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

• Increased production by 111% month over month to 37.84 Bitcoin
• The operation achieved 108.9 BTC/EH efficiency

Toronto, Ontario – (Newsfile Corp. – February 17, 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, reports its Bitcoin mining results for the month ended January 31, 2023.

The CEO’s comments

“January was another pivotal month for Sphere 3D, receiving approximately 11,000 miners and a long-awaited increase in the price of bitcoin. When fully deployed and hashing, Sphere 3D’s fleet will total approximately 15,000 units, with a production capacity of over 1.6 EH/s.

“We have started the new year with momentum. We have several thousand miners ready to be deployed pending the finalization of final hosting agreements. In January, we saw the price of bitcoin rise and sustain prices above $20,000. We have taken advantage of this market rally and have liquidated the majority of our previously mined bitcoin holdings. Last year was challenging for the industry, but we believe that the market will begin to stabilize in the first quarter. Our team is working hard to ensure that all miners are deployed and hashing by the end of the first quarter.”

Compute North Update

In January 2023, all 3,336 miners at the Wolf Hollow site were activated. We expect them to continue hashing. We continue to work with Compute North to return our deposit through the Chapter 11 process.

Miner Delivery Update

In January, around 11,850 S19J Pro104T miners landed and cleared customs in accordance with the amended terms of the company’s contract with a supplier. We expect distribution to hosting partners pending execution of final agreements in the coming weeks.

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. Sphere 3D has engaged counsel and is aggressively pursuing all available options to recover its money. Sphere 3D CEO Patricia Trompeter was appointed to the unsecured creditor committee as designated by the United States Trustee.

Update of Bitcoin production and inventory

In January 2023, Sphere 3D produced 37.84 Bitcoin, or 1.26 per day. Sphere 3D’s mining fleet operated at 108.9 BTC/EH efficiency. Daily production volume increased by 118 percent compared to December 2022.

During January 2023, the company employed a hybrid strategy of liquidating during bitcoin price rallies and HODLing the rest of its holdings. The company spent approximately 121.65 Bitcoin during the month to finance working capital, customs duties, taxes, insurance and shipping related to the delivery of approximately 11,850 S19J Pros.

Bitcoin held by the Company represents a fair market value of approximately $0.4 million based on the Bitcoin price of $23,079 on January 31, 2023. As of January 31, 2023, the Company operated approximately 4,330 S19j Pros miners delivering a production capacity of approximately 433 PH/ pp.

BITCOIN PRODUCTION AND HOLDINGS

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The CEO’s final comment

“We continue to deploy the additional miners that will significantly increase our production capacity. We are in a strong position to grow this quarter. We continue to execute our operations while evaluating new growth opportunities to drive growth in 2023.”

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 may 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 20-F and Form 6-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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