$ANY Cathedra Bitcoin Inc. Provides Additional Disclosure Regarding the Series I Preferred Shares Issuable in Connection with Its Plan of Arrangement with Sphere 3D Corp.
https://www.newsfilecorp.com/release/295921
Vancouver, British Columbia--(Newsfile Corp. - May 4, 2026) - Cathedra Bitcoin Inc. (TSXV: CBIT) ("Cathedra" or the "Company"
is providing the following additional disclosure regarding the Series I preferred shares (the "Series I Preferred Shares" issuable in connection with its plan of arrangement (the "Transaction" with Sphere 3D Corp. ("Sphere" previously announced on March 5, 2026.
This press release provides additional information to Cathedra shareholders regarding the process undertaken by the board of directors of Cathedra (the "Board" in reviewing and approving the consideration structure under the Transaction and provides additional context relating to the issuance of Series I Preferred Shares to certain shareholders.
Background and Rationale for Structure
As disclosed in the Company's management information circular dated April 2, 2026 (the "Circular" , the requirement to issue Series I Preferred Share consideration to those Cathedra shareholders who would otherwise receive in excess of 7% of the shares of Sphere post-closing ("Sphere Common Shares" , was a requirement of Sphere to address shareholder concentration concerns.
In evaluating the consideration structure, including the Series I Preferred Shares, the Board undertook a detailed review process, which included:
consideration of the commercial rationale for the ownership cap and its importance to the overall viability of the Transaction;
review of the terms and conditions of the Series I Preferred Shares, including their economic and governance characteristics;
consideration of the longer-term economic implications of receiving Series I Preferred Shares relative to Sphere Common Shares;
discussions with legal and financial advisors, including in connection with a fairness opinion obtained in respect of the Transaction; and
evaluation of whether the structure resulted in any preferential or enhanced consideration to affected shareholders.
Key Features of the Series I Preferred Shares
In its deliberations, the Board focused on several key features of the Series I Preferred Shares that distinguish them from Sphere Common Shares:
Non-voting: The Series I Preferred Shares do not carry voting rights (other than limited class protections), whereas Sphere Common Shares are fully voting. This structure is designed to prevent new shareholders from acquiring disproportionate voting power immediately upon closing of the Transaction, thereby preserving an appropriate balance of governance control among the post-closing shareholder base.
Restricted liquidity and staged conversion: The Series I Preferred Shares are subject to staged conversion over three years (33⅓%, 66⅔%, 100%), resulting in delayed liquidity compared to immediately tradable Sphere Common Shares. This graduated conversion schedule is intended to promote orderly trading and price stability in the Sphere Common Shares by preventing a sudden influx of tradable shares that could create downward pressure on share price and market volatility.
Structural limitations: The Series I Preferred Shares are subject to limitations on conversion into Sphere Common Shares to ensure compliance with the rules of the Nasdaq Stock Market. In particular, absent shareholder approval, a holder of the Series I Preferred Shares may be precluded from converting such preferred shares into Sphere Common Shares if it would result in such holder exceeding certain maximum ownership thresholds under applicable Nasdaq rules. These limitations may delay or restrict a holder's ability to fully convert their Series I Preferred Shares into freely tradable Sphere Common Shares.
Dividend: The Series I Preferred Shares carry an 8% annual dividend, payable in additional Series I Preferred Shares (a "PIK dividend" . In determining the fairness of this PIK dividend, the Board took into account that it does not provide current cash yield or liquidity and is payable in securities that are themselves subject to the same restrictions and staged conversion. The PIK dividend was included as a balancing mechanism to partially offset the economic disadvantages associated with the loss of voting rights and delayed liquidity. Importantly, the Board also considered that the dividend is not guaranteed. In particular, certain change of control or similar transactions may result in holders of Series I Preferred Shares foregoing the 8% dividend entirely. In such circumstances, the Series I Preferred Shares are treated in the same manner as Sphere Common Shares, and holders would not receive accrued or future PIK dividends.
The Board also considered the fact that the Series I Preferred Shares will be issued in exchange for multiple voting shares of Cathedra, which carry enhanced voting rights (1.52 votes per share) relative to subordinate voting shares of Cathedra (1 vote per share), such that affected holders are relinquishing incremental voting power in exchange for non-voting securities.
Board Determination
After considering the foregoing, and in consultation with its advisors, the Board determined that: (i) the Series I Preferred Shares do not provide enhanced or preferential consideration; (ii) the structure reflects an equalization mechanism intended to approximate, but not exceed, the value of Sphere Common Shares; and (iii) and the overall consideration structure, including the issuance of Series I Preferred Shares, is fair to Cathedra shareholders.
https://www.newsfilecorp.com/release/295921
Vancouver, British Columbia--(Newsfile Corp. - May 4, 2026) - Cathedra Bitcoin Inc. (TSXV: CBIT) ("Cathedra" or the "Company"
is providing the following additional disclosure regarding the Series I preferred shares (the "Series I Preferred Shares" issuable in connection with its plan of arrangement (the "Transaction" with Sphere 3D Corp. ("Sphere" previously announced on March 5, 2026. This press release provides additional information to Cathedra shareholders regarding the process undertaken by the board of directors of Cathedra (the "Board"
in reviewing and approving the consideration structure under the Transaction and provides additional context relating to the issuance of Series I Preferred Shares to certain shareholders. Background and Rationale for Structure
As disclosed in the Company's management information circular dated April 2, 2026 (the "Circular"
, the requirement to issue Series I Preferred Share consideration to those Cathedra shareholders who would otherwise receive in excess of 7% of the shares of Sphere post-closing ("Sphere Common Shares" , was a requirement of Sphere to address shareholder concentration concerns. In evaluating the consideration structure, including the Series I Preferred Shares, the Board undertook a detailed review process, which included:
consideration of the commercial rationale for the ownership cap and its importance to the overall viability of the Transaction;
review of the terms and conditions of the Series I Preferred Shares, including their economic and governance characteristics;
consideration of the longer-term economic implications of receiving Series I Preferred Shares relative to Sphere Common Shares;
discussions with legal and financial advisors, including in connection with a fairness opinion obtained in respect of the Transaction; and
evaluation of whether the structure resulted in any preferential or enhanced consideration to affected shareholders.
Key Features of the Series I Preferred Shares
In its deliberations, the Board focused on several key features of the Series I Preferred Shares that distinguish them from Sphere Common Shares:
Non-voting: The Series I Preferred Shares do not carry voting rights (other than limited class protections), whereas Sphere Common Shares are fully voting. This structure is designed to prevent new shareholders from acquiring disproportionate voting power immediately upon closing of the Transaction, thereby preserving an appropriate balance of governance control among the post-closing shareholder base.
Restricted liquidity and staged conversion: The Series I Preferred Shares are subject to staged conversion over three years (33⅓%, 66⅔%, 100%), resulting in delayed liquidity compared to immediately tradable Sphere Common Shares. This graduated conversion schedule is intended to promote orderly trading and price stability in the Sphere Common Shares by preventing a sudden influx of tradable shares that could create downward pressure on share price and market volatility.
Structural limitations: The Series I Preferred Shares are subject to limitations on conversion into Sphere Common Shares to ensure compliance with the rules of the Nasdaq Stock Market. In particular, absent shareholder approval, a holder of the Series I Preferred Shares may be precluded from converting such preferred shares into Sphere Common Shares if it would result in such holder exceeding certain maximum ownership thresholds under applicable Nasdaq rules. These limitations may delay or restrict a holder's ability to fully convert their Series I Preferred Shares into freely tradable Sphere Common Shares.
Dividend: The Series I Preferred Shares carry an 8% annual dividend, payable in additional Series I Preferred Shares (a "PIK dividend"
. In determining the fairness of this PIK dividend, the Board took into account that it does not provide current cash yield or liquidity and is payable in securities that are themselves subject to the same restrictions and staged conversion. The PIK dividend was included as a balancing mechanism to partially offset the economic disadvantages associated with the loss of voting rights and delayed liquidity. Importantly, the Board also considered that the dividend is not guaranteed. In particular, certain change of control or similar transactions may result in holders of Series I Preferred Shares foregoing the 8% dividend entirely. In such circumstances, the Series I Preferred Shares are treated in the same manner as Sphere Common Shares, and holders would not receive accrued or future PIK dividends. The Board also considered the fact that the Series I Preferred Shares will be issued in exchange for multiple voting shares of Cathedra, which carry enhanced voting rights (1.52 votes per share) relative to subordinate voting shares of Cathedra (1 vote per share), such that affected holders are relinquishing incremental voting power in exchange for non-voting securities.
Board Determination
After considering the foregoing, and in consultation with its advisors, the Board determined that: (i) the Series I Preferred Shares do not provide enhanced or preferential consideration; (ii) the structure reflects an equalization mechanism intended to approximate, but not exceed, the value of Sphere Common Shares; and (iii) and the overall consideration structure, including the issuance of Series I Preferred Shares, is fair to Cathedra shareholders.
