Sphere 3D (ANY) Reaches Settlement with Core Scientific

Sphere 3D Corp. (NASDAQ: ANY) has reached a settlement agreement (the "Settlement Agreement") with Core Scientific, Inc. (together with its affiliates, "Core") which was approved by United States Bankruptcy Judge Christopher M. Lopez on January 16, 2024 as part of Core's emergence from bankruptcy. Pursuant to the Settlement Agreement:

• Sphere 3D will receive $10,000,000 in equity of Core;
• Sphere 3D will receive access to a pool of additional equity, if the value of the equity decreases from plan value; and
• Sphere 3Dand Core have mutually released claims against each other, but have expressly preserved Sphere 3D's claims against Gryphon Digital Mining, Inc. ("Gryphon").

Sphere 3D reached an agreement with Core for $10,000,000 of equity which will be available for trading upon Core's Effective date. The Settlement Agreement includes access to potential additional funds for interest as well as an additional equity pool if the value of Core's equity decreases in the 18 months after the date of the Settlement Agreement commensurate with the other unsecured creditors.

Sphere 3D believes the settlement was in the best interests of its shareholders given the uncertainty of litigation. Consistent with Sphere 3D's view, Judge Lopez acknowledged in approving the settlement that the case was complex and would have required extensive deliberations to resolve. Judge Lopez acknowledged the efforts that Sphere 3D and Core had put into the settlement negotiations.

The terms of the Settlement Agreement expressly do not waive any claim Sphere has against Gryphon. Sphere 3D is seeking recovery from Gryphon for damages in connection with Gryphon's failure to file a timely proof of claim before the deadline in the Core bankruptcy proceeding before the filing deadline. Core previously contested Sphere 3D's proof of claim arguing that Gryphon's failure to file the proof of claim before the passage of the bar date deadline invalidated the claim.

CEO Comments

"The settlement of this case provides us with non-dilutive capital to grow and focus all efforts on our strategic growth initiatives," said Patricia Trompeter, CEO of Sphere 3D. "We are glad that the Settlement Agreement will enable us to recover capital."

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