Sphere 3D (ANY) Provides December 2023 Production and Operations Updates
Sphere 3D Corp. (ANY) provides the results of its Bitcoin mining operation for December 2023.
Key points:
- 73.5 Bitcoin mined in December, compared to November and 311% more year-on-year.
- The operational hash rate at the end of the month was 1.3 EH/s, stable since November and 4x higher year-on-year.
- Uptime was 77% due to issues at our hosting partner’s Missouri site.
| Metrics1 | December 2022 | November 2023 | December 2023 |
| mined bitcoin | 17.9 | 71.7 | 73.5 |
| Bitcoin sold | 4.3 | 65.0 | 50.4 |
| Mining Income* | 0.3 million dollars | 2.6 million dollars | 3.1 million dollars |
| Bitcoin Holdings | 103.0 | 18.1 | 41.2 |
| Miners deployed | ~2,500 | ~12,800 | ~12,800 |
| Implemented hash rate at the end of the month (EH/s) | 100PH/s | 1.3 EH/s | 1.3 EH/s |
*Not audited
1 – Includes Sphere 3D assets temporarily held by Gryphon related to the terminated master services agreement.
CEO Comments
“What a year it has been, as we end 2023 on a high note! We brought online over 1.3 EH/s, terminated our master services agreement with Gryphon Digital Mining, Inc (“Gryphon”), which we hope will turn out by an additional 22.5 EH/s.% to our margins and reached a settlement with Core Scientific, Inc (“Core Scientific”) over a complex litigation. In December 2023, we mined 73.5 Bitcoin, representing an increase 311% year over year and an increase of 3% since November 2023. One of our hosting sites was down for a significant period (51% uptime in December) and we are working with our hosting partner to improve its uptime. The agreement with Core Scientific provides us with an expected additional capital of $10 million, which is non-dilutive to our shareholders. We plan to allocate the new capital to growth that will increase our EH/s. We believe we are well positioned to takeoff in 2024!
Basic scientific update
On December 21, 2023, Sphere 3D agreed to terms outlining a settlement with Core Scientific and its debtor affiliates, subject to approval by the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) . The terms of the agreement include the following:
- One general unsecured claim allowed in the amount of $10,000,000
- Treatment of General Unsecured Claims in Core Scientific’s bankruptcy reorganization plan (the “Plan”)
- Mutual Release of Claims and Causes of Action between Core Scientific and Sphere 3D
Currently, the Plan contemplates that general unsecured creditors, such as Sphere 3D, will receive capital from the reorganized Core Scientific, whose capital is expected to trade freely after the effective date of the Plan. The terms of the agreement provide Sphere 3D with non-dilutive capital to focus on its strategic growth, while achieving significant savings on litigation expenses.
The terms of the agreement do not expressly waive any claim that Sphere 3D has against Gryphon Digital Mining. Sphere 3D seeks recovery from Gryphon for damages related to Gryphon’s failure to file a timely proof of claim in Core Scientific’s bankruptcy proceedings by the deadline. Core Scientific previously argued that Gryphon’s failure to file the proof of claim by the deadline was a defense to Sphere 3D’s proof of claim against Core Scientific.
Faucet upgrade
As previously disclosed, on October 6, 2023, Sphere 3D terminated, effective immediately, the Master Services Agreement (“MSA”) between Sphere 3D and Gryphon, dated August 10, 2021, as amended on December 29, 2021. 2021. The completion of the MSA is expected to generate an additional 22.5% of gross profit.
In November 2023, Gryphon indicated, through its counsel, that upon receipt of certain information it would remit the outstanding revenues, less fees and expenses, generated under the MSA that Sphere 3D claims Gryphon currently holds on behalf of Sphere 3D, which Sphere 3D believes it amounts to approximately 21.6 bitcoins, or $919,377, as of December 31, 2023, before taking into account fees and expenses. Sphere believes that Gryphon has received the information mentioned in the previous sentence; Gryphon, however, has not yet returned the funds. Sphere 3D expects Gryphon to report earnings soon, but Sphere 3D is exploring its regulatory and legal options.
Havening Update
Sphere 3D has anticipated the shelter and is preparing accordingly. We are focusing on several alternatives and considering all growth options, including but not limited to adding exahash organically, mergers and acquisitions, as well as other options. Sphere 3D is currently focused on strategic opportunities and maintaining operational efficiency.
