Company: ANY
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015457
Chunk: 73

Company: Sphere 3D Corp.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7
Chunk 73
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 result in further fluctuations in exahash. There was also a decrease in revenues of $2.2 million related to our former Service and Product segment which was sold in December 2023.

31

Operating Expenses

Cost of Revenue (exclusive of depreciation and amortization expense)

For the years ended December 31, 2024 and 2023, direct cost of revenues were $13.4 million and $15.9 million, respectively, representing a decrease of $2.5 million primarily due to lower hosting fees due to machines being taken offline to be relocated and the transition of removing older mining machines and replacing them with newer generation machines, as well the prior year disposal of our Service and Product segment. 

Sales and Marketing Expense

Sales and marketing expenses were nil and $0.9 million for the years ended December 31, 2024 and 2023, respectively. The decrease of $0.9 million was due to the sale of our Service and Product segment in December 2023 and we no longer have sales and marketing expenses.

Research and Development Expense

Research and development expenses were nil and $1.0 million for the years ended December 31, 2024 and 2023, respectively. The decrease of $1.0 million was due to the sale of our Service and Product segment in December 2023 and we no longer have research and development expense.

General and Administrative Expense

General and administrative expenses were $12.4 million and $15.8 million for the years ended December 31, 2024 and 2023, respectively. The decrease of $3.4 million was primarily due to a decrease of $1.2 million in legal fees associated with the 2023 litigation with Core Scientific Inc. and Gryphon Digital Mining Inc., a decrease of $0.9 million related to operating costs for our former special purpose acquisition company which no longer exists for 2024, a $0.7 million decrease associated with outside services related to our expansion into the cryptocurrency industry, a decrease of $0.6 million for employee and related expenses, a decrease of $0.4 million in investor relations, and a decrease of $0.3 million in insurance cost. These decreases were offset by an increase of $0.5 million in share-based compensation primarily related to awards to certain executives, and a $0.3 million increase in costs related to strategic business growth.

Depreciation and Amortization Expense

Depreciation and amortization expense was $7.