• Upon full deployment, Sphere 3D will be one of the largest carbon neutral bitcoin miners in the world.
• Sphere 3D enters into an agreement to acquire 60,000 next-generation NuMiner bitcoin miners operating at 440 TH/s for a total capacity of 26.4 EH/s.
• Sphere 3D previously contracted to purchase 60,000 ANTMINER S19j Pro miners totaling 6.0 EH/s for delivery in calendar year 2022.
• Total consideration for NuMiner machines includes ~$400 million of Sphere 3D capital stock, $29 million in cash, a Sphere 3D option to utilize up to $1.1 billion in vendor purchase financing and up to $185 million of additional milestone payments as discussed below, for a total of up to $1.7 billion for 26.4 EH/s.

Sphere 3D Corp. (Nasdaq: ANY) (“Sphere 3D” or the “Company”), dedicated to becoming the leading carbon neutral bitcoin mining company operating at enterprise scale, has entered into an agreement to purchase 60,000 units of new NM440 bitcoin miners from NuMiner Global, Inc. (“NuMiner”), the exclusive distributor for all NuMiner Technologies Inc. products. The NM440 was introduced to the market for the first time today and features a hash rate of 440 TH/s and a power efficiency ratio of 20.2 J/T.

“The reduction in energy consumption per TH/s further exemplifies our shared commitment to ESG leadership in the industry.”

Based on current delivery schedules, the Company will receive 12 pre-production NM440s for final evaluation and testing to completed on or before June 1, 2022. Upon the successful completion of the final evaluation and testing, deployment will consist of 1,000 miners in June 2022 and approximately 10,000 NM440’s per month from September 2022 to February 2023. Under the terms of the agreement, the Company is also granted an option to acquire an additional 26.4 EH/s of production at the same commercial terms as well as the exclusive right of first refusal on all future NuMiner products and software enhancements.

The purchase terms for the 60,000 NM440s amount to a maximum purchase price of $1.7 billion including:

• $429 million in down payments, including approximately $400 million in common and preferred stock, subject to regulatory approval, and $29 million in cash;
• $1.1 billion in vendor financing from NuMiner at the option of Sphere 3D and subject to execution of additional definitive documentation; and
• Additional milestone payments of approximately $185 million based on a sliding scale contingent on the reduction of J/T delivered NM440s below the current 20.2 J/T.

As part of the transaction, Anthony Melman, Chair of the NuMiner Global Board of Directors, will be appointed to the Sphere 3D Board of Directors, which is anticipated to be effective in March 2022.

“Sphere 3D is proud to be NuMiner’s launch partner. We continue to focus on the growth of our mining operations, and the agreement to purchase the NM440 provides us the ability to increase our EH/s capacity on order by 440% over the next 13 months. The NM440 should also increase our overall efficiency, further improving margins and profitability as we scale our mining operations,” said Peter Tassiopoulos, Chief Executive Officer of Sphere 3D. “The reduction in energy consumption per TH/s further exemplifies our shared commitment to ESG leadership in the industry.”

Mr. Tassiopoulos added, “I look forward to welcoming Tony Melman to the Board of Sphere 3D. Tony has extensive experience in the technology sector, M&A and governance, and will be a welcome addition.”

This purchase puts Sphere 3D on pace to be one of the largest carbon neutral bitcoin miners. The Company’s contracted deliveries represent a total hashrate of 32.4 EH/s if fully deployed today, which would be equivalent to approximately 14% of the current global network hashrate¹. The Company’s mining assets are expected to include 120,000 miners comprising 60,000 NM440s, projected to represent 26.4 EH/s, and 60,000 ANTMINER S19j Pros. Gryphon Digital Mining, Inc., Sphere 3D’s proposed merger partner, currently has 3,000 machines in operation and an additional 500 machines that Gryphon has now deployed on behalf of Sphere 3D, as well as another 500 expected to be operational by the end of the month.

Iain Kennedy, Chief Executive Officer of NuMiner Global, said, “Our agreement with Sphere 3D provides an enterprise scale deployment path for our next generation bitcoin miners. By significantly reducing the cost and energy consumption of bitcoin mining, we are accelerating an industry shift toward renewable and sustainable energy. In addition, this agreement allows Sphere 3D to quickly expand their hashrate and become one of the largest bitcoin miners in the global bitcoin mining industry.”

Rob Chang, CEO of Gryphon Digital Mining, said, “We are looking forward to joining the Sphere team and partnering with NuMiner with its cutting-edge technology in the NM440. This collaboration will continue our competitive advantage of focusing our operations on the most efficient miners available in the market. Gryphon Digital Mining, as one of the first signatories of the Crypto Climate Accord, supports NuMiner’s focus on prioritizing customers that are carbon neutral.”