Sphere 3D (ANY.NASDAQ) announced today that it has entered into an agreement with Herford Advisors, a privately-held company that provides turnkey mining solutions, to provide a six month exclusive right to assume all of Herford’s rights to a number of bitcoin mining agreements.
“This is a significant milestone for Sphere 3D as we look to the future…We are pleased to have the opportunity to place Sphere 3D as a leader in the space with state of the art miners, in a very competitive market where time to delivery is paramount,” says Peter Tassiopoulos, Sphere 3D’s CEO.
I’ll be blunt, I don’t know the first thing about bitcoin mining, but I would like to think that amateur bitcoin miners aren’t too different from regular miners. In both scenarios, I imagine there’s always a sweaty dude who hasn’t seen the light of day in weeks, mining away to turn a profit. The only difference being, one lives in his mom’s basement singlehandedly causing the silicon shortage, while the other works tirelessly out in the field mining for ores. However, bitcoin has taken the world by storm, resulting in the formation of companies dedicated to mining the lucrative cryptocurrency. Hell, with a price tag of over CAD$50,000, I would build my own bitcoin miner if I could, but sometimes its better to invest in the businesses that will do the work for you like Sphere 3D.
According to the Sphere 3D’s latest agreement with Hertford, the Company will obtain the rights to secure up to 220,000 miners on pre-negotiated terms and a lease for a 200,000 square foot carbon neutral facility for bitcoin mining. Furthermore, the Company has executed the first bitcoin mining agreement associated with Hertford for the purchase of up to 60,000 new bitcoin mining machines, with deliveries to commence in November 2021. These deliveries are expected to roll out over the course of the next ten months and, upon completion, this will give Sphere 3D 5.7 Exahash of computing power. To put things into perspective, one exahash per second is equivalent to one quintillion hashes per second and a higher hash rate means faster bitcoin mining capabilities.
“We continue to look for ways to increase shareholder value while remaining true to our commitment to ESG principles. We believe that this series of transactions could have significant revenue and cost synergies across our value chain,” continued Peter Tassiopoulos.
According to the terms of the agreement, Sphere 3D will issue common shares to Hertford, as well as shares of a new series of preferred stock in the Company, based upon the completion of certain milestones. These milestones include the assumption of two additional contracts, including the purchase of up to 160,000 additional miners and the right to complete negotiations to secure a long-term contract for a 200,000 square foot crypto mining facility. If all contracts are executed, Sphere 3D will have 21.5 Exahash of computing power. Following the assignment of these contracts, Sphere 3D will issue an aggregate of 4,500,000 common shares to Hertford.
Sphere 3D’s share price opened at $5.35, up from a previous close of $3.44. The Company’s shares are up 33% and are currently trading at $4.61 as of 10:32 AM ET.