Sphere 3D Prepares to Dilute Shareholders by 50% Amid Cash Crunch

Sphere 3D, a Bitcoin miner, is facing a severe cash crunch and has quietly prepared to dilute its shareholders by 50% through a stock sale. The company's amended at-the-market (ATM) prospectus allows for up to $10.3 million in stock sales for working capital. If the full capacity is used, it would add approximately 4.38 million new shares, expanding the basic share count by 50.9%. This move would lift the basic shares outstanding from 8.62 million to 13 million.

The amended facility replaced Sphere 3D's prior ATM prospectus and is not a completed issuance. The number of shares issued will depend on actual market prices, and A.G.P. and Maxim are not required to sell a minimum amount. If the full assumed offering is sold, Sphere 3D estimates approximately $9.9 million in net proceeds after a 3% sales-agent commission and estimated offering expenses.

The company's prior program shows that the equity channel has already been used: a companion Form 8-K says Sphere 3D sold 2.17 million shares under the superseded prospectus for $5.13 million of gross proceeds through July 30. However, these sales do not represent use of the amended facility.