- The Company produced 12.78 Bitcoin during the month
- Total Bitcoin holdings grew to 62.03 coins
- Operations achieved 138.5 BTC/EH efficiency
- U.S. Customs delays miner shipments
Sphere 3D Corp. ("Sphere 3D" or the "Company") (Nasdaq: ANY),
dedicated to becoming the leading carbon-neutral Bitcoin mining
company operating at an industrial scale, provides results of its
Bitcoin mining operation as of July 31, 2022.
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CEO Comments
"I am very pleased with the production of our mining operation
during July. Our miners operated very efficiently and maintained an
average uptime of about 94%. Also during the month, we secured
hosting space with Compute North, the leader in sustainable,
large-scale computing infrastructure, to host our new S19j Pros at
their new Wolf Hollow site in Granbury, TX. This facility is one of
the newest, next-generation data centers in the U.S. and should
provide Sphere 3D solid long-term hosting options.
"The shipment of 4,000 S19j Pros discussed in last month's
update are set for delivery and installation at Compute North's
location beginning in August. Logistical challenges with U.S.
Customs are delaying final delivery past the expected July 2022
delivery dates. The Sphere 3D team worked diligently with the
supplier to secure expedited delivery, and the miners were air
shipped to the U.S. in multiple shipments arriving between July 6
and July 10. Unfortunately, U.S. Customs held the shipments and
restricted final delivery pending receipt of documentation from our
equipment supplier. On August 2, 2022, our teams gained the release
of one shipment containing about 540 miners, which are on their way
to Compute North. We expect to get the other shipments freed soon,
but we won't speculate when final delivery will be allowed by U.S.
Customs. Based on conversations with industry leaders, other mining
companies are being challenged with similarly frustrating U.S.
Customs clearance issues.
"As of July 31, Sphere 3D had made contractual payments to FuFu
Technologies Ltd.(BitFuFu) totaling $106.5 million on the purchase
agreement entered into and announced in September 2021. Considering
current market conditions and the market price for the S19j Pros
miners addressed by the agreement, we are revisiting the terms of
the agreement with Bitfufu. The timing and volume of any future
deliveries with respect to the 60,000-unit purchase order are
expected to be impacted by these discussions, and upcoming payments
on the contract are not currently expected to be made. We cannot
make any assurances as to the outcome of these discussions;
however, we remain optimistic that a timely and equitable
resolution can be reached. As part of our discussions, BitFufu is
working with Bitmain on behalf of the Company.
"We have explored multiple financing options in recent months
and have determined to maintain our current balance sheet given
market conditions and available financing terms. The Company
currently operates unencumbered by long-term debt and intends to
continue its conservative approach to capital expenditure in the
near term. To maintain our conservative approach, we intend to take
delivery of our fully funded miners in 2022 and push delivery of
our unfunded mining exahash into 2023."
Bitcoin Production and Holdings
Update
During the month ended July 31, 2022, Sphere 3D's mining
operation produced 12.78 Bitcoin or an average daily production of
0.41 Bitcoin. Daily production volume remained flat compared to
June 2022. The equivalent approximate value of the Company's
production, based on a Bitcoin price of $23,378 on July 31, 2022,
totaled approximately $298,771 for the month.
Since the Company began its mining operations during the first
quarter of 2022, it has produced 68.05 Bitcoin, and as of July 31,
2022, held 62.03 Bitcoin. This represented a fair market value of
about $1.45 million based on the Bitcoin price of $23,378 on July
31, 2022. As of July 31, 2022, the Company is operating
approximately 1,000 S19j Pros miners delivering a production
capacity of about 100 PH/s. Sphere 3D's mining fleet operated at
138.5 BTC/EH efficiency in July and averaged approximately 94
percent uptime.
The Company continues to employ a HODL strategy for the majority
of our holdings. The difference between the number of Bitcoin mined
versus its holdings is the Bitcoin Sphere 3D used to fund working
capital.
Gryphon Contract
Clarification
Based on investor feedback, the Company is clarifying the
canceled merger and the Master Service Agreement (MSA) with Gryphon
Digital Mining (Gryphon). Sphere 3D had three individual agreements
in place with Gryphon. 1) The merger agreement, 2) The sublicense
agreement for hosting with Core Scientific (Core), and 3) The MSA
covering Gryphon's role in managing Sphere 3D's mining fleet.
- The merger agreement was canceled on April 4, 2022. No
additional payments are required by Sphere 3D to Gryphon.
- The sublicense agreement with Core called for payments of more
than $50 million to Core by Sphere 3D to prepurchase energy for the
Company's miners. The agreement between Gryphon and Sphere 3D
included Gryphon acting as an intermediary for these payments.
Payments from this contract have been halted due to the changes to
the miner delivery schedule and other material reasons.
- The MSA governs the continued cooperation between Sphere 3D and
Gryphon following the merger termination. Gryphon receives
compensation from monthly Bitcoin production for services it
provides.
Corporate Update
Ms. Trompeter was featured in the panel discussion, Women
Powering Mining, at Mining Disrupt, the world's largest Bitcoin
mining expo. The panel discussion was held on July 28, 2022. She
joined an all-woman cast of leaders from the mining industry on a
panel discussing several topics, including the Bitcoin industry,
renewable energy, and how women are driving and leading innovation
in the Bitcoin mining space. For more information, visit
www.miningdisrupt.com.
CEO Closing Remarks
"Sustainable change and positioning a Company for growth require
not only a level head, nerves of steel, and conviction but also a
long-term focus. We are working diligently to expand our mining
operations in 2022 while exploring new and existing opportunities
to enhance shareholder value. Once complete, Sphere 3D will have a
strong balance sheet, and our Company will be well positioned for
growth.
"I am proud of the work the Sphere 3D team is doing. We are
working hard to grow the Company and drive incremental value for
shareholders. I am proud to lead Sphere 3D on this journey." –
Patricia Trompeter, CEO of Sphere 3D
About Sphere 3D
Sphere 3D Corp. (Nasdaq: ANY) is a net carbon-neutral
cryptocurrency miner with decades of proven enterprise
data-services expertise. The Company is rapidly growing its
industrial-scale 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 the Company, 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 20-F and Form
6-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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220808005131/en/
Sphere 3D NMN Advisors
Sphere3d@nmnadvisors.com Kurt Kalbfleisch, CFO, Sphere 3D
Investor.relations@sphere3d.com
Sphere 3D (NASDAQ:ANY)
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