false 2024-08-13 0001591956 Sphere 3D Corp. 0001591956 2024-08-13 2024-08-13

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 13, 2024

SPHERE 3D CORP.
(Exact name of registrant as specified in its charter)

Ontario 001-36532 98-1220792
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)

243 Tresser Blvd, 17th Floor
 Stamford, Connecticut, United States 06901
 (Address of principal executive offices) (ZIP Code)

Registrant’s telephone number, including area code: (647) 952 5049

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class   Trading Symbols   Name of each exchange on which registered
Common Shares   ANY   NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.  Results of Operations and Financial Condition.

On August 13, 2024, we issued a press release announcing our financial results for our second fiscal quarter ended June 30, 2024.  The information contained in the press release is incorporated herein by reference and furnished as Exhibit 99.1.

The information in this Item 2.02 and Exhibit 99.1 is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.

Item 9.01.  Financial Statements and Exhibits

(d)  Exhibits

99.1 Press release dated August 13, 2024
   
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:     August 13, 2024

  SPHERE 3D CORP.
     
     
  By: /s/ Patricia Trompeter
    Patricia Trompeter
    Chief Executive Officer

Exhibit 99.1

Sphere 3D Reports Second Quarter 2024 Financial Results

STAMFORD, Connecticut, August 13, 2024 - Sphere 3D Corp. (NASDAQ: ANY) ("Sphere 3D"), a Bitcoin mining company operating at an industrial scale, today reported financial results for the quarter ended June 30, 2024.

2024 Second Quarter Highlights

• Sphere 3D recognized a $7.3 million unrealized gain on investment in equity securities acquired through the Core settlement.

• Sphere 3D mined 70.7 Bitcoin during the quarter.

• Sphere 3D ended the quarter with 1.2 EH/s.

CFO Comments

"Despite some challenges in the second quarter, including a 50% reduction in block rewards and temporary interruptions from certain hosting partners, we are excited to share that our first shipment of S21s were energized in July", said Kurt Kalbfleisch, Chief Financial Officer of Sphere 3D. "This marks an important milestone in our long-term strategy to refresh and enhance our fleet. As we continue to upgrade our equipment, we remain committed to pursuing strategic opportunities, including potential mergers, that will position us for sustained growth and success in the future."

Hashrate Update

Sphere 3D had approximately 1.2 EH/s hosted at June 30, 2024.

Bitcoin Asset and Value

As of June 30, 2024, the Company had Bitcoin holdings of 7.2, with a market value of $0.5 million.

Second Quarter FY 2024 Financial Results

• Bitcoin production during the second quarter of 2024 was 70.7 Bitcoin, compared to 178.4 Bitcoin for the second quarter of 2023.

• Revenue for the second quarter was $4.7 million, compared to $5.5 million for the second quarter of 2023. Bitcoin mining revenue for the second quarter of 2024 was $4.7 million, compared to $5.0 million for the second quarter of 2023.

• Operating costs and expenses for the quarter were $10.4 million, compared to $10.2 million for the second quarter of 2023.

• Depreciation and amortization was $1.8 million, compared to $1.4 million for the second quarter of 2023.

• Net income was $2.1 million, or $0.11 basic earnings per share and $0.10 diluted earnings per share, compared to a net loss of $4.8 million, or a net loss of $0.44 per share, for the second quarter of 2023.

• Unrealized gain of $7.3 million recognized during the second quarter of 2024 on investment in equity securities acquired through the Core settlement.

About Sphere 3D

Sphere 3D Corp. (NASDAQ: ANY) is a cryptocurrency miner growing its industrial-scale Bitcoin mining operation through the capital-efficient procurement of next-generation mining equipment and partnering with best-in-class data center operators. Sphere 3D is dedicated to growing shareholder value while honoring its commitment to strict environmental, social, and governance standards. For more information about Sphere 3D, please visit Sphere3D.com.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements generally relate to future events, including the timing of the proposed transaction and other information related to the proposed transaction. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions.  Expectations and beliefs regarding matters discussed herein may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.  The forward-looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described in filings with the SEC, including Sphere 3D's reports filed on Form 10-K and Form 8-K and in other filings made by Sphere 3D with the SEC from time to time and available at www.sec.gov.  These forward-looking statements are based on current expectations, which are subject to change.

Sphere 3D Contact

Kurt Kalbfleisch, CFO, Sphere 3D

Investor.relations@sphere3d.com

SPHERE 3D CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share and per share amounts) 

     Three Months Ended       Six Months Ended   
    June 30, 2024     June 30, 2024  
    2024     2023     2024     2023  
 Revenues:     (Unaudited)       (Unaudited)         
 Bitcoin mining revenue $ 4,666   $ 4,966   $ 11,612   $ 7,490  
 Service and product revenue   -     500     -     1,002  
 Total revenues   4,666     5,466     11,612     8,492  
                         
 Operating costs and expenses:                         
 Cost of Bitcoin mining revenue (exclusive of                          
      depreciation and amortization shown below)   3,959     4,074     8,266     6,039  
 Cost of service and product revenue   -     209     -     507  
 Sales and marketing   -     277     -     551  
 Research and development   -     227     -     497  
 General and administrative   2,986     3,634     6,438     7,105  
 Depreciation and amortization   1,816     1,375     3,637     2,400  
 Impairmant of property and equipment   860     -     860     -  
 Loss on disposal of property and equipment   691     251     691     251  
 Change in fair value of Bitcoin   65     -     (703 )   -  
 Realized gain on sale of Bitcoin   -     (139 )   -     (772 )
 Impairment of Bitcoin   -     254     -     350  
 Total operating costs and expenses   10,377     10,162     19,189     16,928  
 Loss from operations   (5,711 )   (4,696 )   (7,577 )   (8,436 )
 Other income (expense):                         
 Unrealized gain on investment in equity securities   7,279     -     4,539     -  
 Interest income and other income, net   558     1,113     687     1,364  
 Interest expense   -     (1,173 )   -     (1,173 )
 Income (loss) before income taxes   2,126     (4,756 )   (2,351 )   (8,245 )
 Provision for income taxes   2     4     2     4  
 Net income (loss)   2,124     (4,760 )   (2,353 )   (8,249 )
 Less: Non-controlling interest - income   -     67     -     83  
 Net income (loss) available to common shareholders $ 2,124   $ (4,827 ) $ (2,353 ) $ (8,332 )
                         
 Net income (loss) per share:                         
 Basic $ 0.11   $ (0.44 ) $ (0.13 ) $ (0.78 )
 Diluted $ 0.10   $ (0.44 ) $ (0.13 ) $ (0.78 )
 Shares used in computing net income (loss) per share:                         
 Basic   18,711,718     11,051,588     17,644,315     10,673,876  
 Diluted   20,884,287     11,051,588     17,644,315     10,673,876  

SPHERE 3D CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS 
(In thousands of U.S. dollars) 

    June 30,      December 31,  
    2024     2023  
     (Unaudited)       (Unaudited)   
ASSETS            
 Cash and cash equivalents $ 4,263   $ 586  
 Digital assets, net   450     986  
 Investment in equity securities   9,542     -  
 Other current assets   3,018     11,938  
 Total current assets   17,273     13,510  
 Property and equipment, net   19,535     24,166  
 Intangible assets, net   3,838     4,581  
 Other non-current assets   3,380     3,406  
 Total assets $ 44,026   $ 45,663  
             
LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS' EQUITY        
 Current liabilities $ 3,935   $ 5,346  
 Total temporary equity   6,656     13,794  
 Total shareholders' equity   33,435     26,523  
 Total liabilities, temporary equity, and shareholders' equity $ 44,026   $ 45,663  

v3.24.2.u1
Document and Entity Information Document
Aug. 13, 2024
Document Information [Line Items]  
Document Type 8-K
Document Creation Date Aug. 13, 2024
Document Period End Date Aug. 13, 2024
Amendment Flag false
Entity Registrant Name Sphere 3D Corp.
Entity Address, Address Line One 243 Tresser Blvd, 17th Floor
Entity Address, City or Town Stamford
Entity Address, State or Province CT
Entity Address, Country US
Entity Address, Postal Zip Code 06901
Entity Incorporation, State Country Name A6
City Area Code 647
Local Phone Number 952 5049
Entity File Number 001-36532
Entity Central Index Key 0001591956
Entity Emerging Growth Company false
Entity Tax Identification Number 98-1220792
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Shares
Trading Symbol ANY
Security Exchange Name NASDAQ
Sphere 3D (NASDAQ:ANY)
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