.3 billion in total deposits as of December 31, 2015. Opus Bank provides high-value, relationship-based banking products, services, and solutions to its clients through its Retail Bank, Commercial Bank, Merchant Bank, and Correspondent Bank. Opus Bank offers a suite of treasury and cash management and depository solutions and a wide range of loan products, including commercial business, healthcare, technology, multifamily residential, commercial real estate, and structured finance, and is an SBA preferred lender. Opus Bank offers commercial escrow services and facilitates 1031 Exchange transactions through its Escrow and Exchange divisions. Opus Bank provides clients with financial and advisory services related to raising equity capital, targeted acquisition and divestiture strategies, general mergers and acquisitions, debt and equity financing, balance sheet restructuring, valuation, strategy, and performance improvement through its Merchant Banking division and its broker-dealer subsidiary, Opus Financial Partners. Opus Bank operates 58 client experience centers, including 33 in California, 22 in the Seattle/Puget Sound region in Washington, two in the Phoenix metropolitan area of Arizona, and one in Portland, Oregon. Opus Bank is an Equal Housing Lender.

About Sphere 3D
Sphere 3D Corp. (NASDAQ: ANY) delivers containerization and virtualization technologies along with data management products that enable workload-optimized solutions. We achieve this through a combination of containerized applications, virtual desktops, virtual storage and physical hyper-converged platforms. Sphere 3D’s value proposition is simple and direct—we allow organizations to deploy a combination of public, private or hybrid Cloud strategies while backing them up with state of the art storage solutions. Sphere 3D, along with its wholly-owned subsidiaries Overland Storage and Tandberg Data, has a strong portfolio of brands including Glassware 2.0™, SnapCLOUD™, SnapScale®, SnapServer®, V3®, RDX®, and NEO®. For more information, visit www.sphere3d.com. Follow us on Twitter @Sphere3D or @overlandstorage.

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Investor Contact:
Blueshirt Group

Michael Bishop
415-217-4968
mike@blueshirtgroup.com

Safe Harbor Statement

This press release may contain forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of risks and uncertainties including, without limitation, unforeseen changes in the course of Sphere 3D’s business or the business of its wholly-owned subsidiaries, including, without limitation, Overland Storage and Tandberg Data; any increase in Sphere 3D’s cash needs or our inability to obtain additional debt or equity financing; performance and functionality of our products; the level of success of our collaborations and business partnerships; possible actions by customers, partners, suppliers, competitors or regulatory authorities; and other risks detailed from time to time in Sphere 3D’s periodic reports contained in our Annual Information Form and other filings with Canadian securities regulators (www.sedar.com) and in prior periodic reports filed with the United States Securities and Exchange Commission (www.sec.gov), and risks detailed in the Form F-4/A relating to Sphere 3D’s merger with Overland Storage filed with the SEC. Sphere 3D undertakes no obligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.