false
2026-03-05
0001591956
Sphere 3D Corp.
0001591956
2026-03-05
2026-03-05
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 5, 2026
SPHERE 3D CORP.
(Exact name of registrant as specified in its charter)
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Ontario
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001-36532
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98-1220792
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| (State or other jurisdiction |
(Commission |
(IRS Employer |
| of incorporation) |
File Number) |
Identification No.) |
243 Tresser Blvd, 17th Floor
Stamford, Connecticut, United States
06901
(Address of principal executive offices) (ZIP Code)
Registrant’s telephone number, including area code: (647) 952 5049
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
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Trading Symbols |
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Name of each exchange on which registered |
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Common Shares
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ANY
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NASDAQ Capital Market
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Arrangement Agreement
On March 5, 2026, Sphere 3D Corp., a company existing under the laws of the Province of Ontario, Canada ("Sphere"), S3D Acquisition Corp., a company existing under the laws of the Province of British Columbia, Canada and a wholly-owned subsidiary of Sphere ("Amalco Sub"), and Cathedra Bitcoin Inc., a company existing under the laws of the Province of British Columbia, Canada ("Cathedra"), entered into an Arrangement Agreement (the "Arrangement Agreement"), pursuant to which, on the terms and subject to the conditions set forth therein, Sphere has agreed to acquire Cathedra in a stock-for-stock transaction, subject to satisfaction of certain closing conditions (the "Arrangement"). The Arrangement will be effected by way of a plan of arrangement under the Business Corporations Act (British Columbia) (the "Plan of Arrangement").
Pursuant to the Arrangement Agreement, at the effective time of the Arrangement (the "Effective Time"), Amalco Sub will acquire all of the issued and outstanding subordinate voting shares of Cathedra (the "Cathedra SV Shares") and multiple voting shares of Cathedra (the "Cathedra MV Shares" and together with the Cathedra SV Shares, the "Cathedra Shares") (other than those Cathedra Shares held by dissenting Cathedra shareholders), and each holder of Cathedra SV Shares (other than the dissenting Cathedra shareholders) will receive 0.123014 common shares of Sphere (the "Sphere Common Shares") for each Cathedra SV Share held (the "SVS Exchange Ratio") and each holder of Cathedra MV Shares will receive 12.3014 Sphere Common Shares for each Cathedra MV Share held (the "MVS Exchange Ratio", and together with the SVS Exchange Ratio, the "Exchange Ratios"), subject to adjustment in accordance with the Arrangement Agreement; provided, however, that certain Cathedra shareholders who would otherwise receive Sphere Common Shares in excess of seven (7%) percent of the then-outstanding Sphere Common Shares (on a non-diluted basis following consummation of the Arrangement as set forth in the Plan of Arrangement) (the "Ownership Cap") will instead receive, in lieu of the number of Sphere Common Shares in excess of the Ownership Cap, an equivalent number of shares of a new series of preferred stock of Sphere (to be named Series I preferred shares) to be created in connection with the Arrangement (the "Sphere Preferred Shares" and together with the Sphere Common Shares, the "Sphere Shares"). Each Cathedra MV Share is convertible into 100 Cathedra SV Shares, and, except as set forth in the articles of amendment to be filed for such Sphere Preferred Shares, each Sphere Preferred Share is convertible into one Sphere Common Share on the following schedule: (a) up to 33-1/3% of such Sphere Preferred Shares following the 12-month anniversary of the Closing (defined below); (b) up to an aggregate of 66-2/3% of such Sphere Preferred Shares following the 24-month anniversary of the Closing; and (c) up to an aggregate of 100% of such Sphere Preferred Shares following the 36-month anniversary of the Closing, in each case, excluding any additional Sphere Preferred Shares issued as dividends to the holders of Sphere Preferred Shares in accordance with the terms of the articles of amendment to be filed. Accordingly, holders of Cathedra MV Shares are receiving the economic equivalent consideration as holders of Cathedra SV Shares. Warrants, stock options and unvested restricted share units of Cathedra will be exchanged to become warrants, stock options and restricted share units (the "Replacement Equity"), respectively, of Sphere based on the SVS Exchange Ratio.
The Arrangement Agreement provides that, on the terms and subject to the conditions set forth therein and applicable rules and regulations, the board of directors of Sphere immediately following the Effective Time shall be composed of Tim Hanley, Marcus Dent, Kurt Kalbfleisch, Joel Block and Nicholas Gates, with Mr. Hanley serving as Chairman.
The closing of the Arrangement (the "Closing") is subject to certain conditions, including, among others, (i) the approval of the Arrangement by at least 66 2/3% of the votes cast by holders of Cathedra SV Shares and holders of Cathedra MV Shares, voting as a single class, present in person or by proxy at a meeting of Cathedra securityholders (the "Cathedra Meeting"), (ii) the approval of the Arrangement by at least 66 2/3% of the votes cast by holders of Cathedra SV Shares, holders of Cathedra MV Shares, holders of Cathedra stock options, holders of Cathedra warrants and holders of Cathedra restricted share units, voting as a single class, present in person or by proxy at the Meeting, (each of (i) and (ii), the "Cathedra Shareholder Approval"), (iii) the approval of the issuance of Sphere Common Shares and Sphere Preferred Shares to be issued in exchange for Cathedra Shares and vested Cathedra restricted share units pursuant to the Arrangement (the "Sphere Resolution") by a majority of Sphere shareholders present in person and by proxy at a meeting of Sphere shareholders (the "Sphere Shareholder Approval" and such meeting, the "Sphere Meeting"), (iv) the approval of the Arrangement by the Supreme Court of British Columbia on terms consistent with the Arrangement Agreement and otherwise reasonably satisfactory to Sphere and Cathedra, (v) the absence of an objection by NASDAQ for listing of the Sphere Common Shares issuable pursuant to the Arrangement Agreement and the Sphere Common Shares issuable pursuant to the Sphere Preferred Shares and the Replacement Equity, (vi) certain members of management and consultants of Cathedra entering into employment agreements with Sphere, in form and substance acceptable to Sphere and Cathedra, (vii) receipt by Sphere of voting agreements from certain Cathedra shareholders, in form and substance satisfactory to Sphere and Cathedra, acting reasonably, pursuant to which, for a period of 24 months following the Closing, such shareholders agree to vote all Sphere Common Shares held by them at any meeting of Sphere's shareholders in accordance with the recommendations of Sphere's board of directors, and (viii) the absence of any law or order prohibiting the consummation of the Arrangement.
The obligation of each party to consummate the Arrangement is also conditioned upon (i) the other party's representations and warranties being true and correct (subject to certain materiality thresholds), (ii) the other party having performed in all material respects its obligations under the Arrangement Agreement, and (iii) the absence of material adverse effect in respect of the other party.
The Arrangement Agreement contains certain termination rights for both Sphere and Cathedra, including, among others, (i) by mutual written consent of Sphere and Cathedra, (ii) by either Sphere or Cathedra if (A) the Arrangement shall not have been consummated on or prior to September 30, 2026, or (B) a final non-appealable applicable law has been effected that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins any of the parties from consummating the Arrangement, (iii) by either Sphere or Cathedra if either the Cathedra Shareholder Approval or the Sphere Shareholder Approval shall not have been obtained, (iv) by a party if the other party breaches any of its representations, warranties or covenants in the Arrangement Agreement in a manner that would cause the corresponding condition to not be satisfied, subject to certain conditions, (v) by a party if the other party materially breaches its non-solicitation covenants under the Arrangement Agreement, or (vi) by a party in order for such party to enter into a definitive agreement with respect to a superior competing business combination transaction (provided that such party has not materially breached its non-solicitation restrictions in any material respect).
If the Arrangement Agreement is terminated in certain specified circumstances, Sphere or Cathedra would be required to pay the other party a termination fee of $500,000 dollars.
Each of Sphere and Cathedra have made customary representations, warranties and covenants in the Arrangement Agreement for a transaction of this nature, in each case generally subject to customary materiality qualifiers. Among other things, each party has agreed, subject to certain exceptions, (i) to conduct its business in the ordinary course, from the date of the Arrangement Agreement until the earlier of the Effective Time and the termination of the Arrangement Agreement, and not to take certain actions prior to the Effective Time without the prior written consent of the other party, (ii) not to solicit alternative acquisition proposals and (iii) to convene the Sphere Meeting and the Cathedra Meeting, as applicable, for the purpose of obtaining the Sphere Shareholder Approval or Cathedra Shareholder Approval, as applicable, and recommend to its shareholders to approve the Sphere Resolution or the Arrangement, as applicable.
The foregoing summary of the Arrangement Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Arrangement Agreement, which is attached hereto as Exhibit 2.1 and incorporate herein by reference.
The Arrangement Agreement and the above description of the Arrangement Agreement have been included to provide investors and security holders with information regarding the terms of the Arrangement Agreement. They are not intended to provide any other factual information about Sphere, Cathedra or their respective subsidiaries. The representations, warranties and covenants contained in the Arrangement Agreement were made only for purposes of the Arrangement Agreement and as of specific dates, were solely for the benefit of the parties to the Arrangement Agreement, and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of Sphere, Cathedra or any of their respective subsidiaries. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Arrangement Agreement, which subsequent information may or may not be fully reflected in public disclosures by Sphere and Cathedra.
Voting and Support Agreements
In connection with the Arrangement Agreement, (i) each of the directors and senior officers of Cathedra (collectively, the "Cathedra Locked-Up Shareholders") and (ii) each of the directors and senior officers of Sphere (collectively, the "Sphere Locked-Up Shareholders" and together with the Cathedra Locked-Up Shareholders, the "Locked-Up Shareholders"), entered into separate voting and support agreements with Sphere and Cathedra, as applicable, (each, a "Support Agreement") whereby, among other things, each Locked-Up Shareholder has agreed, subject to the terms and conditions of the Support Agreement, to vote or cause to be voted all Cathedra Shares or Sphere Shares, as applicable, beneficially owned by such Locked-Up Shareholder in favor of the Arrangement and against any other matter that could impede, interfere with or delay Cathedra or Sphere, as applicable, from completing the Arrangement and not to option, transfer, sell, gift, pledge, hypothecate, encumber, or otherwise dispose of any such shares until completion of the Arrangement, subject to certain customary exceptions.
The Support Agreements are subject to termination in customary circumstances, including upon the termination of the Arrangement Agreement in accordance with its terms.
The foregoing description of the Support Agreements is qualified in its entirety by reference to the provided text of the form of Support Agreement, which is filed hereto as Exhibit 10.1 and incorporated herein by reference.
Amendment to Employment Agreement
On March 5, 2026, the Company entered into an amendment (the "Amendment") to the employment agreement with Kurt Kalbfleisch dated November 11, 2025 (the "Employment Agreement"). The Amendment amends certain provisions of the Employment Agreement, including the benefits available to Mr. Kalbfleisch if the Employment Agreement is terminated by the Company without Cause (as defined in the Employment Agreement) or by Mr. Kalbfleisch for Good Reason (as defined in the Employment Agreement and as amended by the Amendment). Additionally, the Amendment provides that as of the Closing, Mr. Kalbfleisch's Base Salary (as defined in the Employment Agreement) shall be reduced to $330,000 and his Target Bonus (as defined in the Employment Agreement) for 2026 and subsequent years shall be reduced to 90% of his Base Salary. The Amendment also provides (1) a cash bonus of $300,000 to Mr. Kalbfleisch if the Arrangement is consummated and Mr. Kalbfleisch remains employed with the Company at that time; and (2) provides a cash bonus of $1,095,000, subject to the performance of certain performance milestones set forth in the Amendment. To the extent the Arrangement is not consummated, the Amendment shall be deemed null and void and of no further effect.
The foregoing description of the Amendment is qualified in its entirety by reference to the provided text of the form of the Amendment, which is filed hereto as Exhibit 10.2 and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the issuance of Sphere Common Shares, Sphere Preferred Shares and Replacement Equity to Cathedra securityholders pursuant to the Arrangement Agreement is incorporated by reference herein. The securities to be issued pursuant to the Arrangement Agreement will be issued in reliance upon Section 3(a)(10) of the Securities Act of 1933, as amended (the "Securities Act"), which exempts from the registration requirements of the Securities Act any securities that are issued in exchange for one or more bona fide outstanding securities where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by any court expressly authorized by law to grant such approval.
Item 7.01 Regulation FD Disclosure.
On March 5, 2026, Sphere and Cathedra jointly issued a press release in connection with the Arrangement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information in this Item 7.01, including the corresponding Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
Exhibit
Number |
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Description of Exhibit |
| 2.1* |
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Arrangement Agreement, dated as of March 5, 2026, by and among Sphere 3D Corp., S3D Acquisition Corp. and Cathedra Bitcoin Inc. |
| 10.1 |
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Form of Support Agreement. |
| 10.2 |
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Amendment No. 1 to Employment Agreement, dated as of March 5, 2026, by and among Kurt Kalbfleisch and Sphere 3D Corp. |
| 99.1 |
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Press Release, dated March 5, 2026, jointly issued by Sphere 3D Corp. and Cathedra Bitcoin Inc. |
| 104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Certain of the schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). Sphere agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities and Exchange Commission (the "SEC") upon its request.
No Offer or Solicitation
This Current Report on Form 8-K is not intended to and does not constitute or form part of any offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the proposed transaction described herein or otherwise.
Important Additional Information
In connection with the Arrangement, Sphere and Cathedra intend to file materials with the U.S. Securities and Exchange Commission (the "SEC") and on SEDAR+, as applicable. Sphere intends to file a definitive proxy statement on Schedule 14A (the "Proxy Statement") with the SEC in connection with the solicitation of proxies to obtain Sphere Shareholder Approval, and Cathedra intends to file a notice of the Cathedra Shareholder Meeting and accompanying management information circular (the "Circular") with the TSX Venture Exchange ("TSXV") and on SEDAR+ in connection with the solicitation of proxies to obtain Cathedra Shareholder Approval of the Arrangement. After the Proxy Statement is cleared by the SEC, Sphere intends to mail a definitive Proxy Statement to the shareholders of Sphere. This communication is not a substitute for the Proxy Statement, the Circular or for any other document that Sphere or Cathedra may file with the SEC or on SEDAR+ and/or send to Sphere shareholders and/or Cathedra shareholders in connection with the Arrangement. INVESTORS AND SECURITY HOLDERS OF SPHERE AND CATHEDRA ARE URGED TO CAREFULLY AND THOROUGHLY READ THE PROXY STATEMENT AND THE CIRCULAR, RESPECTIVELY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY SPHERE AND/OR CATHEDRA WITH THE SEC OR ON SEDAR+, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SPHERE, CATHEDRA, THE ARRANGEMENT, THE RISKS RELATED THERETO AND RELATED MATTERS.
Shareholders of Sphere and shareholders of Cathedra will be able to obtain free copies of the Proxy Statement and the Circular, as each may be amended from time to time, and other relevant documents filed by Sphere and/or Cathedra with the SEC or on SEDAR+ (when they become available) through the website maintained by the SEC at www.sec.gov or on SEDAR+ at www.sedarplus.ca, as applicable. Copies of documents filed with the SEC by Sphere will be available free of charge from Sphere's website at Sphere3D.com or investor.relations@sphere3d.com. Copies of documents filed with on SEDAR+ by Cathedra will be available free of charge from Cathedra's website at cathedra.com under the "Investors" tab or by contacting Cathedra's Investor Relations Department at ir@cathedra.com.
Participants in the Solicitation
Sphere, Cathedra and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Sphere's shareholders and Cathedra's shareholders in connection with the Arrangement. Information regarding the executive officers and directors of Sphere is included in its definitive proxy statement for its 2025 annual meeting under the headings "Proposal No. 1 - Election of Directors", "Executive Officers", and "Executive Compensation", which was filed with the SEC on April 17, 2025 and is available at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1591956/000162828025018222/any-20250417.htm. Information regarding the directors and certain executive officers of Cathedra is included in its information circular and proxy statement for its 2025 annual meeting under the heading "Statement Concerning Executive Compensation", which was filed on SEDAR+ on November 4, 2025 and is available at https://cathedra.com/investors/annual-meetings/. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Proxy Statement, the Circular and other materials when they are filed with the SEC or on SEDAR+ in connection with the Arrangement. Free copies of these documents may be obtained as described in the paragraphs above.
Forward-Look Statements and Cautionary 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," "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 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. Forward-looking information includes but is not limited to information concerning: the intentions, plans and future actions of Sphere and Cathedra; the timing and anticipated completion of the Arrangement, and court and shareholder approvals for same; Sphere's and Cathedra's expectation to hold shareholder meetings to approve various items related to the Arrangement; the expected composition of the board of directors and management of Sphere after the Arrangement is completed; and timing of regulatory approvals for the Arrangement. The forward-looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described in filings with the SEC, including Sphere's reports filed on Form 10-K, Form 10-Q and Form 8-K and in other filings made by Sphere with the 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 11, 2026
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SPHERE 3D CORP. |
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By: |
/s/ Kurt Kalbfleisch |
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Kurt Kalbfleisch |
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Chief Executive Officer |
Exhibit 99.1
Sphere3D and Cathedra Bitcoin Announce Business Combination
Combined Company Expected to Retain Sphere3D's Name and US Listing (NASDAQ: ANY)
STAMFORD, CONNECTICUT, AND TORONTO, ONTARIO, March 5, 2026 - (NEWSFILE)- Sphere 3D Corp. (NASDAQ: ANY) ("Sphere"), a bitcoin mining company, and Cathedra Bitcoin Inc. (TSX-V: CBIT; OTCQB: CBTTF) ("Cathedra," and together with Sphere, the "Parties"), a company that builds, develops and operates power infrastructure facilities for use in high density computing, are pleased to announce that they have entered into a definitive agreement to combine in an all-stock transaction, which is expected to create a next-generation high density computing power infrastructure company focused on high-performance compute, digital assets, energy optimization, and development of power and infrastructure. The combined company (the "Combined Company") will bring together Sphere's established capital markets access including its Nasdaq listing, strong balance sheet, liquidity, and efficient fleet of miners with Cathedra's robust energy portfolio, proven infrastructure development expertise, bitcoin mining operations, energy-first site selection strategy, and disciplined capital allocation. The strategic combination is expected to enable near-term vertical integration, positioning the Combined Company to accelerate scalable, high-efficiency deployment across North America by leveraging a focus on low-cost power, operational efficiency, and long-term shareholder value creation. Under the terms of the definitive arrangement agreement, entered into on March 5, 2026 (the "Agreement"), Sphere has agreed to acquire all of the issued and outstanding shares of Cathedra (the "Transaction"), subject to customary closing conditions, including regulatory, court, and shareholder approvals, such that upon consummation of the Transaction, Cathedra will be a wholly-owned subsidiary of Sphere.
Upon completion of the Transaction, Cathedra security holders will receive common shares of Sphere (the "Sphere Common Shares") and/or securities exercisable or convertible into Sphere Common Shares totaling approximately 49% of all of the issued and outstanding share capital of Sphere immediately following closing on a partially diluted basis. The Combined Company is expected to retain Sphere's name and listing on NASDAQ under the symbol "ANY".
"We are thrilled to unite Cathedra with Sphere in this transformative transaction," remarked Joel Block, CEO of Cathedra and expected CEO of the Combined Company. "The Sphere team has navigated a challenging period in bitcoin mining with exceptional discipline, emerging with a strong balance sheet and a highly efficient fleet of mining machines. By combining our existing data center portfolio, development capabilities, and operational expertise with Sphere's established public market access and asset base, I believe we are creating a vertically integrated powerhouse. When I joined Cathedra, our priorities were clear: reduce debt, build more data facilities, and improve access to the public markets. This business combination addresses these objectives and allows management to focus on building a category defining company in this new space of high-density computing infrastructure in the United States. We expect that this business combination will deliver immediate scale, enhance operational efficiency, improve profitability, while accelerating our growth strategy. With an ambitious and now significantly accelerated roadmap, we plan to rapidly expand power capacity, execute disciplined development across diversified, low-cost energy sites, optimize operations, and pursue high performance computing opportunities alongside bitcoin mining. With greater scale, liquidity, and vertical integration, we believe we will be positioned to capture significant upside in the evolving digital infrastructure landscape."
"This Transaction represents an important milestone for Sphere," said Kurt Kalbfleisch, Chief Executive Officer of Sphere. "Combining our platform and strong balance sheet with Cathedra's energy assets and disciplined, energy-first operating model, we can create a uniquely powerful, vertically integrated platform. On completion of the Transaction, we expect to be exceptionally well-positioned to scale, drive operational efficiencies, seize high performance compute opportunities, and deliver compelling long-term value."
Expected Strategic Benefits:
• Improved scale and expanded US operating footprint: The Combined Company expects to initially own and operate a portfolio of 53 megawatts ("MW") of power capacity across five data centers in Iowa, Kentucky, and Tennessee.
• Platform Expansion into High-Performance Compute: With growing demand for compute-intensive workloads, the Combined Company intends to evaluate selective expansion into adjacent high-performance compute and AI infrastructure opportunities, leveraging existing power relationships and site capabilities with the goal of maximizing the value of its electrons. This expanded operating scale expects to improve profitability, spreading fixed overhead costs over a larger revenue and asset base.
• Diversified revenue streams across proprietary mining and hosting services: The integration of Sphere's mining machine fleet with Cathedra's data center operations would diversify the Combined Company's revenue streams across proprietary mining and hosting services, offering exposure to high-upside, volatile mining economics with expected downside protection via fixed-margin hosting contracts with third parties.
• Strong growth prospects through scalable development model and access to capital: With Cathedra's low-cost development model and infrastructure-first approach, coupled with Sphere's capital markets expertise and access to liquidity, the Combined Company expects to capitalize on a robust pipeline of over 100 MW of potential expansion opportunities to further expand its portfolio of infrastructure assets. In the past six months, Cathedra's new leadership team has successfully increased its power capacity by 50% online and developed a robust pipeline.
• Experienced leadership team with strategic vision: Cathedra CEO Joel Block will assume the role of CEO of the Combined Company and join the board of directors. Joel brings extensive experience in both private and public capital markets and operating in the data center and bitcoin mining arena. Sphere CEO and CFO Kurt Kalbfleisch will resign as CEO and remain in his current role as CFO and join the board of directors of the Combined Company, contributing over two decades of executive leadership experience at multiple NASDAQ-listed companies. Other key members from Sphere and Cathedra are expected to remain in key roles as the Combined Company looks to execute on a robust growth and development plan.
Upon completion of the Transaction, the Combined Company's bitcoin mining operations and balance sheet are expected to include:
• Managed power capacity of 53 MW at five data centers across three U.S. states, including data centers owned by the Combined Company and those leased from and/or operated by third parties; and
• 1.2 EH/s of installed proprietary mining hash rate across data centers owned by the Combined Company and third-party hosting providers.
Board and Management
Upon closing of the Transaction and subject to applicable approvals, the Combined Company's board of directors and management team is expected to consist of the following individuals:
| Board of Directors |
Management Team |
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▪ Tim Hanley, Chair
▪ Marcus Dent
▪ Kurt Kalbfleisch
▪ Nicholas Gates
▪ Joel Block |
▪ Joel Block, Chief Executive Officer
▪ Kurt Kalbfleisch, Chief Financial Officer
▪ Tiah Reppas, Chief Accounting Officer
|
The Combined Company will be led by a seasoned management team and supported by a strong board of directors with deep expertise in bitcoin mining, digital infrastructure, energy optimization, and capital markets. Joel Block, the current CEO of Cathedra, brings more than 20 years of executive experience in operations, sales, capital markets, and finance. Kurt Kalbfleisch, the current CEO and CFO of Sphere, has guided the company through industry volatility since 2014, first as CFO and then as CEO. The board will feature experienced independent directors: Tim Hanley, a Sphere director and veteran business executive with deep accounting expertise; Marcus Dent, a current Cathedra director and thought leader in the bitcoin industry, and Nicholas Gates, Managing Director at Priority Power Management, an Arlington, Texas-based leader in energy management, procurement, and infrastructure development. Together, Mr. Dent, Mr. Hanley, and Mr. Gates will serve as independent directors, focused on robust governance, diverse strategic perspectives, and focused execution.
Additional Transaction Details
Pursuant to the terms of the Agreement, Cathedra will amalgamate with S3D Acquisition Corp., a wholly owned subsidiary of Sphere formed to complete the Transaction. Holders of Cathedra subordinate voting shares ("Cathedra SV Shares") and multiple voting shares ("Cathedra MV Shares") will receive Sphere Common Shares based on agreed exchange ratios set out in the Agreement, which provide economically equivalent consideration for both classes of shares. Cathedra's outstanding warrants, stock options and certain restricted share units will be exchanged for corresponding Sphere securities in accordance with the applicable exchange ratio. The remaining restricted share units will fully vest immediately prior to closing, and the holders thereof will receive Sphere Common Shares in accordance with the applicable exchange ratio. In addition, certain key Cathedra shareholders will be subject to a 7% post-closing ownership cap, with any consideration that would otherwise exceed such cap to be received in a new series of Sphere non-voting preferred shares having equivalent economic value.
The Transaction will be completed by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) and will require the following approvals: (i) the approval of the British Columbia Supreme Court (the "Court"), (ii) the approval by 66⅔% of the votes cast by holders of Cathedra SV Shares and Cathedra MV Shares, voting as a single class, at a meeting of Cathedra's securityholders (the "Cathedra Meeting"), (iii) the approval by 66⅔% of the votes cast by holders of Cathedra SV Shares, Cathedra MV Shares, Cathedra warrants, Cathedra stock options and Cathedra restricted share units, voting as a single class, at the Meeting, and (iv) the approval of a simple majority of the votes cast by Sphere shareholders at a meeting of Sphere shareholders (the "Sphere Meeting", and together with the Cathedra Meeting, the "Meetings").
An information circular or proxy statement (each, a "Disclosure Document") detailing the terms and conditions of the Transaction will be mailed to the Cathedra shareholders and Sphere shareholders, respectively, in connection with their respective Meetings. All shareholders are urged to read the applicable Disclosure Document once available, as it will contain important additional information concerning the Transaction.
The Agreement includes standard deal protection provisions, including non-solicitation, right-to-match, and fiduciary out provisions, as well as certain representations, covenants and conditions that are customary for a transaction of this nature, along with a reciprocal termination fee payable in certain circumstances. The completion of the Transaction remains subject to customary conditions, including receipt of all necessary Court, shareholder and regulatory approvals.
None of the securities to be issued pursuant to the Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and securities issued in the Transaction are anticipated to be issued in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof and will be issued pursuant to similar exemptions from applicable state securities laws. This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
Board Recommendations & Voting Support
Each of the board of directors of Cathedra and Sphere have unanimously approved the Transaction and each board of directors recommends that its respective shareholders vote in favor of the Transaction at the applicable Meeting.
Directors and officers of Cathedra beneficially owning an aggregate number of Cathedra SV Shares and Cathedra MV Shares which represent approximately 70% of the currently outstanding Cathedra SV Shares and Cathedra MV Shares combined (on a fully converted basis) have entered into customary support agreements with Sphere to vote their shares in favor of the Transaction at the Cathedra Meeting. Directors and officers of Sphere holding an aggregate number of Sphere Common Shares which represent approximately 3% of the currently outstanding Sphere Common Shares have entered into customary support agreements with Cathedra to vote their shares in favor of the Transaction at the Sphere Meeting.
Stock Exchange Listing and SEDAR+
If the Transaction is completed, the Cathedra SV Shares will be delisted from the TSXV and the OTCQB and the Sphere Shares are expected to continue trading on NASDAQ under the ticker "ANY". A copy of the Agreement will be available through Cathedra's and Sphere's filings with the applicable securities regulatory authorities on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov, respectively.
Advisors and Counsel
Dumoulin Black LLP is acting as Canadian legal counsel to Cathedra and Greenberg Traurig, LLP is acting as U.S. legal counsel to Cathedra. Evans & Evans, Inc. was the fairness opinion provider to Cathedra on this transaction.
Second Gate Advisory LLC is acting as strategic advisor to Sphere, Meretsky Law Firm is acting as Canadian legal counsel to Sphere and Pryor Cashman LLP is acting as U.S. legal counsel to Sphere. Rosenblatt Securities was the fairness opinion provider to Sphere 3D on this transaction.
About Cathedra Bitcoin Inc.
Cathedra Bitcoin Inc. develops and operates digital infrastructure assets across North America. Cathedra hosts bitcoin mining clients across its portfolio of four data centers (45 megawatts total) in Tennessee and Kentucky. Cathedra also operates a fleet of proprietary bitcoin mining machines at its own and third-party data centers, producing approximately 400 PH/s of hash rate. Cathedra is headquartered in Vancouver and its shares trade on the TSX Venture Exchange under the symbol CBIT and in the OTC market under the symbol CBTTF. For more information about Cathedra, visit cathedra.com.
About Sphere 3D Corp.
Sphere 3D Corp. (NASDAQ: ANY) is a Bitcoin miner, growing its digital asset mining operation through the capital-efficient procurement of next-generation mining equipment and partnering with data center operators. Sphere 3D is dedicated to increasing shareholder value. For more information about Sphere 3D, please visit Sphere3D.com.
For further information, please contact:
Joel Block, CEO, Cathedra Bitcoin
ir@cathedra.com
Kurt Kalbfleisch, CEO, Sphere 3D
Investor.relations@sphere3d.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements Disclaimer
This news release contains certain "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities laws that are based on expectations, estimates and projections as at the date of this news release. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the U.S. Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. The information in this release about future plans and objectives of Cathedra and Sphere, are forward-looking information. Other forward-looking information includes, but is not limited to, information concerning: the intentions and future actions of senior management, the intentions, plans and future actions of the Cathedra and Sphere, as well as their ability to successfully mine digital currency; the timing and anticipated completion of the Transaction, and court and shareholder approvals for same; Cathedra's and Sphere's expectation to hold shareholder meetings to approve various items related to the Transaction; revenue and capacity projections of the Combined Company; the expected composition of the board of directors and management of the Combined Company; timing of regulatory approvals for the Transaction; the expected benefits from the Transaction; the combination of Cathedra's business and Sphere's business; the impact that the Transaction is expected to have on the business operations of the Combined Company including without limitation, the expected growth and capabilities of the Combined Company; the expected improved profitability and increased liquidity of the Combined Company, the expectation of synergies and efficiencies among the Combined Company, the construction and operation of expanded blockchain infrastructure as currently planned, the creation of long-term value for the shareholders of the Combined Company, the potential to accelerate growth; planned growth, vertical integration and expansion into high-performance compute and AI infrastructure; projected reductions in power costs; the anticipated assets, operations and balance sheet of the combined company following closing; expected operational, cost and procurement synergies; the delisting of Cathedra shares and continued NASDAQ listing of Sphere shares; the preparation, filing and mailing of disclosure documents in connection with the Transaction; and the regulatory environment of cryptocurrency in applicable jurisdictions. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "targets", "estimates", "believes", "contemplates", "predicts", "potential", "continue" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "should", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify forward-looking information.
This forward-looking information is based on reasonable assumptions and estimates of management of the parties at the time it was made, including, without limitation, assumptions that the parties will be able to obtain the requisite regulatory, court, shareholder and third party approvals and satisfy the other conditions to the consummation of the Transaction on the proposed schedule and terms and conditions set out in the Agreement; that the Agreement will not be terminated prior to the closing the Transaction; that the Transaction will be completed in accordance with the terms and conditions of the Agreement and within the timeframe expected; that no material adverse changes will occur in the businesses, operations or financial condition of either party prior to closing; that no unanticipated events will occur that will delay or prevent the completion of the Transaction; the ability of the Combined Company to successfully integrate the businesses and realize anticipated synergies, cost savings and operational efficiencies; the accuracy of projected power costs, energy availability and hosting arrangements; the continued availability of low-cost and reliable power; the performance and deployment of mining equipment and infrastructure; the availability of growth capital on acceptable terms; the ability to execute expansion plans on schedule and within budget; market conditions for bitcoin mining and high-performance computing infrastructure; the price of bitcoin and other digital assets; network difficulty and hash rate conditions; regulatory and tax stability in applicable jurisdictions; general economic, financial and capital markets conditions; and that the parties will have access to the financial and other resources required to carry out their business plans as currently anticipated. The parties have also assumed that no significant events occur outside of their normal courses of business.
Additionally, these forward-looking statements may be affected by risks and uncertainties in the business of Cathedra and Sphere and general market conditions. Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect Cathedra and Sphere's respective management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Cathedra and Sphere believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Combined Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the ability to consummate the Transaction; the ability to obtain requisite regulatory, court, shareholder and third party approvals, the satisfaction of other conditions to the consummation of the Transaction on the proposed schedule, or at all and on the terms and conditions set out in the Agreement; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, employees, customers and competitors; the anticipated timing of mailing Disclosure Documents regarding the Transaction; the risk that the either Sphere or Cathedra may terminate the Agreement and either Sphere or Cathedra is required to pay a termination fee to the other party; the ultimate timing, outcome and results of integrating the operations of Sphere and Cathedra; the ultimate timing, outcome and results of integrating the operations of Sphere and Cathedra; the effects of the business combination of Sphere and Cathedra, including the Combined Company's future financial condition, results of operations, strategy and plans; the ability of the Combined Company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the Combined Company to finance operations in the manner expected; the risk of any litigation relating to the proposed Transaction; the risk of changes in governmental regulations or enforcement practices; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation and the costs associated with compliance; unanticipated costs; the risks and uncertainties associated with foreign markets; the diversion of management time on the Transaction; the volatility of bitcoin prices and other digital asset markets; changes in network difficulty, hash rate or mining economics; the availability, cost and reliability of power and energy infrastructure; the ability to secure additional power capacity or execute expansion projects on time and within budget; delays in delivery, installation or performance of mining equipment or other critical infrastructure; cybersecurity threats, technology failures or data center outages; counterparty risks relating to hosting clients, equipment suppliers or power providers; the availability and retention of key personnel; the ability to access debt or equity financing on acceptable terms; and risks related to competition in the bitcoin mining and high-performance computing industries. Additionally, the forward-looking statements contained herein may be affected by risks and uncertainties in the business of Cathedra and Sphere and general market conditions.
Additional factors that could cause results to differ materially from those described above can be found in Sphere's reports filed on Form 10-K, Form 10-Q and Form 8-K and in other filings made by Sphere with the SEC from time to time and available at www.sec.gov and available on Sphere's website at www. sphere3d.gcs-web.com under the "Financials" tab, and in Cathedra's management information circular dated October 30, 2025 available under the Cathedra's issuer profile on SEDAR+ at www.sedarplus.ca and in other documents Cathedra files on SEDAR+.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Cathedra nor Sphere assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by applicable securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Cathedra and Sphere have attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. Readers should not place undue reliance on forward-looking information.
FINANCIAL INFORMATION
This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about prospective results of operations, future net revenue, share capital, cash flows, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this news release was made as of the date of this news release and was provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that the forward-looking statements and FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. The forward-looking statements and FOFI contained in this news release are expressly qualified by this cautionary statement. Certain information contained herein is based on, or derived from, information provided by independent third-party sources. Cathedra and Sphere believe that such information is accurate and that the sources from which it has been obtained are reliable. Cathedra and Sphere cannot guarantee the accuracy of such information, however, and have not independently verified the assumptions on which such information is based. Cathedra and Sphere do not assume any responsibility for the accuracy or completeness of such information. Cathedra and Sphere do not intend, and do not assume any obligation, to update the forward-looking statements or FOFI contained in this news release except as otherwise required by applicable law.
This press release contains certain non-GAAP and non-IFRS financial measures, which management believes may enable investors to better evaluate Cathedra's and Sphere's performance, liquidity and ability to generate cash flow. These measures do not have any standardized definition under U.S. GAAP or IFRS, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP or IFRS, as applicable. Other companies may calculate these measures differently.
