Company: ANY
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015457
Chunk: 6

Company: Sphere 3D Corp.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1
Chunk 6
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 blockchain’s history. Once verified, miners compete to include the transaction in a new block through a process called Proof of Work, where they solve a complex cryptographic puzzle to find a valid hash that meets the network’s difficulty requirements. The first miner to solve the puzzle broadcasts the new block to the network, and if other nodes verify its validity, it is permanently added to the blockchain. As a reward for securing the network, the winning miner receives a block reward, which consists of newly minted Bitcoin—currently 3.125 BTC as of 2024—along with transaction fees paid by users. Over time, as the block reward continues to halve approximately every four years, transaction fees will become an increasingly important incentive for miners to continue securing the network. This system ensures Bitcoin remains decentralized, secure, and resistant to inflation.

As of December 31, 2024, we held approximately 14.9 Bitcoin. The fair value of our Bitcoin as of December 31, 2024 was approximately $1.4 million on our consolidated balance sheet.

Construction in Progress

In September 2024, we entered into a letter of intent with Simple Mining LLC (“Simple Mining”) to build-out a 12.5 megawatt (“MW”) site in Iowa with Simple Mining managing the build-out of the infrastructure for the new mining site. Due to delays in permitting and timeline, we shifted to a different site, under the same construct and power cost assumptions, reducing the overall capacity from 12.5 MW to 8 MW. For the year ended December 31, 2024, we made payments of $1.4 million towards the infrastructure.

Subsequent to December 31, 2024, we incurred additional costs of $1.4 million towards the infrastructure of the new 8 MW mining site in Iowa. The 8 MW site was energized on March 10, 2025. In March 2025, we entered into a Managed Services Agreement with Simple Mining to operate the site on our behalf.

Bitcoin Mining

We obtain Bitcoin as a result of our mining operations, and when necessary we sell Bitcoin to support our operations and strategic growth. We mine Bitcoin in Missouri, Texas and Iowa, which do not have any material state-specific regulatory restrictions on the mining of Bitcoin. However, it is possible that these states or other states in which we may seek to operate may create laws that would impede Bitcoin mining. We do not currently plan to engage in regular trading of Bitcoin other than sales to convert our