Sphere 3D Corp. offers Bitcoin production and mining updates for April 2023

• Production was 35.59 Bitcoin

• The operation achieved 80.9 BTC/EH efficiency

• Uptime was 94% for April 2023

Toronto, Ontario–(Newsfile Corp. – May 9, 2023) – Sphere 3D Corp . (NASDAQ: ANY) (“Sphere 3D” or the “Company”), dedicated to becoming the leading carbon-neutral Bitcoin mining company operating on an industrial scale, provides results of its Bitcoin mining operations for the month ended April 30, 2023.

The CEO’s comments

“April was a pivotal month for Sphere 3D. We deployed the 4,400 miners we received in January to Rebel Mining for energization in May. We are on track to have 1.5EH/s online by the end of 2Q23. Rebel Mining was in able to test, prepare and install all miners in April.” Said Patricia Trompeter, CEO of Sphere 3D. “We were able to bring 3,900 of those miners online on May 1st^St with the rest planned for the following weeks.”

Compute North Update

There hasn’t been much movement in the Compute North bankruptcy. We continue to work with Compute North and their bankruptcy attorneys to recover our deposit through the Chapter 11 process. As previously disclosed, we filed our financial claim with the US Bankruptcy Court in February 2023 and we must wait for the process to continue.

Miner Delivery Update

We deployed 4,400 miners to Rebel Mining’s site in Missouri to get energy. Currently hash 3900 as of May 1st and the remaining 500 will be in the coming weeks. We expect to have additional hash rate online at Lancium’s Texas location from May and expect the majority of these to have hash by mid-June. Finally, we expect to deploy the remaining fleet to an existing host within the next 60 days. With the above deployments, we will have succeeded in deploying the majority of our fleet.

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Nuclear Science Update

As previously disclosed by the Company, Sphere 3D filed an arbitration request against Core Scientific (“Core”) on its claim for the non-refundable portion of the Company’s advance deposit. Core subsequently filed for Chapter 11 restructuring on December 21, 2022, citing burdensome debt obligations resulting from rising energy prices and the decline in the price of bitcoin. In recent publicly filed documents, it appears that Core is closer to stabilizing its operations. We continue to work with our litigants and the US Bankruptcy Court to monitor progress. Sphere 3D has engaged counsel and is aggressively pursuing all available options to recover its money.

The story continues

Gryphon update

On April 7, 2023, Sphere filed a lawsuit against Gryphon Digital Mining, Inc (“Gryphon”) in the US District Court for the Southern District of New York. Sphere alleges, among other things, that Gryphon materially breached its obligations to Sphere, both its contractual obligations under a Master Services Agreement dated August 19, 2021, and its fiduciary duties as a trustee of Sphere’s assets. The trial is at an early stage. Sphere intends to pursue the action vigorously.

Update of Bitcoin production and inventory

In April 2023, Sphere 3D produced 35.59 Bitcoin, or 1.15 per day. Sphere 3D’s mining fleet operated at 80.9 BTC/EH efficiency.

During April 2023, the company used a hybrid strategy to liquidate during bitcoin price increases and HODL the rest of its holdings. The company spent approximately 41.3 Bitcoin during the month to fund working capital, and prepaid hosting deposits for our S19J pros.

Bitcoin held by the Company represents a fair market value of approximately $0.5 million based on the Bitcoin price of $28,598 on April 30, 2023. As of April 30, 2023, the Company operated approximately 4,330 S19j Pros miners delivering a production capacity of approximately 446 PH /p.

Figure 1

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Other

We have seen Bitcoin stabilize during the first quarter. We believe this trend will continue over the next quarter as investors choose to move their money to Bitcoin given the recent instability in the banking system.

Sphere 3D closed a capital raising with LDA Capital which will fund our deposits to bring the remaining 7000+ miners online.

Our CEO, Patricia Trompeter, spent a day on The Hill with fellow Bitcoin industry colleagues to educate congressional staff on issues facing the Bitcoin industry while dispelling myths about Bitcoin and energy consumption.

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The CEO’s final comment

“I am very excited to bring the 4,400 miners online in the next couple of weeks. We spent a significant amount of time in April deploying, testing and installing these miners. We will almost double our Peta Hash as of May 1^St and continue to build our fleet in the coming weeks. April made for a transformative May! Thanks to my incredible team of warriors who made this happen!”

About Sphere 3D

Sphere 3D Corp. (NASDAQ: ANY) is a net carbon neutral cryptocurrency miner with decades of proven enterprise data services expertise. The company is increasing its mining operations on an industrial scale through capital-efficient acquisitions of next-generation mining equipment and collaboration with best-in-class data center operators. Sphere 3D is dedicated to increasing shareholder value while honoring its commitment to strict environmental, social and governance standards. For more information about the company, please visit Sphere3D.com.

Forward-looking statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events, including the timing of the proposed transaction and other information related to the proposed transaction. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “experts,” “plans,” “anticipate,” “could,” “intends,” “goals,” ” project”, “considers”, “believes”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these words or other similar terms or expressions. Expectations and beliefs regarding matters discussed herein may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The forward-looking statements in this communication are also subject to other risks and uncertainties, including those more fully described in filings with the SEC, including Sphere 3D’s reports filed on Form 10-K and Form 8-K and in other filings made by Sphere 3D with Sec from time to time and available at www.sec.gov. These forward-looking statements are based on current expectations, which are subject to change.

Sphere 3D contacts

Kurt Kalbfleisch CFO, Sphere 3D
[email protected]

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