Company: ANY
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001591956-25-000006
Chunk: 70

Company: Sphere 3D Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 2
Chunk 70
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 the third quarter of 2024, we are in the process of removing our older mining equipment and replacing them with newer generation machines. This is expected to be an ongoing process through the third quarter of 2025 which may result in further fluctuations in exahash. During the first quarter of 2025, all of our revenue was derived from Bitcoin mining. 

23

Operating Expenses

Cost of Revenue (exclusive of depreciation and amortization expense)

For the first quarter of 2025 and 2024, direct cost of revenues were $2.2 million and $4.3 million, respectively. The $2.1 million decrease in cost of revenue was primarily due to lower hosting fees related to machines taken offline to be relocated and the transition of removing older mining machines and replacing them with newer generation machines.

General and Administrative Expense

General and administrative expenses were $3.2 million and $3.5 million for the first quarter of 2025 and 2024. The decrease of $0.3 million was due to a decrease of $1.0 million in share-based compensation primarily related to forfeited awards, a decrease of $0.3 million in employee and related expenses primarily related to a decrease in headcount, and a $0.2 million decrease in insurance and property tax expenses. These decreases were offset by an increase in legal fees of $0.8 million related to the Gryphon Digital Mining, Inc. litigation and an increase of $0.4 million in costs related to strategic business growth.

Depreciation and Amortization Expense

Depreciation and amortization expense was $1.6 million and $1.8 million for the first quarter of 2025 and 2024, respectively. The decrease of $0.2 million was primarily due to lessor depreciation related to our Bitcoin mining machines due to current year sales of machines and the impairment in the second quarter of 2024, resulting in a lower cost basis to be depreciated over the remaining useful life.

Loss on Disposal of Property and Equipment

Loss on disposal of property and equipment was $0.8 million and nil for the first quarter of 2025 and 2024, respectively, and related to the sale of mining equipment.

Change in Fair Value of Bitcoin

Change in fair value of Bitcoin was a loss of $0.2 million and a gain of $0.8 million for the first quarter of 2025 and 2024, respectively. The loss or gain is the change in fair