U.S-listed bitcoin mining firm Sphere 3D is becoming a shareholder of Core Scientific after settling its claims in Core’s Chapter 11 bankruptcy proceeding.
Sphere 3D said on Tuesday that it reached an agreement with Core for $10 million worth of equity that will be available for trading once Core relists on the Nasdaq, which is expected to be Wednesday. Core recently received the bankruptcy court’s approval on its reorganization plan to resume trading in the U.S.
Sphere 3D added that settlement gives its access to additional equity if Core’s share price decreases in the 18 months after the settlement agreement date.
As reported earlier, Sphere 3D was involved in a dispute with Core Scientific due to a colocation partnership that soured between Core Scientific and Gryphon Digital Mining. The settlement would allow the parties to avoid lengthy and complex litigation.
According to Core’s previous filings, Gryphon Digital Mining signed a hosting agreement in 2021 to colocate nearly 7 EH/s of hashrate at Core’s facilities. In the meantime, Gryphon also began a reverse merger deal with Sphere 3D to go public in the U.S.
But the promised 7 EH/s of hashrate was said to have not arrived in Core Scientific’s facility despite Gryphon having prepaid $34 million in hosting fees. Moreover, Sphere 3D announced in February 2022 to purchase 6 EH/s of the NuMiner equipment only to find out it was a dubious scheme.
After Core filed for Chapter 11 reorganization, Sphere 3D submitted proof-of-claims for more than $34 million.