Sphere 3D(US:ANY)2025-03-28 20:25Revenue and Financial Performance - Revenue for 2024 was $16.6 million, a decrease of $5.3 million from $21.9 million in 2023, primarily due to a $3.1 million decline in Bitcoin mining revenue and a $2.2 million decrease from the sold Service and Product segment [180]. - Direct cost of revenues decreased to $13.4 million in 2024 from $15.9 million in 2023, primarily due to lower hosting fees and the transition to newer mining machines [182]. - General and administrative expenses decreased to $12.4 million in 2024 from $15.8 million in 2023, driven by reductions in legal fees and operating costs [185]. - Investment income for 2024 was $9.0 million, attributed to a $4.1 million realized gain and a $4.9 million unrealized gain on equity investment in Core Scientific Inc. [195]. - The company reported a net cash used in operating activities of $4.576 million for 2024, compared to $6.582 million in 2023, primarily due to a net loss of $9.5 million [207]. - Net cash provided by investing activities was $4.028 million in 2024, driven by $11.4 million from the sale of equity securities, offset by $7.1 million in capital expenditures for mining equipment [208]. - The company received $5.387 million from financing activities in 2024, an increase from $3.064 million in 2023, primarily from the issuance of common shares and warrants [209]. Mining Operations - Bitcoin mining operations experienced a reduction of 3,300 machines, or 22%, taken offline for relocation, impacting production and revenue [180]. - As of December 31, 2024, the company owned approximately 14,000 miners with a total hashrate capacity of 0.76 EH/s, and is transitioning to newer-generation machines [177]. - The company is focusing on reducing mining costs and refreshing its mining fleet to enhance efficiency and mitigate financial risks [205]. Compliance and Risks - The company has a period until September 2, 2025, to regain compliance with Nasdaq listing requirements after the bid price fell below $1.00 per share [181]. - Significant risks include potential shortfalls in projected mining earnings and increases in operating costs, which could adversely impact the company's ability to continue operations [206]. Cash and Funding - As of December 31, 2024, the company had cash and cash equivalents of $5.4 million, an increase from $0.6 million at December 31, 2023 [200]. - The company expects to raise up to $8.0 million through an At-the-Market Offering Program to fund working capital and corporate strategy initiatives [201]. - A Securities Purchase Agreement was executed on November 19, 2024, resulting in the issuance of 2,350,000 common shares at a price of $1.42 per share, generating approximately $5.4 million in net proceeds [203]. - The company has projected that cash on hand may not be sufficient to continue operations within 12 months if additional funding is not raised [204]. Asset Management - The fair value of Bitcoin held as of December 31, 2024, was approximately $1.4 million, with the company holding about 14.9 Bitcoin [178]. - The company recorded a loss on disposal of property and equipment of $3.5 million in 2024, related to the sale of 3,263 miners [187]. - The company early adopted ASU 2023-08, resulting in a $20,000 decrease to the opening balance of accumulated deficit and an increase to cryptocurrency assets [178]. Infrastructure Development - A new 8 MW mining site in Iowa was energized on March 10, 2025, with total payments of $2.8 million made towards infrastructure development [210][211].