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Clinton Group Letter to Sphere 3D

July 30, 2015

Sphere 3D Corp. 
240 Matheson Boulevard East 
Mississauga, Ontario, Canada L4Z1X1

Attention:          Board of Directors

Gentlemen:

As you know, we are a longstanding shareholder of Sphere 3D Corp. ("Sphere" or the "Company") and its predecessor entities and have been supportive of the Company's management team in the past.  We attended the Investor Briefing last month and were impressed with Microsoft's articulation of the strategic relationship with Sphere.  The Briefing also confirmed our enduring belief that Glassware and the Company's other offerings can be a blockbuster within virtualized applications, virtualized desktops and integrated storage platforms for the enterprise coupled with the right go-to-market strategy, balance sheet and management team with a history of sales execution.

The stock price today, down 26% since the merger with Overland Storage, suggests that the market has misinterpreted the great opportunities for Sphere.  I do not think we are alone in perceiving the valuation disconnect, as Roth Capital Partners initiated coverage on Sphere with an $8.00 price target a short time ago.  As we have articulated to you in the past, investing in a sales infrastructure and taking on added dilution are likely to have diminishing returns to shareholders in a future if the ultimate exit is a sale to a strategic buyer. 

Given the asymmetry of the stock price and the corporate opportunity, we believe it is prudent for the Board of Directors to evaluate a sale of the Company.  We believe the Company's technology and proof of concept in a number of situations will generate multi-party demand and result in a transaction price in excess of $10.00 a share today.

We appreciate your attention to this matter, and we are available at (212) 825-0400 should you wish to discuss further.

Sincerely yours,

//ss//

Joseph A. De Perio 
Senior Portfolio Manager