Company: ANY
Filing Date: 2025-01-03
Form Type: 424B5
Source: 0001062993-25-000228
Chunk: 29

Company: Sphere 3D Corp.
Filing Date: 2025-01-03
Form: 424B5
Chunk 29
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 any power purchase agreements for the supply of power.

Mining Pools

A "mining pool" is a service operated by a mining pool operator that pools the resources of individual miners to share their processing power over a network. Mining pools emerged in response to the growing difficulty and network hash rate competing for Bitcoin rewards on the Bitcoin blockchain as a way of lowering costs and reducing the risk of an individual miner's mining activities. Mining pool operators provide a service that coordinates the hash calculation services of the independent mining enterprises participating in the mining pool. Mining pools are subject to various risks such as disruption and down time. In the event that a pool we utilize experiences down time or is not yielding returns, our results may be impacted.

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We currently have service agreements (the "Service Agreements" and each, a "Service Agreement") with Foundry Digital LLC ("Foundry") and Luxor Technology Corporation ("Luxor" and, together with Foundry, the "Operators" and each, an "Operator"), each a cryptocurrency mining pool operator, to provide a service to perform hash calculations. In exchange for providing the service, we are entitled to Full Pay Per Share ("FPPS"), which is a fractional share of the fixed Bitcoin award the applicable Operator receives, plus a fractional share of the transaction fees attached to that blockchain, less net cryptocurrency fees due to the Operators over the measurement period, as applicable. The pay-outs that we receive are based on the expected value from the block reward plus the transaction fee reward, regardless of whether the applicable Operator successfully records a block to the blockchain.

Our fractional share is based on a contractual formula, which primarily calculates the hash rate provided to the mining pool as a percentage of total network hash rate and other inputs. The Service Agreements are terminable at any time by either party without compensation, and our enforceable right to compensation only begins when we begin providing hash calculation services to the applicable Operator (which occurs daily at midnight Universal Time Coordinated ("UTC time")). The Service Agreements are terminable at any time by either party without compensation, and our enforceable right to compensation only begins when we begin providing hash calculation services to the Operator, which occurs daily at midnight UTC time.

Master Services Agreement

On August 19, 2021, we entered into a Master Services Agreement (the "Gryphon MSA") with Gryphon Digital Mining, Inc. ("Gryphon") under which Gryphon agreed to be the exclusive provider of any and all management services for all