Sphere 3D Prepares to Dilute Shareholders by Up to 50.9%

Sphere 3D, a Bitcoin miner, is facing a severe cash crunch and has quietly prepared to dilute its shareholders by up to 50.9%. According to an amended ATM (at-the-market) prospectus filed with the SEC on July 31, the company has authorization to sell up to $10.3 million worth of stock for working capital.

The assumed price for this sale is $2.35 per share, which would add approximately 4.38 million new shares to the company's basic share count. This represents a significant expansion, with the existing 8.62 million basic shares outstanding increasing by nearly half.

Sphere 3D and its subsidiary Cathedra have been facing liquidity pressure, as evidenced by their audits in 2025 and March 31, respectively. The company has also had to rely on selling mined Bitcoin for working capital or growth, with management stating this policy option in their July prospectus.

The amended ATM facility allows A.G.P. and Maxim to sell shares without a minimum requirement, with the number of shares issued dependent on actual market prices. If the full assumed offering is sold, Sphere 3D estimates approximately $9.9 million in net proceeds after commission and estimated expenses.