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   Sphere 3D Corporation: SEC Correspondence - Filed by newsfilecorp.com

October 14, 2014

Barbara C. Jacobs
Assistant Director
Securities and
Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549

    Re:
    Responses to the Securities
      and Exchange Commission

    Staff Comments dated September
      26, 2014, regarding

    Sphere 3D Corporation

    Amendment No. 1 Joint
      Proxy/Registration Statement on Form F-4

    Filed September 12, 2014

    File No. 333-197569

Dear Ms. Jacobs:

This letter responds to the comments of the staff of the United
States Securities and Exchange Commission (the “Staff”) set forth in the
September 26, 2014 letter (the “Comment Letter”) regarding the
above-referenced Amendment No. 1 to the Joint Proxy/Registration Statement on
Form F-4 (the “F-4”) of Sphere 3D Corporation (“Sphere 3D”) and
Overland Storage Inc. (“Overland”). For your convenience, the comments of
the Staff are included below in bold and we have numbered our responses
accordingly.

Concurrently with the filing of this response to the Comment
Letter, Sphere 3D has filed an amendment No. 2 to the F-4 (the “Amended
F-4”).

Our responses are as follows:

General

Staff Comment No. 1.

We refer to your response to prior
comment 2 explaining supplementally the economic substance behind the formula
and inputs used to calculate the merger consideration. Please disclose this
information in an appropriate place in the filing, and provide a cross-reference
to it in the forepart of the filing.

Sphere 3D Corporation’s Response:

             Sphere
3D has disclosed the economic substance behind the formula and inputs used to
calculate the merger consideration in the Amended F-4 on page 102 and included a
cross-reference to the disclosure on pages 2 and 25 in response to the Staff’s
comment.

Barbara C. Jacobs
Assistant Director
October 14, 2014

Page 2

Questions and Answers about the Merger and Special
Meeting

Q. What happens if the merger is not completed?, page
5

Staff Comment No. 2.

We note the disclosure added to this
Q&A in response to prior comment 9. Please further revise to provide a
cross-reference to a description elsewhere in the filing of the “certain
specified reasons” that would obligate Overland to pay the $3.5 million
termination fee if the merger is not consummated.

Sphere 3D Corporation’s Response:

Sphere 3D has further revised the disclosure in this Q&A on page 5 to
provide a cross-reference to a description elsewhere in the filing of the
“certain specified reasons” that would obligate Overland to pay the $3.5 million
termination fee if the merger is not consummated in response to the Staff’s
comment.

Risk Factors

Risks Relating to the Combined Company

“Future changes to U.S. tax laws could materially
adversely affect Sphere 3D,” page 34

Staff Comment No. 3.

Please expand the second paragraph
of this risk factor to explain how the Earnings Stripping Bill may affect Sphere
3D if enacted, as you have done with the Inversion Bill described in the prior
paragraph. In this regard, please clarify whether Sphere 3D may be considered a
company that engages in “certain inversion transactions” under the proposed
legislation.

Sphere 3D Corporation’s Response:

In response to the Staff’s comment, Sphere 3D has revised the disclosure in this
risk factor to state that in its current form the Earnings Stripping Bill is not
expected to apply to Sphere 3D after completion of the merger.

Barbara C. Jacobs
Assistant Director
October 14, 2014

Page 3

“Sphere 3D is an ‘emerging growth company’…,” page
36

Staff Comment No. 4.

We note that in response to prior
comment 1 you have added this risk factor regarding potential risks relating to
your status as an emerging growth company. Please revise the first sentence of
the second paragraph to clarify that you are referring here to the auditor
attestation report relating to internal control over financial reporting
pursuant to Section 404(b) of the Sarbanes-Oxley Act, as you indicate
subsequently in the risk factor.

Sphere 3D Corporation’s Response:

Sphere 3D has further revised the first sentence of the second paragraph of this
risk factor on page 37 to clarify that Sphere 3D is referring here to the
auditor attestation report relating to internal control over financial reporting
pursuant to Section 404(b) of the Sarbanes-Oxley Act, as indicated subsequently
in the risk factor, in response to the Staff’s comment.

“Fluctuations in the Canadian/United States exchange
rate…,” page 39

Staff Comment No. 5.

You have revised this risk factor in
response to prior comment 12 to indicate that “virtually all” of Sphere’s
revenues are in U.S. dollars and “more than half” of its operating expenses are
incurred in Canadian dollars. Please clarify in quantitative terms what is meant
by “more than half” in this context. We acknowledge the ensuing statement that
following the merger “the combined businesses’ operating expenses will be
primarily in United States dollars with Canadian denominated operating expenses
representing less than 5% of the combined entities’ operating expenses.” To the
extent you continue to present fluctuations in the exchange rate as a material
risk to the company or investors, please provide more specific disclosure
regarding the amount of operating expenses incurred by Sphere in Canadian
dollars so that investors may better understand the extent of the risk
described.

Barbara C. Jacobs
Assistant Director
October 14, 2014

Page 4

Sphere 3D Corporation’s Response:

Sphere 3D has removed the risk factor regarding the adverse effect of
fluctuations of the Canadian/United States exchange rate. On further analysis,
Sphere 3D has determined that given the low percentage of Canadian denominated
expenses of the combined entity (estimated to be 5%), and given the historical
fluctuations of the Canadian/United States exchange rate, fluctuations to the
exchange rate do not pose a material risk to the combined entity.

Treatment of Overland Restricted Stock Units and Options,
page 72

Staff Comment No. 6.

We refer to the clarifying
disclosure provided here in response to prior comment 16. The revised disclosure
indicates that based on the number of issued and outstanding Overland RSUs as of
September 3, 2014, it is not expected that additional RSUs beyond those that
vest according to their existing terms upon a change in control will be deemed
accelerated and vested immediately prior to the merger. Unless the chances of
additional RSUs being deemed accelerated and vested is so unlikely as to render
such disclosure immaterial, please indicate how it will be determined which
additional RSUs will be deemed accelerated and vested, in the event that the
RSUs that vest per their terms upon a change in control represent less than 50%
of all Overland RSUs then outstanding.

Sphere 3D Corporation’s Response:

Sphere 3D believes that the chance of additional RSUs being deemed accelerated
and vested is so unlikely as to render such disclosure immaterial because
greater than 50% of the issued and outstanding Overland RSU’s will vest in
accordance with their existing terms upon a change in control.

Sphere 3D’s Management’s Discussion and Analysis of
Financial Condition and Results of Operations

Overview, page 135

Staff Comment No. 7.

Please consider expanding the
MD&A overview to elaborate on how the merger with Overland is expected to
support Sphere’s business strategy, to the extent material. In this regard, we
note that the overview currently cites to the access to distributors, resellers,
independent software vendors, and original equipment manufacturers that your
relationship with Overland affords, but you may also wish to discuss briefly the complementary
nature of the companies’ products and/or other factors highlighted on page 61
that the Sphere board of directors considered in approving the merger. Please
also consider discussing here any material challenges anticipated in connection
with the contemplated merger, to the extent not already discussed in the bullet
point list beginning on page 136.

Barbara C. Jacobs

  Assistant Director
October 14, 2014

Page 5

Sphere 3D Corporation’s Response:

Sphere 3D has revised the disclosure on page 163 to include additional
information regarding the combined company in response to the Staff’s
comment.

Related Party Transactions of Directors and Executive
Officers of the Combined Company, page 163 Staff
Comment No. 8.

You have revised your disclosure in
this section in response to prior comment 24 to state that the covenants in the
note purchase agreements with Overland that the Cyrus Funds agreed to waive are
those “prohibiting certain change in control transactions and the incurrence of
indebtedness by Overland.” Please further clarify whether the waiver regarding
change in control transactions is limited to the proposed merger with Sphere,
and whether the waiver relating to the incurrence of indebtedness similarly is
limited to the $10 million loan from Sphere.

Sphere 3D Corporation’s Response:

In response to the Staff’s comment, Sphere 3D has further revised the disclosure
on page 190 to clarify that the waiver regarding change in control
transactions is limited to the proposed merger with Sphere 3D, and that the
waiver relating to the incurrence of indebtedness is limited to the up to $10
million loan from Sphere 3D.

Notes to the Consolidated Financial Statements for Sphere
3D Corporation

16. Subsequent Events

(b) V3 Asset Purchase Agreement, page F-35

Staff Comment No. 9.

We note from your response to prior
comment 29 that you concluded the V3 assets did not qualify as a business since
you acquired only certain assets and that only several attributes as set forth
in Regulation S-X Rule 11-01(d) and associated with these assets remained. However, we
also note that your disclosure on page F-35 describes you acquiring “…all the
assets, including patents, trademarks and other intellectual property of V3
Systems, Inc….” Please confirm the extent of your V3 asset acquisition and your
related consideration of the degree to which the nature of the revenue-producing
activity of these assets will remain generally the same as before your
acquisition. We refer you to Regulation S-X Rule 11-01(d)(1).

Barbara C. Jacobs

  Assistant Director
October 14, 2014

Page 6

Sphere 3D Corporation’s Response:

Sphere 3D advises the Staff that the subsequent event note disclosure on
page F-35 of the Amended F-4, referred to in the Staff’s comment 9,
inadvertently contained an error. Sphere 3D directs the Staff to the disclosure
contained in footnotes 6(ii) and 8(ii), of Sphere 3D’s financial statements for
the subsequent periods ended March 31, 2014 and June 30, 2014, respectively,
which correctly describe the nature of the transaction between Sphere 3D and V3
Systems, Inc. (“V3 Systems”), as the purchase of only certain
intellectual property assets (the “V3 Transaction”). Accordingly, Sphere
3D has corrected the subsequent event note disclosure on page F-35 of the
Amended F-4 to conform to
the disclosure included in the above-noted financial statements. As stated in
Sphere 3D’s response letter to the Staff dated September 11, 2014, after
analyzing Article 11 of Regulation S-X Sphere 3D properly concluded that the
assets acquired from V3 Systems did not constitute a business within the meaning
or Regulation S-X Rule 11-01(d). As previously stated, for purposes of analysis
under Rule 11-01(d)(2), Sphere 3D did not acquire from V3 Systems (i) any
physical facilities, (ii) employees, (iii) product distribution systems or
methods, (iv) sales force, or (v) production techniques. Sphere 3D’s primary
purpose for the transaction was the acquisition of trademarks and certain IP
which was employed in part in a substantially redesigned and rebranded product
(the “Updated Product”) offered by Sphere 3D. While certain prior
customers of V3 Systems have purchased the Updated Product from Sphere 3D
following the V3 Transaction, such customers constitute only a small part of the
customer base for the Updated Product. Subsequent to the V3 Transaction, Sphere
3D immediately engaged its development staff to redesign and upgrade the prior
V3 product offering (the “V3 Product”) to current standards, established
a supply agreement with Sphere 3D’s contract manufacturer and engaged a software
developer to rewrite the base software code to render it compatible with the
then current versions of required third party software.

Barbara C. Jacobs
Assistant Director
October 14, 2014

Page 7

Prior to the V3 Transaction, V3 Systems had effectively ceased operations.
Approximately 12 months prior to the V3 Transaction, V3 Systems had terminated
55 of its then approximately 60 employees. The remaining employees were retained
to provide limited after-market support to the existing customer base and to
attempt to raise new capital. At the same time V3 Systems had ceased development
and updates to its product offering. Because of this cessation of development,
the V3 Product had become incompatible with required third-party software and
could no longer be deployed for its intended use. As a result, sales of the V3
Product had ceased prior to the V3 Transaction. In addition, due to lack of
capital, V3 Systems could not purchase the hardware components required for the
V3 Product. As such no revenue was being generated by V3 Systems for approximately the six
months prior to the V3 Transaction. In light of the above, and in consideration
of Regulation S-X Rule 11-01(d)(1), Sphere 3D believes that the nature of the
revenue-producing activity of the assets acquired from V3 Systems cannot be
considered generally the same as the nature of the revenue generated by those
assets prior to the transaction, as there were no revenues being generated by
the assets or by V3 Systems prior to the transaction. Evaluating Rule 11-01(d)
of Regulation S-X and the facts and circumstances involved with the V3
Transaction, Sphere 3D concluded that it did not acquire a business, as there
was insufficient continuity of the acquired operations prior to and after the
transaction such that any prior financial information (if it was available)
would not be useful in understanding the future operations of Sphere 3D.

* * * * *

In connection with this response to the Staff’s comments, Sphere 3D Corporation
hereby acknowledges that:

  Sphere 3D Corporation is responsible for the adequacy and accuracy of the
  disclosure in the filing.

  Staff comments or changes to disclosure in response to staff comments do
  not foreclose the Commission from taking any action with respect to the
  filing.

  Sphere 3D Corporation may not assert staff comments as a defense in any
  proceeding initiated by the Commission or any person under the federal
  securities laws of the United States.

Thank you for your review of the filing. If you should have any
questions regarding the response letter, please do not hesitate to contact the
undersigned at (416) 749-5999 or Richard Raymer of Dorsey & Whitney LLP at
(416) 367-7388.

Sincerely,
Sphere 3D Corporation

/s/ Scott Worthington
Scott
Worthington
Chief Financial Officer

cc:        Richard Raymer,
Dorsey & Whitney LLP