Sphere 3D Corp. (ANY) Earnings Call Transcript & Summary

Hi, everybody. My name is Denise Garrett, and I'm the host of today's Zoom meeting. Before we start the annual and special meeting of Sphere 3D Corp., we thought it would be helpful to go over a couple of Zoom functions that will help run the meeting more smoothly. Throughout the meeting, I will be sharing the agenda with everyone, and you should see that now on your screen. In addition to seeing the agenda, you should see a Zoom menu bar at either the top or bottom of your screen. If you don't see the menu bar, try moving your cursor to the top or bottom of your screen which should unhide your menu bar. Far left corner of the menu bar, you will see phone icon. You should be muted now. Your microphone should have a red line going through it. If you are not muted, please tap the microphone with your cursor, and that will mute you. When you are participating in the meeting, simply tap the microphone again and that will unmute you. After you are done participating, please mute yourself again. If you are joining the meeting on your telephone, please also be sure to mute yourself so that we don't hear your background noise. Another function on the menu bar is participants. Please tap the participant icon now. When you do, you will see all of the participants in the meeting. You can use your cursor to move the participant window on your screen so that you can still see the agenda. In the participant window, you can send a private message to any of the attendees. To send a private message, hover your cursor over the participant to which you want to send a message, and you will see a blue more button to the right. When you tap the blue more button, you will see a menu which includes a chat button. Tap the chat button, and you will be presented with the chat function. Please locate Oliver Keung's name in the participant list. If you are a registered shareholder or a proxyholder and you have not submitted your proxy or would like to change your vote, please send a chat message to Oliver and he will send you a ballot. You may also send Oliver an e-mail at oliver.keung, K-E-U-N-G, @t, as in Tom, mx.com. You will also see his e-mail address at the top of the agenda. [Operator Instructions] At this time, I will turn the meeting over to Peter.

Thank you, Denise. Good afternoon, everyone, and welcome to this annual and special meeting of the shareholders of Sphere 3D Corp. My name is Peter Tassiopoulos, and I'm the Chief Executive Officer and a Director of Sphere 3D Corp. Due to the COVID-19 pandemic and to ensure the safety of its shareholders, this annual and special meeting is being held via video conference rather than in person, as disclosed in the Notice of Meeting and management information circular, where shareholders were strongly encouraged to vote in advance of the meeting using one of the methods described in the voting instructions form or the form of proxy. If you are a registered shareholder or a proxyholder having voting authority, and you would like to vote today, please let me know now. If so, we will send an electronic ballot to you, which you will need to sign and return via e-mail to the scrutineer. Please send an e-mail to the scrutineer in order to get a ballot. The e-mail address is on your screen at the top of the agenda. If you have called in, the e-mail address is oliver.keung@tmx.com. Besides any shareholders who may be submitting a ballot to the scrutineer during the meeting, all of the votes for the meeting were submitted through proxies or otherwise in advance of the meeting. In accordance with the bylaws, I will act as Chairman of this meeting, which I now call to order. Jason Meretsky, Corporate Counsel to the company, will act as secretary of the meeting, and Oliver Keung from TSX Trust Company will act as scrutineer. The notice calling this meeting, a proxy statement and management information circular and form of proxy were mailed on January 12, 2021, to the registered shareholders and nonobjecting beneficial owners of record as of December 22, 2020. A declaration attesting to such mailing has been provided by the TSX Trust Company. I hereby direct the secretary to append the declaration of mailing as schedule A to the minutes of meeting. I [ buy ] that the scrutineer has provided a report indicating that a quorum of shareholders is present. The scrutineer's report on quorum is available for inspection by any shareholder following the meeting. Due notice having been given and quorum being present, I declare this annual special meeting of shareholders be regularly called and properly constituted for the transaction of business. The business of this meeting is the presentation of financial statements for the year ended December 31, 2019, the election of directors, the appointment of auditors, approval of say on pay, approval of frequency on pay and approval of issuance of common shares under the company's various series of preferred shares. For the purposes of moving the formal business of the meeting along, shareholders and proxyholders will be asked to move and second the motions to be brought before the meeting. This is not intended to limit the discussion on any matter. Based upon the proxies duly received prior to the meeting, the votes in relation to the resolutions to be considered at the meeting concerning the election of directors, the appointment of auditors, approval of say on pay, approval of frequency on pay and approval of issuance of common shares under the company's various series of preferred shares have been received in favor by the requisite majority of shareholders. The scrutineer will confirm that sufficient votes were received for each item as the respective proposal is introduced during the meeting. In order to conduct the meeting, only shareholders or valid proxyholders have the right to address the meeting and only after they have been recognized by the chair. Discussion will be limited to the matter under consideration at the applicable time, and questions or comments related to business of the meeting, but not related to the matter under the consideration, will be deferred until an appropriate time. And the chair reserves the right to limit a speaker to 5 minutes on any matter. As the first item of business, I place before the meeting financial statements for the year ended December 31, 2019, and the report of the auditors thereon. These documents are available on SEDAR and EDGAR, and you've received them together with the proxy materials. In addition, the financial statements and auditor's report will be attached as a schedule to the minutes of this meeting. The next item of business is the election of directors. I declare the meeting open for nominations for the election of 4 directors to hold office for a term expiring at the close of the next annual meeting of shareholders. May I have the nominations?

Mr. Chairman, I nominate Cheemin Bo-Linn, Vic Mahadevan, Duncan McEwan and Peter Tassiopoulos as directors.

Thank you. Since there were no additional nominations made prior to the meeting, as required by the bylaws of the company I declare the nominations closed. I will now entertain a motion respecting the election of directors.

Mr. Chairman, I move that the persons nominated be elected as directors of Sphere 3D Corp. to hold office until the close of the next annual meeting of shareholders.

Thank you. I second the motion. All those in favor of the election of the nominees, please signify by saying aye. [Voting]

If any against, please identify yourself as a duly registered shareholder or valid proxyholder and signify by saying nay. [Voting]

I declare that the process nominated have been -- the persons nominated have been duly elected as the directors of Sphere 3D Corp., and ask the scrutineer to confirm that each of the nominees received sufficient votes to be elected.

Mr. Chairman, I confirm.

Thank you. The next item of business is the appointment of auditors. Auditors are currently Smythe LLC, chartered accountants, and it is proposed that they be reappointed as the auditors of Sphere 3D Corp. May I have a motion to appoint Smythe LLC, chartered accountants, as the auditors and authorize the directors to fix their remuneration?

Mr. Chairman, I move that Smythe LLC, chartered professional accountants, be appointed as the auditors of Sphere 3D, to hold office until the close of the next annual meeting of shareholders or until their successors are appointed, at such remuneration as may be fixed by the directors, and the directors are hereby authorized to fix such remuneration.

Thank you. I second the motion. All those in favor of the appointment of Smythe LLC, chartered professional accountants, as the auditors of Sphere 3D Corp., please signify by saying aye. [Voting]

If any against, please identify yourself as a duly registered shareholder or valid proxyholder and signify by saying nay. [Voting]

I declare that Smythe LLC have been duly appointed as the auditors of Sphere 3D Corp., and that the directors are authorized to fix their remuneration. Will the scrutineer please confirm that the resolution received sufficient votes to be carried?

Mr. Chairman, I confirm.

Thank you. The next item of business is to consider and, if thought fit, to pass a resolution for the nonbinding approval on an advisory basis of the compensation of the company's executive officers, otherwise known as say on pay compensation, as outlined in the management information circular on Page 21. This resolution must be passed by a majority of the votes, and I will now entertain a motion to pass the resolution as described in the management information circular.

Mr. Chairman, I move that the resolution for the nonbinding approval on an advisory basis of the compensation of the company's executive officers be passed.

I second the motion. All those in favor, please signify by saying aye. [Voting]

If any against, please identify yourself as a duly registered shareholder or a valid proxyholder and signify by saying nay. [Voting]

I declare the motion carried. Will the scrutineer please confirm that the resolution's received sufficient votes to be carried?

Mr. Chairman, I confirm.

The next item of business is to consider and, if thought fit, to pass a resolution recommending on an advisory basis that the company seek the nonbinding advisory vote of the shareholders regarding -- sorry, say on pay compensation every 3 years as outlined in the management information circular on Page 30. This resolution must be passed by a majority of the votes, and I will now entertain a motion to pass the resolution as described in the management information circular.

Mr. Chairman, I move that the resolution recommending on an advisory basis that the company seek the nonbinding advisory vote of the shareholders regarding say on pay compensation every 3 years be passed.

I second the motion. All those in favor, please signify by saying aye. [Voting]

If any against, please identify yourself as a duly registered shareholder or valid proxyholder and signify it by saying nay. [Voting]

I declare the motion carried. Will the scrutineer please confirm that the resolution received sufficient votes to be carried?

Mr. Chairman, I confirm.

Thank you. The next item of business to consider and, if thought fit, to pass a resolution authorizing, for purposes of complying with NASDAQ Listing Rule 5635(d) and the terms of the Series B preferred shares, the issuance of common shares underlying Series B preferred shares issued by us pursuant to the terms of that certain share exchange agreement dated July 12, 2019, by and among the company and FBC Holdings S.A.R.L., as outlined in the management information circular on Page 31. This resolution must be passed by a majority of the votes, excluding any common shares issued upon conversion of the Series B preferred shares, if any, which may not be voted on this matter. And I will now entertain a motion to pass the resolution as described in the management information circular.