DarkHorse Technologies Inc

What they do

Sphere 3D began Bitcoin mining operations in January 2022 and sold its legacy containerization, virtualization and data management products business in December 2023. Following the Cathedra combination, the company owns and operates the power and data center infrastructure underlying a substantial portion of its mining fleet rather than relying on third-party hosting. It reports approximately 53 MW of operating power capacity across five data centers, plus a 30 MW co-mining arrangement with Bitdeer across three sites in Tennessee and Kentucky, and generates revenue from proprietary Bitcoin mining and, since June 1, 2026, from hosting services to third parties.

Revenue drivers

• Proprietary Bitcoin mining — Historically the company's entire revenue source; it mines Bitcoin with its own fleet and earns block rewards (currently 3.125 BTC per block) plus transaction fees, and the 10-K states all revenue was generated from Bitcoin mining.
• Hosting services — Revenue from hosting third parties began June 1, 2026 following the Cathedra combination, and management says this is intended to provide more predictable revenue to complement the variability of proprietary mining.
• 30 MW co-mining arrangement with Bitdeer — Co-mining agreements covering 30 MW across three sites in Tennessee and Kentucky, described as putting capacity to work with an established counterparty while the company evaluates AI and high-performance computing uses.
• Potential HPC/AI infrastructure — No commercial agreement yet; management says it is evaluating sites site-by-site for high-performance computing and AI workloads and speaking with prospective off-takers and co-tenants.

Recent performance

Annual revenue fell from $21.9M in 2023 to $16.6M in 2024 and $11.2M in 2025, with a 2025 net loss of $21.5M and operating cash flow of negative $16.1M. Quarterly revenue was $1.9M in Q1 2026 and $2.5M in Q2 2026, versus $2.6M in Q3 2025 and $2.7M in Q4 2025. At June 30, 2026, the company reported total assets of $24.9M, total liabilities of $8.0M, shareholder equity of $16.9M and cash and equivalents of $2.8M. Management said the second quarter results largely reflect the legacy businesses and include transaction-related expenses and impairment charges.

Strategy

The company's stated strategy is converting its energized power position into higher-value HPC and AI infrastructure, with CEO Joel Block saying a megawatt serving AI and high-performance compute can earn a multiple substantially ahead of a megawatt in digital asset mining. It plans a modular development model, using prefabricated components manufactured offsite and assembled locally, targeting smaller GPU clusters sized for inference workloads. It is advancing conversion planning at Hopkinsville and evaluating incremental capacity in the Tennessee Valley Authority region, and it has installed a new management team and refreshed board while pursuing a new name subject to shareholder approval.

Risks

• Bitcoin price and transaction volume dependence — The 10-K states the company generated all of its revenue from Bitcoin mining, so declines in the price of Bitcoin, transaction volumes, or market liquidity would directly reduce revenue.
• AI/HPC conversion not yet contracted — The HPC and AI strategy remains at the evaluation stage, and management stated it does not yet have a new commercial agreement to announce.
• History of losses and cash burn — The company reported net losses in each of 2021 through 2025, including $21.5M in 2025, and operating cash flow of negative $16.1M in 2025, with $2.8M of cash at June 30, 2026.
• Nasdaq listing and dilution risk — The 10-Q cites the inability to maintain Nasdaq listing among its risk factors, and the company effected a 1-for-10 reverse stock split in February 2026 and has issued equity in connection with recent agreements.

Outlook

Management describes the period as transitional, saying the reported results largely reflect the legacy businesses rather than the company being built. It points to the Cathedra combination, the 30 MW Bitdeer co-mining agreements, Hopkinsville conversion planning, and a development pipeline exceeding 100 MW of potential expansion as the base for the HPC/AI strategy. The company says it is evaluating additional land, buildings, substation capacity and site conversions and is speaking with prospective off-takers and co-tenants, but has no new commercial agreement to announce.