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   Sphere 3D Corporation: Corresp - Filed by newsfilecorp.com

    O’Melveny & Myers LLP
    T: +1 650 473 2600
    File Number:

    2765 Sand Hill Road
    F: +1 650 473 2601
    0642360-00033

    Menlo Park, CA 94025-7019
    omm.com

    April 10, 2018

    VIA EDGAR

    Folake Ayoola

    Division of Corporation Finance

    Office of Information Technologies and Services

    U.S. Securities & Exchange Commission

    100 F Street, N.E.

    Washington, D.C. 20549

    Re:
    Sphere 3D Corp.

    Preliminary Proxy Statement on Schedule 14A

    Filed February 27, 2018

    File No. 001-36532

Dear Ms. Ayoola:

On behalf of Sphere 3D Corp., an Ontario corporation (the
“Company”), this letter sets forth the Company’s responses to the
comments of the staff (the “Staff”) of the Securities and Exchange
Commission (the “Commission” or the “SEC”) set forth in your
letter dated March 12, 2018 (the “Comment Letter”), regarding the above
referenced preliminary proxy statement on Schedule 14A (the “Preliminary
Proxy Statement”).

For your convenience, we have reproduced the Staff’s comments
below and have provided a response below each comment. Capitalized terms used
but not defined in this letter shall have the meanings specified in the
Preliminary Proxy Statement.

Preliminary Proxy Statement on Schedule 14A filed February
27, 2018

Risk Factors relating to the Proposal to Approve the
Transaction Resolution, page 47

    1.

      You state on page 40 that shareholders should be aware
      that certain of the company’s directors and executive officers may have
      interests in the Share Purchase that are different from, or in addition
      to, those of your shareholders generally. Please revise to provide
      material risks related to the potential conflicts of
  interest.

      Response:

      In response to the Staff’s comment, the Company has
      revised page  49 of the Preliminary Proxy Statement to include the
      following risk factor:

    Century City • Los Angeles • Newport Beach •
      New York • San Francisco • Silicon Valley • Washington, DC
Beijing •
      Brussels • Hong Kong • London • Seoul • Shanghai • Singapore • Tokyo

“Certain of our executive officers and members of the
Board of Directors have interests in the Share Purchase that are different from,
or are in addition to, the interests of our Shareholders generally.

Certain of our executive officers
and directors have interests in the Share Purchase that are different from, or
are in addition to, the interests of our Shareholders generally, including,
among others, the payment of certain severance and equity acceleration
provisions that would be triggered as a result of the consummation of the Share
Purchase. These severance and equity acceleration provisions were agreed to by
the Company prior to the commencement of the negotiations with Purchaser. Our
Board of Directors was aware of these interests and considered them, among other
matters, in approving the Share Purchase Agreement and the Share Purchase and
making its recommendation that the Company shareholders vote in favor of the
Share Purchase. See the section of this proxy statement captioned “The Share
Purchase—Interests of Sphere 3D’s Directors and Executive Officers in the Share
Purchase” beginning on page  40 of this Proxy Statement for a detailed
description of the executive officers’ and directors’ material interests.”

    2.

      You state that you may fail to satisfy the continued
      listing standards of the NASDAQ Capital Market and may have to delist your
      common shares. Please provide us with a detailed analysis regarding the
      applicability of Rule 13e-3 of the Exchange Act to the proposed
      transaction. In this regard, we note that the Share Purchase may be deemed
      to constitute a sale of “substantially all of the assets” of the company
      and that Eric Kelly, the company’s chairman and chief executive officer,
      is a control person of the purchaser, Silicon Valley Technology Partners
      LLC. Additionally, you disclose that it is currently anticipated that the
      purchaser will offer to Kurt L. Kalbfleisch, the company’s chief financial
      officer, a position at Silicon Valley Technology Partners LLC to serve as
      the chief financial officer of the purchaser, and will offer to Jenny Yeh,
      the company’s general counsel, a position to serve as the general counsel
      of the purchaser. If you believe one of the exceptions in Rule 13e-3(g)
      applies, please identify the exception and outline the facts supporting
      your reliance on it. For guidance, please refer to the Going Private
      Transactions, Exchange Act Rule 13e-3 and Schedule 13E-3 Compliance and
      Disclosure Interpretations.

      Response: In response to the Staff’s comment, the Company
      respectfully advises the Staff that, after careful consideration of Rule
      13e-3, the Company determined (as further described below) that the
      proposed purchase of the outstanding shares of Overland Storage, Inc.
      (“Overland Storage”) by Silicon Valley Technology Partners LLC from the
      Company (the “Share Purchase”) does not constitute a “Rule 13e-3
      transaction” within the meaning of Rule 13e-3 because there is neither any
      reasonable likelihood nor any purpose of producing, either directly or
      indirectly, any of the effects described in Rule
13e-3(a)(3)(ii).

      Although a risk factor was included in the Proxy
      Statement which stated that the Company may fail to satisfy continued
      listing standards of The NASDAQ Capital Market and may have to delist the
      Company’s common shares, there is not a reasonable likelihood of such an
      effect. To satisfy the Continued Listing Standards of The NASDAQ Capital
      Market under Section 5550(a) and Section 5550(b)(1) thereof, an issuer
      must (i) have stockholders’ equity of at least $2.5 million, (ii) have at
      least 500,000 publicly held shares, (iii) have a market value of publicly
      held securities of at least $1 million, (iv) have a bid price of $1, (v) have at
least 300 public holders and (vi) have two market makers.

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The Company believes that it will
continue to satisfy such Continued Listing Standards of The NASDAQ Capital
Market, as more fully outlined below:

    •

      As set forth in the Pro Forma Financials, the Company
      expects to have stockholders’ equity of at least $2.5 million.

    •

      As of March 31, 2018, the Company had outstanding
      9,427,695 common shares, the vast majority of which are publicly held.

    •

      The Company reasonably believes that the bid price for a
      common share will be at least $1 per share following the consummation of
      the Share Purchase. First, by selling Overland Storage for $45 million,
      the Company will use the proceeds therefrom to repay its obligations under
      the Opus Credit Agreement, FBC Note and the MFV Note and upon the closing
      will no longer be liable for the obligations of Overland Storage. The
      Company believes that the loss of revenue from Overland Storage will be
      offset by the repayment of such outstanding debt and the Company’s ceasing
      to be responsible for the obligations of Overland Storage. Accordingly,
      the Company believes that the underlying value of the Company’s common
      shares will remain at least the same as prior to the consummation of the
      Share Purchase and given the three-month closing average per share price
      of the Company’s common shares ending on April 5, 2018 is $2.12 per share
      (which we believe more accurately reflects the value of the Company than
      the Company’s current share price), the Company believes the stock price
      will be at least $1 per share following the consummation of the Share
      Purchase.

    •

      The Company reasonably believes that following the
      closing of the contemplated transaction the publicly held common shares
      will have a market value in excess of $1 million. As noted above, the
      Company believes that following the closing of the Share Purchase, the
      Company will continue to have at least the same underlying value as prior
      to the consummation of the Share Purchase. Given that the vast majority of
      the shares of the Company are publicly held and that the Company’s current
      market capitalization is in excess of $8 million, the Company reasonably
      believes that the publicly held common shares will have a market value in
      excess of $1 million.

    •

      The Company has over 300 public shareholders.

    •

      The Company has at least two market makers.

Based on this information, there is
not a reasonable likelihood that the Company will not continue to meeting the
listing requirements of The NASDAQ Capital Market.

In response to the Staff’s comment and
based on the above, we will revise the Proxy Statement as follows:

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Page 3: “following the completion of the Share Purchase,
although we do not believe there is a reasonable likelihood of such an
effect, we may fail to satisfy the continued listing standards of The NASDAQ
Capital Market and may have to delist our Common Shares”

Page 13: “Even though we currently satisfy the continued
listing standards for The NASDAQ Capital Market and, although we do not
believe there is a reasonable likelihood of such an effect, there can be no
assurances that following the completion of the Share Purchase we will satisfy
the continued listing standards of The NASDAQ Capital Market.”

Page 17: “although we do not believe there is a reasonable
likelihood of such an effect, we may fail to satisfy the continued listing
standards of The NASDAQ Capital Market and may have to delist our Common Shares”

Page 49: “Following the completion of the Share Purchase,
although we do not believe there is a reasonable
likelihood of such an effect, we may fail to satisfy the
continued listing standards of The NASDAQ Capital Market and may have to delist
our Common Shares.

Even though we currently satisfy
the continued listing standards for The NASDAQ Capital Market and although we
do not believe there is a reasonable likelihood of such an effect, following
the completion of the Share Purchase, we may fail to satisfy the continued
listing standards of The NASDAQ Capital Market. In the event that we are unable
to satisfy the continued listing standards of The NASDAQ Capital Market, our
Common Shares may be delisted from that market. Any delisting of our Common
Shares from The NASDAQ Capital Market could adversely affect:

    •
    our ability to attract new investors;

    •
    decrease the liquidity of our outstanding
      Common Shares;

    •
    reduce our flexibility to raise additional
      capital;

    •
    reduce the price at which our Common Shares
      trade; and

    •
    increase the transaction costs inherent in
      trading such Common Shares with overall negative effects for our
      Shareholders.

In addition, delisting of our
Common Shares could deter broker-dealers from making a market in or otherwise
seeking or generating interest in our Common Shares, and might deter certain
institutions and persons from investing in our securities at all. For these
reasons and others, delisting could adversely affect the price of our Common
Shares and our business, financial condition and results of operations.”

General

    3.

      Please revise to include the financial information
      called for by Item 14 of Schedule 14A, including Items 14(c)(1), 14(c)(2)
      and (b)(8)-(11), as applicable. Your revision should include your audited
      financial statements for the most recent fiscal year and the unaudited
      financial statements of the business to be disposed for the two most
      recent fiscal years as well as pro forma
financial information giving effect to the disposition of the business
for the latest two completed fiscal years. Alternatively, please tell us why you
believe such financial information is not material. In this regard, we note that
the sale of your Overland Storage subsidiary to Silicon Valley Technology
Partners appears to involve a sale of substantially all your assets. We also
note that you do not intend to distribute the net proceeds of the Share Purchase
to your shareholders, but intend to use the proceeds from the Share Purchase to
repay outstanding obligations. We finally note that financing is not assured and
your disclosure that there is a risk that the financing may not be available.
For guidance, please refer to Section H.6. of our July 2001 Interim Supplement
to Publicly Available Telephone Interpretations.

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Response:

  In response to the Staff’s comment,
the Company has revised the Preliminary Proxy Statement to (i) include the
Company’s audited financial statements for the year ended December 31, 2017 by
incorporating by reference into the Preliminary Proxy Statement the Company’s
Annual Report on Form 10-K (File No. 001-36532) filed with the SEC on March 21,
2018, (ii) unaudited financial statements of the Overland Storage business,
excluding the Merged Business and the Snap Business for the two most recent
fiscal years and (iii) pro forma financial information of the Company giving
effect to the Share Purchase for the latest two completed fiscal years (the “Pro
Forma Financials”).

*****

If you have additional questions or require additional
information with respect to this letter, please do not hesitate to contact me at
(650) 473-2613 or psieben@omm.com with any questions or comments regarding this
letter.

    Sincerely,

    /s/ Paul Sieben

    Paul Sieben

    of O’Melveny & Myers LLP

    cc:
    Eric Kelly, Sphere 3D Corp.

    Jenny Yeh, Sphere 3D Corp.

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ANNEX A

The undersigned hereby acknowledges that in connection with the
Schedule 14A filed on February 27, 2018 (File No. 001-36532), as amended or
supplemented:

    •

      the Company 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; and

    •

      the Company 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.

Dated: April 10, 2018

    Sphere 3D Corp.

    By:
    /s/
      Eric Kelly

    Name:
    Eric Kelly

    Title:
    Chief Executive Officer

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