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

Welcome to the 2024 Annual and Special Meeting of Shareholders of Sphere 3D Corp. Please note that the meeting is being recorded. I would like to introduce Patricia Trompeter, Chief Executive Officer and a Director of the company. Ms. Trompeter, the floor is yours.

Thank you, Thomas. Good morning or afternoon, depending on where you're located. Welcome, valued shareholders and guests. We'd like to thank you for your continued support and patience over the last year and in the next few months to come. I also want to take a moment to thank my small but mighty team here at Sphere 3D. They've worked countless hours and put up with my 5 a.m. e-mail garages. We have had many wins in 2023, growing our Exahash, terminating non-beneficial contracts and rightsizing cost platforms with an eye towards profitability. We have also successfully piloted through a few turbulent storms and have come out stronger for it. As previously mentioned, in the coming months, our focus will be on refreshing our fleet with more efficient machines, potentially acquiring next-gen machines and finding a merger partner. We believe Sphere 3D is at a moment of lift. A moment of lift is when you're taxing down the runway and you feel the plane leaving the ground about to take off. I thank all of you for allowing you to pilot this forthcoming journey in 2024. And with that thought, I'll turn it over to our esteemed Chair, Duncan McEwan.

Thank you, Patty, and good morning, everyone, and welcome to this Annual and Special Meeting of the Shareholders of Sphere 3D Corporation. Present today as well as Patty are our nominated Directors, Ms. Harnett; and Mr. Henley. Kurt Kalbfleisch, our Chief Financial Officer, is also with us today. We are pleased to host the meeting through TSX Trust Company's virtual meeting platform, accessible to all our shareholders regardless of physical location to participate, submit questions and vote. I officially call the meeting to order and appoint Jason Meretsky, Canadian Corporate Counsel, to act as Secretary of the meeting; and Amy Kam of TSX Trust Company to act as scrutineer at the meeting. Only registered shareholders who are signed in with their control number may vote and ask questions at the meeting. A notice describing how to access the company's proxy materials over the Internet and how to request a paper copy of the proxy materials was mailed on April 4, 2024 to the registered shareholders of record as of March 26. The declaration of testing 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 this meeting. The company's bylaws provide that a quorum at the meeting shall consist of at least two persons present and holding or represented by proxy, not less than 33 1/3% of the total number of outstanding common shares having voting rights at the meeting. The scrutineer has provided a report indicating that a quorum of shareholders is present. The scrutineers' report on quorum is available for inspection by any shareholder following the meeting. So due notice having been given and a quorum being present, I declare this Annual and Special Meeting of Shareholders to be regularly called and properly constituted for the transaction of business. The business of this meeting is: one, the presentation of financial statements for the year ended December 31, 2023; two, the approval of Board size and the election of directors; three, the ratification of the selection of auditors; four, approval of the second amended and restated 2015 performance incentive plan; and five, approval of by a non-binding advisory vote, the compensation of the executive officers. We will conduct the votes on the matter before us by a poll. In a poll, each registered shareholder or their duly appointed proxy holder is entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder. The poll will be open for all resolutions at the same time. Click the voting button on the left menu on your screen when the poll is announced. This will allow you to choose to vote on each resolution immediately or wait until conclusion of discussion on each resolution prior to casting your vote. There will be an opportunity for shareholders to ask questions on each resolution in turn related to that resolution only. To submit a question, click the Ask a Question button on the left menu of your screen and type your question in the text box. Once discussion of all items of business has concluded, I will give you a minute to enter your votes and then declare voting closed on all resolutions. The results of the meeting will be released on EDGAR and SEDAR. We will run through each of the items on the agenda in turn, responding to questions on that item of business while it is before the meeting. I now declare the polls open on all resolutions. Registered shareholders and duly appointed proxy holders, please click on the voting button in order to cast your votes. If you have already submitted your votes in advance and do not wish to change your vote, you do not need to take any further action. As the first item of business, I place before the meeting financial statements for the year ended December 31, 2023, and the report of our auditors thereon. These documents were mailed to you if requested, but were otherwise available on the Internet with the proxy materials and are also available and have been publicly filed on SEDAR and EDGAR. 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 to set the size of the Board at 4 members within the minimum and maximum number of shares provided for in the company's article. As Chair, I propose the following motion: that the shareholders pass the resolution to set the size of the Board at 4 members. This resolution must be passed by a majority of the votes cast in person or by proxy. Are there any questions on this resolution? If there are no further questions, please cast your votes on Item 1 before we move to Item 2. Please vote now. [Voting]

The next item of business is the election of directors. Nominated directors include Timothy Hanley, Susan Harnett, Duncan McEwan, myself and Patricia Trompeter. As Chair, I propose the following motion that the shareholders pass a resolution to elect Timothy Hanley, Susan S. Harnett, Duncan McEwan, and Patricia Trompeter as Directors of the company, as outlined in the proxy statement on Pages 9 through 11 to hold office until the close of the next Annual Meeting of Shareholders. This resolution must be passed by a majority of the votes cast in person or by proxy. Are there any questions? In the absence of any questions, please cast your votes on item 2 before we move on to item 3 and please vote now. [Voting]

The next item of business is to ratify the selection of auditors. Our auditors are currently MaloneBailey LLP. As Chair, I propose the following motion: that the shareholders pass the resolution to ratify the selection of MaloneBailey LLP as the company's auditors, as outlined in the proxy statement on Page 20. This resolution must be passed by a majority of the votes cast in person or by proxy. Are there any questions? Seeing no questions, please cast your votes on Item 3 before we move on to Item 4. Please vote now. [Voting]

Item 7 is the approval of the second amended and restated 2015 performance plan. This next item is to approve the amendment and restatement of this plan to increase the maximum number of common shares that may be issued under the plan by an additional 500,000 shares. As Chair, I propose the following motion: that the shareholders pass the resolution to approve an amended and restatement of the company's amended and restated 2015 performance incentive plan to increase the maximum number of common shares that may be issued under the plan by an additional 500,000 shares, as outlined in the proxy statement on Pages 22 through 27. This resolution must be passed by a majority of the votes cast in person or by proxy. Are there any questions? In the absence of any further questions, please cast your votes on Item 4 before we move to Item 5. Please vote now. [Voting]

The next item of business is to approve on an advisory basis the compensation of our named executive officers as disclosed in the proxy statement. As Chair, I propose the following motion: that the shareholders pass the resolution to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement on Page 28. This non-binding resolution must be passed by a majority of the votes cast in person or by proxy. Are there any questions? Please vote now. [Voting]

For those of you who have not yet voted on any or all of these resolutions, please do so now as I will shortly close the poll. I will close the polls on all resolutions in 10 seconds to allow online viewers to catch up. [Voting]

The polls are now closed. We have received the preliminary scrutineer's report, and it shows that all resolutions have been carried. And as there is no further business, we will shortly declare the meeting terminated. Thank you. However, I would like to extend our thanks before closing the meeting completely to our departing Board member, Vivekanand Mahadevan, for his long service to Sphere and particularly for his advice and counsel on our legacy business, which we have now divested and also thank David Danziger, who came on the board as a nominee of Hartford and whose sage advice and experience have been invaluable. Thanks to you both. I now declare this meeting terminated. Thank you.

Thank you for attending today's meeting. You may now disconnect.