Sphere 3D Corp. Concludes 90-Day Strategic Review, Announces Pricing of $5.0 Million Private Placement, and Divests Non-Core Assets to Fund AI and High-Performance Computing Development

Sphere 3D is raising cash and divesting mining assets to refocus roughly 50 MW of existing capacity and new projects on AI and high-performance computing.

Rhea-AI Summary

Sphere 3D (ANY) launched a $5.0 million private placement and moved to exit non-core mining assets after a 90-day strategic review.

The company will sell 1,666,661 units at $3.00 per unit, each unit comprising one common share and a five-year warrant exercisable at $3.50. Pricing reflects a 29% and 51% premium, respectively, to the September 4, 2026 closing price, and all securities are subject to a six-month lock-up. Three directors, including the chairman and CEO, subscribed for 333,332 units for about $1.0 million.

Sphere 3D agreed to sell its Iowa site for $1.5 million and expects about $500,000 of additional recoveries, and to sell its legacy fleet of roughly 5,500 mining machines for about $3 million. Proceeds will support AI and high-performance computing development in the Tennessee Valley Authority region, including a proposed 50 MW Hopkinsville, Kentucky data center and a company-funded 65 MW substation costing an estimated $8–$10 million, all subject to required approvals.

Positive

• Private placement gross proceeds of $5.0 million at $3.00 per unit
• Units and warrants priced at 29% and 51% premiums to September 4, 2026 close
• Insider participation of 333,332 units for approximately $1.0 million
• Iowa site sale and recoveries expected to generate about $2.0 million
• Legacy fleet sale expected to add approximately $3.0 million of proceeds
• Post-Iowa portfolio will have about 50 MW energized capacity across four Tennessee and Kentucky sites

Negative

• Private placement issues 1,666,661 new shares plus an equal number of five-year warrants, creating dilution
• Proposed Hopkinsville data center and 65 MW substation remain subject to zoning and other approvals
• Company expects to fund new 65 MW substation at an estimated $8–$10 million cost
• Related party subscriptions up to about $1.0 million are classified as related party transactions under MI 61-101
• Private placement securities are unregistered in the U.S. and subject to resale restrictions

News Explained

The $5.0 million financing is agreed but not closed; completion would add shares and warrants, reducing existing holders’ percentage ownership if no offset.

Sphere 3D has entered a purchase agreement for a private placement expected to close on or about September 11, 2026; if completed, it would issue 1,666,661 common shares and one five-year warrant per unit, increasing the share count and reducing existing holders’ percentage ownership absent offsetting changes.

The release describes a $5.0 million private placement, but says aggregate gross proceeds are expected and closing remains subject to customary conditions, so that funding has not yet been realized.

The expected September 11, 2026 closing is the named near-term checkpoint, with the stated closing conditions still outstanding.

Key Figures

Gross proceeds: $5.0 million Expected closing date: September 11, 2026 Units issued: 1,666,661 units +5 more

Gross proceeds

$5.0 million

Private placement

Expected closing date

September 11, 2026

Subject to customary closing conditions

Units issued

1,666,661 units

Private placement

Purchase price

$3.00 per unit

Private placement

Warrant exercise price

$3.50 per share

Five-year warrants

Unit price premium

29%

Premium to September 4, 2026 closing price

Warrant exercise premium

51%

Premium to September 4, 2026 closing price

Contractual lock-up

Six months

Securities issued in the private placement

Key Terms

private placement, warrant, related party transaction, mi 61-101, +1 more

5 terms

private placement financial

"financing (the "Private Placement") which is expected to result"

A private placement is a sale of securities directly to a selected group of investors, typically institutions or accredited investors, instead of through a public offering. It lets a company raise money faster and with fewer regulatory steps; for existing shareholders it matters because the newly issued shares, often sold at a discount, increase the share count and can dilute their ownership.

warrant financial

"one five-year warrant to purchase one common share"

A warrant is a time-limited financial contract that gives its holder the right to buy a company's shares at a set price before a specified date, like a coupon that lets you purchase stock at a fixed discount for a limited time. It matters to investors because warrants offer leveraged exposure to a stock’s upside and can dilute existing shareholders if exercised, so they affect potential gains and the company’s outstanding share count.

related party transaction regulatory

"Each issuance by the Company ... is considered a "related party transaction""

A related party transaction is any deal or transfer of value between a company and people or entities with close ties to it — such as executives, major owners, family members, or affiliated businesses. Investors watch these transactions because they can favor insiders over outside shareholders, skirt fair market pricing, or hide risks; like selling your car to a relative at a friendly price, they require clear disclosure and scrutiny to judge impact on value.

mi 61-101 regulatory

"within the meaning of Multilateral Instrument 61-101"

MI 61-101 is a Canadian securities rule that sets procedures for major deals involving insiders or controlling shareholders, requiring independent valuations, extra disclosure and often shareholder approval to protect minority holders. It matters to investors because it acts like an impartial referee and independent appraiser, reducing the chance that people in control can push through unfair sales, mergers or asset transfers that would harm ordinary shareholders.

high-performance computing technical

"AI and High-Performance Computing Development"

A cluster of very powerful computers, special chips and fast networks designed to tackle huge, complex calculations far faster than a normal PC — like replacing a single delivery van with a synchronized fleet to move a city’s worth of packages. For investors, high-performance computing matters because it enables faster product development, more accurate simulations and data analysis, and new revenue streams for hardware, software and services, making firms that supply or use it potentially more competitive and scalable.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Three Directors, Including the Board Chairman and Chief Executive Officer, are participating in the Private Placement; Sale of Non-Core Iowa Site and Legacy Mining Fleet to Fund AI and High-Performance Computing Development in the TVA Region; Company Secures Land Option in Hopkinsville, Kentucky

Stamford, Connecticut--(Newsfile Corp. - September 8, 2026) - Sphere 3D Corp. d/b/a DarkHorse Technologies (NASDAQ: ANY) ("Sphere 3D" or the "Company"), today announced that it has entered into a securities purchase agreement (the "Purchase Agreement") for a private placement financing (the "Private Placement") which is expected to result in aggregate gross proceeds of $5.0 million. The Private Placement includes meaningful participation from certain Company insiders as described below. In addition, the Company has announced the initial conclusions of the strategic review conducted by management and the Board of Directors during the first 90 days following its June 2026 business combination. The review's conclusions include continued development of our existing sites within the Tennessee Valley Authority ("TVA") into AI factories along with active pursuit of a new development in Hopkinsville, Kentucky, where the Company, via a wholly owned subsidiary, has secured a land option and has proposed a new 50 megawatt ("MW") data center supported by a new 65 MW substation, each of which remains subject to zoning and other approvals. The review also determined that the Iowa site and legacy mining fleet are non-core, and the Company has agreed to sell both.

Private Placement. The Company announced the pricing of the Private Placement which is expected to result in aggregate gross proceeds of $5.0 million. The Private Placement is expected to close on or about September 11, 2026, subject to customary closing conditions. Pursuant to the Private Placement, the Company agreed to issue and sell an aggregate of 1,666,661 units (the "Units") at a purchase price of $3.00 per Unit. Each Unit consists of (i) one common share of the Company and (ii) one five-year warrant to purchase one common share at an exercise price of $3.50 per share. The price per Unit and the exercise price of the warrant represent a 29% and 51% premium, respectively, to the Company's closing price on September 4, 2026. Further, pursuant to the terms of the Purchase Agreement, the securities issued in the Private Placement will be subject to a six-month contractual lock-up period. Three directors of the Company, including Timothy Hanley, Chairman of the Board, and Joel Block, Chief Executive Officer, have subscribed in the Private Placement (collectively, the "Participating Insiders"). The Company intends to use the net proceeds from the Private Placement for general corporate purposes, including funding the Company's AI/HPC development in the TVA region.

Hopkinsville. The Company has secured an option to acquire approximately 20 acres in Hopkinsville, Kentucky and has proposed developing a new data center at the site drawing approximately 50 MW, supported by a new 65 MW substation that we have offered to fund at an estimated cost of $8 million to $10 million. The remaining 15 MW of capacity will be made available to other Hopkinsville Electric System ("HES") customers. HES has publicly indicated that the TVA could supply the additional capacity without affecting service to its approximately 13,000 existing customers. The proposal has not yet received all requisite regulatory approvals which could affect the project's feasibility, timing, or scope. Separately, the Company is evaluating conversion of its existing Hopkinsville operation, which is contracted to draw approximately 15 MW at HES's Holland Substation, to AI and high-performance computing use.

Portfolio Focus. Following the review, management and the Board determined that the Company's Iowa site is a non-core asset and the Company has entered into a definitive agreement to sell the site for $1.5 million. Additionally, the Company expects to recover approximately $500,000 in utility deposits and related prepayments, bringing total proceeds to approximately $2 million. Together with the expected proceeds of the Private Placement, the Company will deploy funds toward the development of AI and high-performance computing infrastructure across its Tennessee and Kentucky sites. The Company has also agreed to sell its legacy fleet of approximately 5,500 proprietary mining machines for approximately $3 million. Following the Iowa sale, the Company will own and/or operate approximately 50 MW of energized capacity across four sites in Tennessee and Kentucky, reflecting an additional 5 MW now under contract in Hopkinsville, and excluding the proposed new Hopkinsville data center and other pipeline opportunities.

Mining Structure. With Bitdeer Technologies Group (NASDAQ: BTDR) now supplying and owning the hardware at 20 MW of the 30 MW contracted under the Company's joint mining agreements and the third site expected online before November 2026 as previously disclosed, the Company's bitcoin mining exposure is structured primarily through revenue-share hosting arrangements. The Company controls the power and the sites and the termination provisions in these agreements preserve the Company's ability to redeploy capacity to AI and high-performance computing workloads.

Development Roadmap. The strategy that emerged from the review is to develop AI and high-performance computing facilities across smaller, distribution-connected sites that larger developers overlook. Priorities will include speed from site to operating compute, partnership with host communities and their utilities, and investment in local technical education and workforce training. The new Hopkinsville data center is the first project advanced under this approach. The Company intends to concentrate its development effort in the TVA region, where its existing footprint, utility relationships, and government affairs and economic development partnerships are already in place.

"One of the primary initiatives of this management team is to allocate capital on a risk-adjusted basis, and the first 90 days were spent deciding where every dollar and every hour goes," said Joel Block, Chief Executive Officer of Sphere 3D Corp. "We determined, in consultation with our Board, that our Iowa site is non-core. We are selling that site and our legacy mining fleet and redeploying that capital, together with the proceeds from the Private Placement, into AI infrastructure in the TVA region. I believe the participation of our directors in the Private Placement, including me, speaks volumes to the value we see in Sphere 3D."

The Participating Insiders subscribed for a total of 333,332 Units for aggregate gross proceeds of approximately $1.0 million. Each issuance by the Company of securities to a Participating Insider in connection with the Private Placement is considered a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is exempt from the formal valuation and minority shareholder approval requirements under MI 61-101 in reliance on the exemptions set out in sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101 as the fair market value of such transactions, insofar as they involve related parties, is not more than 25% of the Company's market capitalization.

The securities in the Private Placement described above are being offered in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and pursuant to applicable prospectus exemptions under Canadian securities laws. The securities have not been registered under the Securities Act or applicable state securities laws and, accordingly, may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The securities may also be subject to applicable hold periods and other resale restrictions under applicable Canadian securities laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Sphere 3D Corp.

Sphere 3D Corp. (NASDAQ: ANY), doing business as DarkHorse Technologies, is a digital infrastructure company focused on operating and expanding scalable power and data center assets for high-performance computing, AI workloads and digital asset infrastructure. Following its business combination with Cathedra Bitcoin and the sale of its Iowa site, the Company owns and/or operates approximately 50 MW of operating power capacity across four data center locations in Tennessee and Kentucky, and has a proposed new 50 MW data center in Hopkinsville, Kentucky, together with a development pipeline exceeding 100 MW of additional potential expansion opportunities. The Company combines infrastructure ownership, energy optimization expertise and capital markets access to pursue long-term value creation across next-generation compute infrastructure. The Company's shareholders have approved the change of the Company's name to DarkHorse Technologies Inc., which will become effective upon the Company's continuance from Ontario to British Columbia, and the Company has reserved the Nasdaq ticker "DRK," with the name and ticker changes subject to Nasdaq procedures and other conditions. Until those changes are effective, the Company's common shares will continue to trade on Nasdaq under the ticker symbol "ANY." For more information, visit www.sphere3d.com/investors.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events and include statements regarding the Company's strategy, plans and objectives; the completion of the Private Placement on the anticipated terms, timing or at all, the conclusions of the Company's strategic review; the proposed Hopkinsville data center and the related 65 MW substation, including their design, estimated cost, funding, construction and energization and the availability of capacity to other local utility customers, each of which depends on Hopkinsville Electric System, the Tennessee Valley Authority, zoning and other regulatory approvals, and construction timelines outside the Company's control; the potential conversion of the Company's existing Hopkinsville operation; the completion of the sale of the Company's Iowa site and the expected recovery of utility deposits and related prepayments, which are subject to conditions and may not occur; the sale of the Company's legacy mining fleet; the use of proceeds of the Private Placement and the potential dilution associated with the warrants issued in the Private Placement; the installation, energization and expected benefits of the co-mining agreements with Bitdeer and the Company's ability to redeploy capacity to AI and high-performance computing workloads; the utilization, evaluation, conversion and expansion of the Company's power and data center assets and any AI or high-performance computing deployment, none of which is contracted; the expected completion and timing of the Company's continuance from Ontario to British Columbia, including the receipt of required regulatory approvals; and the expected effectiveness of the Company's name change to DarkHorse Technologies Inc. and related change of Nasdaq ticker symbol to "DRK," which remain subject to Nasdaq procedures and other conditions and may not occur on the anticipated timeline or at all. In some cases, forward-looking statements can be identified by words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of these words or other similar terms or expressions. Expectations and beliefs regarding these matters may not materialize, and actual results are subject to risks and uncertainties that could cause them to differ materially from those projected. These risks and uncertainties include general market conditions and those more fully described in the Company's filings with the Securities and Exchange Commission, including its reports on Forms 10-K, 10-Q and 8-K and other filings made from time to time and available at www.sec.gov. Forward-looking statements speak only as of the date they are made and are based on information available at that time. The Company does not assume any obligation to update forward-looking statements to reflect subsequent circumstances or events, except as required by applicable securities laws.

Sphere 3D Contact

Investor.relations@sphere3d.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/313457

FAQ

What are the detailed terms of Sphere 3D's private placement units?

Each of the 1,666,661 units is priced at $3.00 and consists of one common share and one warrant. Each warrant is exercisable for one common share at an exercise price of $3.50 per share for five years. The securities are subject to a six-month contractual lock-up and are being offered under exemptions from U.S. registration and Canadian prospectus requirements.

How does Sphere 3D plan to use the proceeds from the private placement and asset sales?

The company intends to use the net proceeds from the $5.0 million private placement, together with about $2.0 million from the Iowa site sale and related recoveries and approximately $3.0 million from the legacy mining fleet sale, for general corporate purposes, including funding AI and high-performance computing development across its Tennessee Valley Authority region sites.

What is included in the Hopkinsville, Kentucky development plan?

Sphere 3D has secured an option to acquire about 20 acres in Hopkinsville, Kentucky and has proposed a 50 MW data center at the site. The project would be supported by a new 65 MW substation that the company has offered to fund at an estimated cost of $8–$10 million. The remaining 15 MW of substation capacity would be available to other Hopkinsville Electric System customers, and all elements remain subject to required zoning and regulatory approvals.

What changes is Sphere 3D making to its asset portfolio after the strategic review?

Management and the board determined the Iowa site is non-core and entered a definitive agreement to sell it for $1.5 million, with an expected additional $500,000 from utility deposits and prepayments. The company also agreed to sell roughly 5,500 proprietary mining machines for approximately $3 million. After the Iowa sale, it expects to own and/or operate about 50 MW of energized capacity across four sites in Tennessee and Kentucky, including an extra 5 MW now under contract in Hopkinsville.

How is Sphere 3D's bitcoin mining exposure structured following its agreements with Bitdeer?

Under joint mining agreements, Bitdeer now supplies and owns the hardware at 20 MW of the 30 MW contracted. A third site is expected online before November 2026. Sphere 3D's exposure is primarily through revenue-share hosting arrangements in which the company controls power and sites, and the termination provisions allow it to redeploy capacity to AI and high-performance computing workloads.

What regulatory framework applies to insider participation in the private placement?

Subscriptions by three directors, including the chairman and CEO, totaling 333,332 units and about $1.0 million, are considered related party transactions under MI 61-101. The company states it relies on exemptions from the formal valuation and minority shareholder approval requirements because the fair market value of these transactions, as they involve related parties, is not more than 25% of the company's market capitalization.

What is Sphere 3D’s longer-term development roadmap after the review?

The company plans to develop AI and high-performance computing facilities across smaller, distribution-connected sites, focusing on speed from site to operating compute, partnerships with host communities and utilities, and investment in local technical education and workforce training. It intends to concentrate development in the TVA region, where it already has operating sites, utility relationships, and government and economic development partnerships, with the proposed Hopkinsville data center as the first project advanced under this approach.