Sphere 3D Merger

Gryphon Digital Mining Announces Partnership with Sphere 3D Corporation with a Sphere 3D Merger

Sphere 3D Corporation: A Brief History

Gryphon Digital Mining Corp. ("Gryphon" or the "Company") (TSX-V: GDM) is pleased to announce that Gryphon has entered into a non-binding letter of intent ("LOI") with Sphere 3D Corporation a leading developer of innovative 3D technologies and solutions, in respect of a proposed business combination bringing together the 3D printing and Blockchain 3D digital asset mining businesses of the two companies.

Sphere 3D: The Future of Mining

As a result of this proposed transaction, Sphere 3D will become a thorough bred biotechnology, 3D printing and blockchain 3D imaging business. It will also become a leading manufacturer and distributor of 3D printers, 3D scanner and 3D software, 3D scanning solutions.

Sphere 3D Merger With Gryphon Digital Mining

The merger took effect on July 1, 2016, and Gryphon Digital Mining Inc. continued to develop Sphere 3D's 3D imaging software tools for cryptocurrency mining.

Upon merger, Gryphon Digital Mining Inc., the parent company of Sphere 3D will change its name to Sphere 3D Corp. Upon completion of the transaction, Sphere 3D Corporation will become a wholly-owned subsidiary of Gryphon with a transition period of approximately six months.

Reverse Merger Completion

Gryphon Digital Mining was pleased to announce that the previously announced acquisition of Sphere 3D Corporation by Gryphon Digital Mining had been completed. Sphere 3D (“Sphere”) is a technology company that develops 3D graphics and visualization software. Sphere is headquartered in Guelph, Canada and employs 21 people. Since 2010, Sphere has been developing and delivering advanced 3D modelling and visualization software to the market. Its flagship product, VISION3, is a feature-rich and intuitive 3D modeling and scanning software platform.

Sphere 3D Corporation was acquired by Gryphon Digital Mining Inc. (TSX-V: GDM) in consideration of 886,924 common shares of Gryphon, issued at a deemed price of $0.35 per share and additional payments in cash totaling $1 million.As part of the transaction, Gryphon will operate Sphere as a separate, independent subsidiary of Gryphon Digital Mining.

 

The Advantages Of Reverse Mergers

A reverse merger is a merge whereby a private company becomes a public company by acquiring it. Hence, it obtains a public company as an investment and transforms itself into a public company. Besides, the private company is saved from the expensive compliance and complicated process of becoming a public company. However, there is a different angle to the concept of a reverse merger. For instance, it is considered a reverse merger when a smaller company acquires a bigger one and not vice versa. Also, when a loss-making company receives a profit-making company, it is considered as a reverse merger. There are several benefits of reverse merging. Keep reading this post to understand why reverse merger is becoming a hot topic in the modern business world.

A Simplified Process

Reverse mergers enable a public company to become public minus raising capital, making if a considerably simplified process. Furthermore, conventional IPOs can take months to materialize, whereas reverse mergers take only a few weeks. Therefore, this will save management time and energy. Also, it ensures that there is sufficient time allotted to running the company.

Less Dependence on Market Conditions

Usually, the traditional IPO tend to combine both go-public and capital-raising functions. On the other hand, a reverse merger is exclusively a mechanism of converting a private company into a public entity. Besides, the process does not depend on the market conditions since the company is not into raising capital. Moreover, reverse merger acts as a conversion mechanism; hence the market conditions have a slight bearing on the offering. Additionally, the process is undertaken to realize the pros of being a public entity.

Benefits of a Public Company

Private companies with $100 million to several hundred million in revenue attract the prospect of going public. Therefore, the company's securities are traded on an exchange and enjoy greater liquidity. Furthermore, the original investors gain the ability to liquidate their entity, which provides a convenient exit alternative to have the company buy back their shares. The management can also issue additional stock over secondary offerings, making the company have greater access to capital markets. Hence, management has more diplomatic channels to pursue growth that include mergers and acquisitions. Sometimes, all that private entities require to become successful is reverse merger.

Public companies have opportunities to trade at higher multiples compared to private companies. Besides, the increased liquidity means that both institutional investors and the general public have access to the company's stock, which, in turn, can drive its price.  Additionally, as stewards of the acquiring company, they are eligible to use company stock as the currency to acquire target companies. Furthermore, since the public shares are more liquid, management can attract and retain employees through stock incentive plans.

Reverse Mergers 2019

Every year several private companies become public companies through the process of a reverse merger. These mergers are easier and quicker than an Initial Public Offering (IPO). When the private company mergers with the already public company, the new entity is a public corporation. The private group will purchase enough shares of the public company to take control and then exchanges its private shares for public shares.

Advantages of the Reverse Merger

1) The private company gains access to public markets in an efficient manner. They can increase their investor base and more easily acquire new funds.

2) The process is faster than the formal IPO process.

3) The overall costs can be smaller as fund raising is often avoided.

Disadvantages

1) The company needs to have an outside firm perform a public company audit to be SEC Compliant.

2) The process is often viewed with skepticism by investors when compared with the traditional IPO.

3) The NYSE and NASDAQ exchanges have new (2011) seasoning rules that require these new entities to stay out of the main markets and remain over the counter for a full year.

2019 Reverse Mergers

Diginex, a blockchain financial services company, was part of a reverse merger with 8i Enterprises Acquisition Corp. 8i was a publicly traded SPAC (special purpose acquisition company). Crypto currency industry players have found the reverse merger to be helpful in gaining the advantages we mention earlier, visibility, avoiding regulations, and gaining a investor base.

OKCoin, a crypto exchange, took control of the publicly traded LEAP Holdings Group (construction) with a $60 million investment.

Huobi, a crypto exchange, purchased shares of Pantronics Holdings LTD for $70 million to go public.