SEC Form 4 · accession 0000899243-18-029011
DarkHorse Technologies Inc. · DRK
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owners
CYRUS CAPITAL PARTNERS, L.P.
10% Owner
CYRUS CAPITAL PARTNERS GP, LLC
10% Owner
Stephen C Freidheim
10% Owner
FBC HOLDINGS S.A.R.L.
10% Owner
Period of report
Nov 13, 2018
Accepted (ET)
Nov 15, 2018 · 4:10 pm EST
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001591956
Table I — non-derivative securities
| Security | Date | Code | Shares | Price | A/D | Owned after | D/I | Nature of ownership |
|---|---|---|---|---|---|---|---|---|
| Series A Preferred SharesF1,F2,F3,F4 | Nov 13, 2018 | P$0 | 6,500,000 | — | A | 6,500,000 | I | See Footnotes |
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Put Option (right to sell)F5,F6,F3,F4 | — | Nov 13, 2018 | P | 2,500,000 | A | Nov 13, 2018 | Nov 13, 2020 | Series A Preferred Shares | 2,500,000 | 2,500,000 | I |
| Call Option (obligation to sell)F5,F6,F3,F4 | — | Nov 13, 2018 | S | 2,500,000 | D | Nov 13, 2018 | Nov 13, 2019 | Series A Preferred Shares | 2,500,000 | 2,500,000 | I |
Explanation of responses
- F1On November 13, 2018, Sphere 3D Corp. (the "Issuer") entered into a Conversion Agreement (the "Conversion Agreement") with FBC Holdings S.a r.l. ("FBC") pursuant to which FBC received 6,500,000 Series A Preferred Shares of the Issuer ("Series A Preferred Shares") through the exchange of $6.5 million of a debenture by and between the Issuer and FBC. The Series A Preferred Shares, subject to prior approval by the holders of outstanding common shares of the Issuer (which may only be sought by the Issuer after the six-month anniversary of the initial issue date of the Series A Preferred Shares), are convertible into the Issuer's common shares, at a conversion rate equal to $1.00 per share, plus accrued and unpaid dividends, divided by an amount equal to 0.85 multiplied by a 15 trading day volume weighted average price per common share prior to the date that the conversion notice is provided (the "Conversion Rate"),
- F2(Continued from footnote 1) subject to a conversion price floor of $0.80 as required by NASDAQ rules. The Series A Preferred Shares carry a cumulative preferred dividend at a rate of 8% of the subscription price per Series A Preferred Share, are subject to mandatory redemption for cash after a two-year period, and carry a liquidation preference equal to the subscription price per Series A Preferred Share plus any accrued and unpaid dividends.
- F3This statement is being filed by Cyrus Capital Partners, L.P. ("Cyrus"), FBC, Cyrus Capital Partners GP, L.L.C. ("Cyrus GP"), and Stephen C. Freidheim. FBC is a wholly owned subsidiary of certain funds advised and managed by Cyrus, each of which are private investment funds engaged in the business of acquiring, holding and disposing of investments in various companies. Cyrus is a manager of FBC and the investment manager of each private fund holding an interest in FBC. Cyrus GP is the general partner of Cyrus. Mr. Freidheim is the sole member and manager of Cyrus GP and Chief Investment Officer of Cyrus. Cyrus, Cyrus GP and Mr. Freidheim may be deemed to have a pecuniary interest in a portion of the securities held directly by FBC due to Cyrus' right to receive performance-based allocations.
- F4(Continued from footnote 3) Each of Mr. Freidheim, Cyrus GP and Cyrus disclaims beneficial ownership of the securities of the Issuer reported herein except to the extent of his or its pecuniary interest therein, and this report shall not be deemed an admission that any of Mr. Freidheim, Cyrus GP or Cyrus is the beneficial owner of such securities for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, or for any other purpose.
- F5On November 13, 2018, simultaneously with entering into the Conversion Agreement, the Issuer entered into a Share Exchange and Buy Out Agreement (the "Exchange Agreement") with FBC, Silicon Valley Technology Partners, Inc. ("SVTP") and MF Ventures, LLC ("MFV"). Under the terms of the Exchange Agreement, (i) the Issuer granted FBC the right to exchange up to 2,500,000 Series A Preferred Shares held by FBC for up to 1,879,699 shares of Series A Preferred Stock of SVTP ("SVTP Shares") held by the Issuer (the "Exchange Right"), with such Exchange Right expiring two years after the date of the Exchange Agreement, and (ii) MFV and SVTP have the right to purchase up to 2,120,301 of the SVTP Shares held by FBC plus (b) either (i) 2,500,000 Series A Preferred Shares held by FBC or (ii) if FBC has exercised its Exchange Right prior to the buy-out date,
- F6(Continued from footnote 5) the SVTP Shares that have been exchanged for such Series A Preferred Shares by FBC pursuant to the Exchange Right (the "Buy-out Right"), for the purchase price of an amount equal to 105% of the original issue price for such shares plus all unpaid dividends accrued, with such Buy-out Right expiring within one year after the date of the Exchange Agreement.