Sphere 3D Corp. priced a $5.0 million private placement and divested non-core assets after a 90-day strategic review to fund AI and high-performance computing development.
Sphere 3D Corp., doing business as DarkHorse Technologies ANY (“Sphere 3D” or the “Company”), today announced the pricing of a $5.0 million private placement financing and the initial conclusions of a 90-day strategic review conducted by management and the Board of Directors following the company’s June 2026 business combination. The private placement will feature meaningful participation from company insiders, including three directors. Concurrently, the company announced plans to divest its non-core Iowa site and legacy mining fleet to fund artificial intelligence (AI) and high-performance computing (HPC) development across the Tennessee Valley Authority (TVA) region. Through a wholly owned subsidiary, Sphere 3D has secured a land option in Hopkinsville, Kentucky, for a proposed 50-megawatt (MW) data center supported by a new 65-MW substation, pending zoning and regulatory approvals.
The private placement is expected to close around September 11, 2026, subject to customary conditions. Pursuant to the securities purchase agreement, the company will issue and sell 1,666,661 units at $3.00 per unit. Each unit comprises one common share and one five-year warrant exercisable at $3.50 per share. These prices reflect premiums of 29% and 51%, respectively, over the company’s closing price on September 4, 2026. All securities issued will carry a six-month contractual lock-up period. Three directors, including Chairman Timothy Hanley and CEO Joel Block, have subscribed to the offering (collectively, the “Participating Insiders”). Net proceeds will support general corporate purposes, including AI and HPC infrastructure development in the TVA region.
Sphere 3D has secured an option to acquire approximately 20 acres in Hopkinsville, Kentucky, for a proposed data center drawing roughly 50 MW. The project will be supported by a new 65-MW substation, which the company has offered to fund at an estimated cost of $8 million to $10 million. An additional 15 MW of capacity will be allocated to other Hopkinsville Electric System (HES) customers. HES has confirmed that the TVA can supply this capacity without impacting service to its approximately 13,000 existing customers. The proposal remains pending regulatory approvals, which may influence the project’s feasibility, timeline, or scope. Separately, the company is evaluating the conversion of its existing Hopkinsville facility—currently contracted to draw approximately 15 MW at HES’s Holland Substation—to AI and HPC operations.
Management and the Board concluded that the Iowa site is non-core, entering into a definitive agreement to sell it for $1.5 million. Combined with an anticipated $500,000 recovery in utility deposits and prepayments, total proceeds from the sale will reach approximately $2 million. The company has also agreed to sell its legacy fleet of approximately 5,500 proprietary mining machines for approximately $3 million. Proceeds from these divestitures, alongside the private placement, will fund AI and HPC infrastructure development across the company’s Tennessee and Kentucky facilities. Post-sale, Sphere 3D will own or operate approximately 50 MW of energized capacity across four sites in Tennessee and Kentucky, including an additional 5 MW under contract in Hopkinsville. This figure excludes the proposed new Hopkinsville data center and other pipeline projects.
With Bitdeer Technologies Group (BTDR) now supplying and owning hardware for 20 MW of the 30 MW contracted under the company’s joint mining agreements—and a third site expected online before November 2026—the company’s Bitcoin mining exposure is now structured primarily through revenue-share hosting arrangements. Sphere 3D retains control over power and site infrastructure, while termination clauses in these agreements preserve the company’s ability to redeploy capacity to AI and HPC workloads.
The strategic review yielded a focus on developing AI and HPC facilities at smaller, distribution-connected sites often overlooked by larger developers. Key priorities include accelerating deployment timelines, fostering partnerships with host communities and utilities, and investing in local technical education and workforce training. The proposed Hopkinsville data center marks the first initiative under this strategy. Sphere 3D will concentrate development efforts within the TVA region, leveraging its established operational footprint, utility relationships, and government and economic development partnerships.
“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 combined 333,332 units, generating aggregate gross proceeds of approximately $1.0 million. Issuances to these insiders qualify as “related party transactions” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The company is exempt from MI 61-101’s formal valuation and minority shareholder approval requirements under sections 5.5(a) and 5.7(1)(a), respectively, as the fair market value of these related-party transactions does not exceed 25% of the company’s market capitalization.
The securities are being offered pursuant to the registration exemption under Section 4(a)(2) of the Securities Act of 1933, as amended, and applicable prospectus exemptions under Canadian securities laws. They have not been registered under U.S. federal or state securities laws and may not be offered or sold in the United States without registration or an applicable exemption. The securities may also be subject to hold periods and resale restrictions under Canadian securities regulations.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor will any sale occur in jurisdictions where such offers or sales would be unlawful.
About Sphere 3D Corp.
Sphere 3D Corp. 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 or operates approximately 50 MW of operating power capacity across four data center locations in Tennessee and Kentucky. It also has a proposed new 50 MW data center in Hopkinsville, Kentucky, together with a development pipeline exce