(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
TABLE OF CONTENTS | ||||||||||||||
Item 1. | Page | |||||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||||||||||
Item 4. | Controls and Procedures | |||||||||||||
PART II — OTHER INFORMATION | ||||||||||||||
Item 1. | Legal Proceedings | |||||||||||||
Item 1A. | Risk Factors | |||||||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||||||||
Item 3. | Defaults Upon Senior Securities | |||||||||||||
Item 4. | Mine Safety Disclosures | |||||||||||||
Item 5. | Other Information | |||||||||||||
Item 6. | Exhibits | |||||||||||||
Signature |
March 31, 2024 | December 31, 2023 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Digital assets | |||||||||||
Investment in equity securities | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities, Temporary Equity and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Accrued payroll and employee compensation | |||||||||||
Warrant liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Commitments and contingencies (Note 12) | |||||||||||
Temporary equity: | |||||||||||
Series H preferred shares, | |||||||||||
Shareholders’ equity: | |||||||||||
Common shares, | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities, temporary equity, and shareholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenues: | |||||||||||
Bitcoin mining revenue | $ | $ | |||||||||
Service and product revenue | |||||||||||
Total revenues | |||||||||||
Operating costs and expenses: | |||||||||||
Cost of Bitcoin mining revenue | |||||||||||
Cost of service and product revenue | |||||||||||
Sales and marketing | |||||||||||
Research and development | |||||||||||
General and administrative | |||||||||||
Depreciation and amortization | |||||||||||
Change in fair value of Bitcoin | ( | ||||||||||
Realized gain on sale of Bitcoin | ( | ||||||||||
Impairment of Bitcoin | |||||||||||
Total operating costs and expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Other income (expense): | |||||||||||
Unrealized loss on investment in equity securities | ( | ||||||||||
Interest income and other income, net | |||||||||||
Net loss | ( | ( | |||||||||
Less: Non-controlling interest - income | |||||||||||
Net loss available to common shareholders | $ | ( | $ | ( | |||||||
Net loss per share: | |||||||||||
Basic and diluted | $ | ( | $ | ( | |||||||
Shares used in computing net loss per share: | |||||||||||
Basic and diluted | |||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
Other comprehensive loss: | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Total other comprehensive loss | ( | ( | |||||||||
Comprehensive loss | $ | ( | $ | ( |
Common Shares | Accumulated Other Comprehensive Loss | Accumulated Deficit | Non-controlling Interest | Total Shareholders' Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance at January 1, 2024 | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||
— | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of common shares for conversion of preferred shares | — | — | — | ||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Common Shares | Accumulated Other Comprehensive Loss | Accumulated Deficit | Non-controlling Interest | Total Shareholders' Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
— | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Issuance of common shares for conversion of preferred shares | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of common shares pursuant to the vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Remeasurement of redeemable non-controlling interest | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Unrealized loss on investment in equity securities | |||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation | |||||||||||
Change in fair value of Bitcoin | ( | ||||||||||
Change in fair value of warrant liabilities | ( | ( | |||||||||
Bitcoin issued for services | |||||||||||
Realized gain on sale of Bitcoin | ( | ||||||||||
Impairment of Bitcoin | |||||||||||
Noncash lease cost | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Proceeds from sale of Bitcoin | |||||||||||
Digital assets | ( | ( | |||||||||
Accounts receivable | |||||||||||
Accounts payable and accrued liabilities | ( | ||||||||||
Accrued payroll and employee compensation | ( | ||||||||||
Other assets and liabilities, net | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Investing activities: | |||||||||||
Proceeds from sale of Bitcoin | |||||||||||
Proceeds from sale of property and equipment | |||||||||||
Payments for purchase of property and equipment | ( | ||||||||||
Net cash provided by investing activities | |||||||||||
Net increase in cash, and cash equivalents | |||||||||||
Cash, cash equivalents, and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | $ | |||||||||
Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
Supplemental disclosures of non-cash investing activities: | |||||||||||
Settlement of prepaid hosting services deposit with equity securities | $ | $ | |||||||||
Remeasurement of redeemable non-controlling interest | $ | $ |
March 31, 2024 | |||||||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investment in equity securities | $ | $ | $ | $ | |||||||||||||||||||
Bitcoin | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Warrant liabilities | $ | $ | $ | $ |
December 31, 2023 | |||||||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Warrant liabilities | $ | $ | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Common share price | $ | $ | |||||||||
Expected volatility | % | % | |||||||||
Risk-free interest rate | % | % |
Warrant liability as of January 1, 2024 | $ | |||||||
Change in fair value LDA warrant | ( | |||||||
Warrant liability as of March 31, 2024 | $ | |||||||
Balance at January 1, 2024 | $ | ||||
Cumulative effect upon adoption of ASU 2023-08 | |||||
Revenue recognized from Bitcoin mined | |||||
Proceeds from sale of Bitcoin | ( | ||||
Bitcoin issued for services | ( | ||||
Change in fair value of Bitcoin | |||||
Balance at March 31, 2024 | $ |
March 31, 2024 | |||||
Number of Bitcoin held | |||||
Carrying basis of Bitcoin | $ | ||||
March 31, 2024 | December 31, 2023 | ||||||||||
Digital mining hosting deposit | $ | $ | |||||||||
Prepaid digital hosting services | |||||||||||
Prepaid services | |||||||||||
Prepaid insurance | |||||||||||
Other | |||||||||||
Total other current assets | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Mining equipment | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Prepaid digital hosting services | $ | $ | |||||||||
Other | |||||||||||
Total other non-current assets | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Supplier agreements | $ | $ | |||||||||
Capitalized development costs | |||||||||||
Accumulated amortization: | |||||||||||
Supplier agreements | ( | ( | |||||||||
Capitalized development costs | ( | ( | |||||||||
( | ( | ||||||||||
Total finite-lived intangible assets, net | $ | $ | |||||||||
Date issued | Contractual life (years) | Exercise price | Number outstanding | Expiration | ||||||||||||||||||||||
July 2021 | $ | |||||||||||||||||||||||||
August 2021 | $ | |||||||||||||||||||||||||
August 2021 | $ | |||||||||||||||||||||||||
September 2021 | $ | |||||||||||||||||||||||||
October 2021 | $ | |||||||||||||||||||||||||
February 2022 | $ | |||||||||||||||||||||||||
February 2022 | $ | |||||||||||||||||||||||||
February 2022 | $ | |||||||||||||||||||||||||
April 2023 | $ | |||||||||||||||||||||||||
August 2023 | $ | |||||||||||||||||||||||||
August 2023 | $ | |||||||||||||||||||||||||
Three Months Ended March 31, 2024, | |||||||||||
2024 | 2023 | ||||||||||
Expected volatility | |||||||||||
Expected term (in years) | — | ||||||||||
Risk-free interest rate | |||||||||||
Dividend yield |
Shares Subject to Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Options outstanding — January 1, 2024 | $ | ||||||||||||||||||||||
Granted | $ | ||||||||||||||||||||||
Exercised | $ | ||||||||||||||||||||||
Forfeited | $ | ||||||||||||||||||||||
Options outstanding — March 31, 2024 | $ | $ | |||||||||||||||||||||
Vested and expected to vest — March 31, 2024 | $ | $ | |||||||||||||||||||||
Exercisable — March 31, 2024 | $ | $ |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding — January 1, 2024 | $ | ||||||||||
Granted | $ | ||||||||||
Forfeited | $ | ||||||||||
Outstanding — March 31, 2024 | $ | ||||||||||
Vested and unreleased — March 31, 2024 | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Sales and marketing | $ | $ | |||||||||
General and administrative | |||||||||||
Total share-based compensation expense | $ | $ |
March 31, 2024 | |||||||||||
Unrecognized Expense | Remaining Weighted-Average Recognition Period (years) | ||||||||||
RSUs | $ | ||||||||||
Stock options | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Common share purchase warrants | |||||||||||
Preferred shares issued and outstanding | |||||||||||
Options and RSUs outstanding | |||||||||||
Three months ended March 31, 2023 | Digital Mining | Service and Product | Unallocated | Total Consolidated | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
Segment gross profit | |||||||||||||||||||||||
Segment loss from operations | ( | ( | ( | ||||||||||||||||||||
Capital expenditures | |||||||||||||||||||||||
Depreciation and amortization |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Customer A | % | % | |||||||||
Customer B | % | % | |||||||||
Customer C | % | % | |||||||||
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net cash used in operating activities | $ | (58) | $ | (164) | ||||||||||
Net cash provided by investing activities | $ | 1,522 | $ | 1,540 | ||||||||||
Exhibit | Filed | Incorporated by Reference | |||||||||||||||
Number | Description | Herewith | Form | File No. | Date Filed | ||||||||||||
3.1 | 6-K | 001-36532 | 3/25/2015 | ||||||||||||||
3.2 | 6-K | 001-36532 | 7/17/2017 | ||||||||||||||
3.3 | 8-K | 001-36532 | 10/2/2018 | ||||||||||||||
3.4 | 8-K | 001-36532 | 11/5/2018 | ||||||||||||||
3.5 | 8-K | 001-36532 | 11/14/2018 | ||||||||||||||
3.6 | 8-K | 001-36532 | 7/12/2019 | ||||||||||||||
3.7 | 8-K | 001-36532 | 11/8/2019 | ||||||||||||||
3.8 | 8-K | 001-36532 | 5/8/2020 | ||||||||||||||
3.9 | 8-K | 001-36532 | 9/29/2020 | ||||||||||||||
3.10 | 6-K | 001-36532 | 1/7/2021 | ||||||||||||||
3.11 | 6-K | 001-36532 | 7/15/2021 | ||||||||||||||
3.12 | 6-K | 001-36532 | 10/4/2021 | ||||||||||||||
3.13 | 8-K | 001-36532 | 6/28/2023 | ||||||||||||||
3.14 | 6-K | 001-36532 | 7/17/2017 | ||||||||||||||
3.15 | 6-K | 001-36532 | 2/1/2022 | ||||||||||||||
3.16 | 8-K | 001-36532 | 1/13/2023 | ||||||||||||||
3.17 | 6-K | 001-36532 | 5/12/2017 | ||||||||||||||
10.1 | 8-K | 001-36532 | 1/19/2024 | ||||||||||||||
10.2 | 8-K | 001-36532 | 3/29/2024 | ||||||||||||||
10.3 | 8-K | 001-36532 | 3/29/2024 | ||||||||||||||
10.4 | 8-K | 001-36532 | 3/29/2024 | ||||||||||||||
31.1 | X | ||||||||||||||||
Exhibit | Filed | Incorporated by Reference | |||||||||||||||
Number | Description | Herewith | Form | File No. | Date Filed | ||||||||||||
31.2 | X | ||||||||||||||||
32.1 | X | ||||||||||||||||
32.2 | X | ||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | X | |||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema | X | |||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | X | |||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | X | |||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | X | |||||||||||||||
101.PRE | Inline XBRL Taxonomy Presentation Linkbase | X | |||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL as contained in Exhibit 101) | X |
Sphere 3D Corp. | ||||||||||||||
Date: | May 13, 2024 | By: | /s/ Patricia Trompeter | |||||||||||
Patricia Trompeter | ||||||||||||||
Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Sphere 3D Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Patricia Trompeter | ||
Patricia Trompeter | ||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Sphere 3D Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Kurt L. Kalbfleisch | ||
Kurt L. Kalbfleisch | ||
Senior Vice-President and | ||
Chief Financial Officer |
• | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and | |||||||
• | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/s/ Patricia Trompeter | ||
Patricia Trompeter | ||
Chief Executive Officer |
• | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and | |||||||
• | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/s/ Kurt L. Kalbfleisch | ||
Kurt L. Kalbfleisch | ||
Senior Vice-President and | ||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred shares , no par value | $ 0 | $ 0 |
Preferred shares, shares issued (in shares) | 26,556 | 43,515 |
Preferred shares, outstanding (in shares) | 26,556 | 43,515 |
Common shares, no par value | $ 0 | $ 0 |
Common shares, issued (in shares) | 17,796,326 | 15,373,616 |
Common shares, outstanding (in shares) | 17,796,326 | 15,373,616 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (4,477) | $ (3,489) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustment | (3) | (2) |
Total other comprehensive (loss) income | (3) | (2) |
Comprehensive loss | $ (4,480) | $ (3,491) |
Organization and Business |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Sphere 3D Corp. was incorporated under the Business Corporations Act (Ontario) on May 2, 2007 as T.B. Mining Ventures Inc. On March 24, 2015, the Company completed a short-form amalgamation with a wholly-owned subsidiary. In connection with the short-form amalgamation, the Company changed its name to “Sphere 3D Corp.” Any reference to the “Company”, “Sphere 3D”, “we”, “our”, “us”, or similar terms refers to Sphere 3D Corp. and its subsidiaries. In January 2022, the Company commenced operations of its Bitcoin mining business and is dedicated to becoming a leader in the Blockchain and Crypto Industry. The Company has established and plans to continue to grow an enterprise-scale mining operation through the procurement of mining equipment and partnering with experienced service providers. In addition, through December 28, 2023, the Company delivered data management and desktop and application virtualization solutions through hybrid cloud, cloud and on premise implementations by its global reseller network. On December 28, 2023, the Company sold its service and product segment which included HVE ConneXions and Unified ConneXions. Liquidity and Going Concern The Company has recurring losses from operations and incurred a net loss of approximately $4.5 million for the three months ended March 31, 2024. Management has projected that based on our hashing rate at March 31, 2024, cash on hand may not be sufficient to allow the Company to continue operations and there is substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date of issuance of the financial statements if we are unable to raise additional funding for operations. We expect our working capital needs to increase in the future as we continue to expand and enhance our operations. Our ability to raise additional funds for working capital through equity or debt financings or other sources may depend on the financial success of our then current business and successful implementation of our key strategic initiatives, financial, economic and market conditions and other factors, some of which are beyond our control. Further equity financings may have a dilutive effect on shareholders and any debt financing, if available, may require restrictions to be placed on our future financing and operating activities. We require additional capital and if we are unsuccessful in raising that capital at a reasonable cost and at the required times, or at all, we may not be able to continue our business operations in the cryptocurrency mining industry or we may be unable to advance our growth initiatives, either of which could adversely impact our business, financial condition and results of operations. Significant changes from the Company’s current forecasts, including but not limited to: (i) shortfalls from projected mining earning levels; (ii) increases in operating costs; (iii) fluctuations in the value of cryptocurrency; and (iv) inability to maintain compliance with the requirements of the NASDAQ Capital Market and/or inability to maintain listing with the NASDAQ Capital Market could have a material adverse impact on the Company’s ability to access the level of funding necessary to continue its operations at current levels. If any of these events occurs or the Company is unable to generate sufficient cash from operations or financing sources, the Company may be forced to liquidate assets where possible and/or curtail, suspend or cease planned programs or operations generally or seek bankruptcy protection or be subject to an involuntary bankruptcy petition, any of, which would have a material adverse effect on the Company’s business, results of operations, financial position and liquidity. These factors, among others, indicate there is substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date of issuance of the financial statements. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of this uncertainty.
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Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The condensed consolidated financial statements of the Company have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”), applied on a basis consistent for all periods. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 13, 2024. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been appropriately eliminated in consolidation. Use of Estimates The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Foreign Currency Translation The financial statements of the Company’s foreign subsidiary, for which the functional currency is the local currency, is translated into U.S. dollars using the exchange rate at the consolidated balance sheet date for assets and liabilities and a weighted-average exchange rate during the year for revenue, expenses, gains and losses. Translation adjustments are recorded as accumulated other comprehensive income (loss) within shareholders’ equity. Gains or losses from foreign currency transactions are recognized in the condensed consolidated statements of operations. Such transactions resulted in minimal gains or losses for both the three months ended March 31, 2024 and 2023. Cash and Cash Equivalents Highly liquid investments with insignificant interest rate risk and original maturities of three months or less, when purchased, are classified as cash equivalents. Cash equivalents are composed of money market funds. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances and believes credit risk to be minimal. Investment in Equity Securities The Company’s investments are in publicly held equity securities which have readily determinable fair values. These equity investments are recorded at fair value with unrealized holding gains and losses recorded in other income or expense in the consolidated statement of operations. Digital Assets Digital assets are included in current assets in the consolidated balance sheets due to the Company’s ability to sell Bitcoin in a highly liquid marketplace and the sale of Bitcoin to fund operating expenses to support operations. Bitcoin held are accounted for as intangible assets with indefinite useful lives. The proceeds from the sale of Bitcoin are included within operating or investing activities in the consolidated statements of cash flows depending on the length of time the Bitcoin is held. The Company adopted ASU 2023-08 effective January 1, 2024, which requires Bitcoin to be valued at fair value each reporting period with changes in fair value recorded in operating expenses in the consolidated statements of operations. The fair value of Bitcoin is measured using the period-end closing price from the Company’s principal market. When Bitcoin is sold, the gains and losses from such transactions are measured as the difference between the cash proceeds and the carrying basis of the Bitcoin as determined on a first in-first out (“FIFO”) basis and are recorded within the same line item, Change in Fair Value of Bitcoin, in the consolidated statements of operations. Prior to the adoption of ASU 2023-08, the Company accounted for its digital assets, Bitcoin, as indefinite-lived intangible assets. The digital assets were recorded at cost less impairment. An impairment analysis was performed daily to determine if the fair value of Bitcoin was lower than the carrying value for Bitcoin until the Bitcoin was disposed of or until the end of the reporting period, whichever came first. The fair value of digital assets was determined on a nonrecurring basis based on the lowest intraday quoted price as reported in the Company’s principal market. If the carrying value of the digital asset exceeded the fair value, an impairment loss had occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the fair value determined. Impairment losses were recognized in operating expenses in the consolidated statements of operations in the period in which the impairment is identified. The impaired digital assets were written down to their fair value at the time of impairment and this new cost basis would not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale or disposition. Digital assets awarded to the Company through its mining activities were included within operating activities on the consolidated statements of cash flows. The disposal of digital assets were included within operating activities in the consolidated statements of cash flows and any realized gains or losses from such sales are included in operating costs and expenses in the consolidated statements of operations. The Company accounted for its gains or losses in accordance with the FIFO method of accounting. Property and Equipment Property and equipment primarily consists of mining equipment and is stated at cost, including purchase price and all shipping and custom fees, and depreciated using the straight-line method over the estimated useful lives of the assets, generally five years. The Company reviews the carrying amounts of property and equipment when events or changes in circumstances indicate the assets may not be recoverable. If any such indication exists, the fair value of the asset is estimated in order to determine the extent of the impairment loss, if any. Intangible Assets For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Supplier agreements are amortized on a straight-line basis over their economic lives of 5 years as this method most closely reflects the pattern in which the economic benefits of the assets will be consumed. Impairment of Intangible Assets The Company performs regular reviews of intangible assets to determine if any event has occurred that may indicate that intangible assets with finite useful lives and other long-lived assets are potentially impaired. Triggering events for impairment reviews may be indicators such as adverse industry or economic trends, restructuring actions, lower projections of profitability, or a sustained decline in our market capitalization. Intangible assets are quantitatively assessed for impairment, if necessary, by comparing their estimated fair values to their carrying values. If the carrying value exceeds the fair value, the difference is recorded as an impairment. Warrant Liabilities Warrant liabilities are presented at fair value on the consolidated balance sheets. The warrant liabilities are subject to remeasurement at each balance sheet date and any change in fair value is recognized in interest income and other income, net, in the consolidated statements of operations. Revenue Recognition The Company accounts for revenue pursuant to ASU 2014-09, Revenue from Contracts with Customers and all the related amendments (“Topic 606”). Under Topic 606, an entity is required to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and contract consideration will be recognized on a “sell-in basis” or when control of the purchased goods or services transfer to the distributor. The Company is engaged with digital asset mining pool operators to provide computing power to the mining pools. In exchange for providing computing power, the Company is entitled to Full Pay Per Share (“FPPS”), which is a fractional share of the fixed Bitcoin award the mining pool operator receives, plus a fractional share of the transaction fees attached to that blockchain less net digital asset fees due to the mining pool operator over the measurement period, as applicable. The pay-outs received are based on the expected value from the block reward plus the transaction fee reward, regardless of whether the mining pool operator successfully records a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. The contracts are terminable at any time by either party without compensation and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator (which occurs daily at midnight Universal Time Coordinated (“UTC”)). The contract arises at the point that the Company provides computing power to the mining pool operator, which is beginning contract day at midnight UTC (contract inception), as customer consumption is in tandem with daily earnings of delivery of the computing power. According to the customer contract, daily earnings are calculated from midnight-to-midnight UTC time, and the payout is made one hour later at 1:00 AM UTC time. The Company satisfies its performance obligation over time with daily settlement in Bitcoin. The Company’s performance is completed as it transfers the computing power (hashrate computations) over-time (midnight to midnight) to the customer. The Company has full control of the mining equipment utilized in the mining pool and if the Company determines it will increase or decrease the processing power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the computing power provided to the customer will be adjusted. The transaction consideration the Company receives is noncash consideration in the form of Bitcoin, which the Company measures at fair value at contract inception. The noncash consideration is variable, since the amount of block reward earned depends on the amount of computing power contributed, the amount of transaction fees awarded and operator fees over the same period. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the noncash consideration on the same day that control is transferred, which is the same day as contract inception. Expenses associated with running the Bitcoin mining operations, such as hosting, operating supplies, utilities and monitoring services are recorded as cost of revenues. Comprehensive Income (Loss) Comprehensive income (loss) and its components encompass all changes in equity other than those arising from transactions with shareholders, including net loss and foreign currency translation adjustments, and is disclosed in a separate condensed consolidated statements of comprehensive loss. Share-based Compensation The Company accounts for share-based awards, and similar equity instruments, granted to employees, non-employee directors, and consultants in accordance with the authoritative guidance for share-based compensation. Share-based compensation award types may include stock options and restricted stock units (“RSUs”) and restricted stock awards (“RSAs”). Share-based compensation expense is recognized on a straight-lined basis over the requisite service period (usually the vesting period) except for options with graded vesting which is recognized pursuant to an accelerated method. Forfeitures are recognized as a reduction in share-based compensation expense as they occur. Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. Through the period ended December 28, 2023, the Company had two operating segments. On December 28, 2023, the Company sold its service and product segment. At March 31, 2024, the Company has one operating segment and one reporting segment. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, the Company believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the disclosure requirements related to the new standard. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. The Company is evaluating the impact of adoption of this standard on its consolidated financial statements and disclosures. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill - and Other - Crypto Assets (Subtopic 350-60): Accounting For and Disclosure of Crypto Assets (“ASU 2023-08”), which requires that an entity measure crypto assets at fair value in the statement of financial position each reporting period and recognize changes from remeasurement in net income. The amendments also require that an entity provide enhanced disclosures for both annual and interim reporting periods to provide investors with relevant information to analyze and assess the exposure and risk of significant individual crypto asset holdings. In addition, fair value measurement aligns the accounting required for holders of crypto assets with the accounting for entities that are subject to certain industry-specific guidance and eliminates the requirement to test those assets for impairment, thereby reducing the associated cost and complexity of applying the current guidance. The Company’s digital assets are within the scope of the new guidance and the transition requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value. Effective January 1, 2024, the Company early adopted ASU 2023-08 and recorded a $20,000 decrease to the opening balance of accumulated deficit and an increase to digital assets.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | Fair Value Measurements The authoritative guidance for fair value measurements establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The Company’s consolidated financial instruments include cash equivalents, investment in equity securities, accounts payable, accrued liabilities, and warrant liabilities. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying amount of cash equivalents, accounts payable and accrued liabilities are generally considered to be representative of their respective fair values because of the short-term nature of those instruments. The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis (in thousands):
The Company’s investments are in publicly held equity securities which have readily determinable fair values. For the three months ended March 31, 2024, the Company recognized an unrealized loss of $2.7 million, within other income (expense) in its consolidated statements of operations related to the fair value change of the investment in equity securities. The fair value of the warrant liabilities was measured using a Black Scholes valuation model with the following assumptions:
The following table presents the activities of warrant liabilities that are measured at fair value (in thousands):
Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis The Company's non-financial assets such as property and equipment and intangible assets are recorded at fair value when an impairment is recognized or at the time acquired in an asset acquisition or business combination measured using significant unobservable inputs (Level 3).
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Digital Assets |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Digital Assets | Digital Assets The following table presents the activities of Bitcoin (in thousands):
The following table presents Bitcoin holdings (in thousands except for number of Bitcoin):
For the three months ended March 31, 2024, the Company had $0.7 million in realized gains on the sale of Bitcoin. All additions of Bitcoin were the result of Bitcoin generated by the Company’s Bitcoin Mining operations. All dispositions of Bitcoin were the result of sales on the open market to fund Company operations. The Company's Bitcoin holdings are not subject to sale restrictions and do not serve as collateral for any agreements. As of March 31, 2024 and December 31, 2023, the Company held no other crypto currency.
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Notes Receivable |
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Mar. 31, 2024 | |
Receivables [Abstract] | |
Notes Receivable | Note Receivable Rainmaker Promissory Note In September 2020, the Company entered into a Senior Secured Convertible Promissory Note with Rainmaker Worldwide Inc. (the “Rainmaker Note”), pursuant to which the Company loaned Rainmaker Worldwide Inc. (“Rainmaker”) the principal amount of $3.1 million. The Rainmaker Note is secured as a registered lien under the Uniform Commercial Code and the Personal Property Security Act (Ontario) against the assets of Rainmaker and bears interest at the rate of 10.0% per annum. In March 2024, the Company and Rainmaker entered into Amendment No. 2 to the Rainmaker Note and the principal amount was revised to $4.2 million and the due date was extended to July 14, 2024, at which time all principal and accrued interest is due and payable. The Company has the right, at any time, to convert all or any portion of the then outstanding and unpaid Rainmaker Note and interest into at the conversion price as defined in the Rainmaker Note. All amounts related to the Rainmaker Note have been fully reserved in prior periods.
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Certain Balance Sheet Items |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Certain Balance Sheet Items | Certain Balance Sheet Items The following table summarizes other current assets (in thousands):
The December 31, 2023 digital mining hosting deposit was settled by shares of Core Scientific’s common stock issued to the Company, and is included in investment in equity securities at March 31, 2024. The following table summarizes property and equipment, net (in thousands):
Depreciation expense for property and equipment was $1.4 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, the Company sold no miners. For the three months ended March 31, 2023, the Company sold 2,066 miners that were included in mining equipment, for cash proceeds of $3.1 million. The following table summarizes other non-current assets (in thousands):
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Intangible Assets |
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Intangible Assets | Intangible Assets The following table summarizes intangible assets, net (in thousands):
Amortization expense for intangible assets was $0.4 million for both the three months ended March 31, 2024 and 2023. Estimated amortization expense for intangible assets is approximately $1.1 million for the remainder of 2024 and $1.5 million, $1.5 million, and $0.1 million in fiscal 2025, 2026, and 2027, respectively.
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Preferred Shares |
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Mar. 31, 2024 | |
Class of Stock Disclosures [Abstract] | |
Preferred Stock | Preferred Shares Series H Preferred Shares On October 1, 2021, the Company filed articles of amendment to create a series of preferred shares, being, an unlimited number of Series H Preferred Shares and to provide for the rights, privileges, restrictions and conditions attaching thereto. The Series H Preferred Shares are convertible provided (and only if and to the extent) that prior shareholder approval of the issuance of all Sphere 3D common shares issuable upon conversion of the Series H Preferred Shares has been obtained in accordance with the rules of the Nasdaq Stock Market, at any time from time to time, at the option of the holder thereof, into 142.857 Sphere 3D common shares for every Series H Preferred Share. Each holder of the Series H Preferred Shares, may, subject to prior shareholder approval, convert all or any part of the Series H Preferred Shares provided that after such conversion the common shares issuable, together with all the common shares held by the shareholder in the aggregate would not exceed 9.99% of the total number of outstanding common shares of the Company. Each Series H Preferred Share has a stated value of $1,000. The Series H Preferred Shares are non-voting and do not accrue dividends. These features include, in the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, deemed liquidation or any other distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs, the Series H Preferred Shares shall entitle each of the holders thereof to receive an amount equal to the Series H subscription price per Series H Preferred Share, as defined in the agreement, to be paid before any amount is paid or any assets of the Company are distributed to the holders of its common shares. In November 2022, the Company entered into the Modified Hertford Agreement. The Modified Hertford Agreement provides for certain resale restrictions applicable to the common shares that are issuable upon the conversion of the remaining Series H Preferred Shares during the two-year period ending on December 31, 2024, which are different from the restrictions contained in the Hertford Agreement. Commencing January 1, 2024 and terminating on December 31, 2024, holders of Series H Preferred Shares are permitted to (a) convert Series H Preferred Shares in an aggregate amount up to or equal to 10.0% of the aggregate number of Series H Preferred Shares outstanding on the first day of each such month and (b) sell the resulting number (and no greater number) of such converted common shares within such month. In August 2023, the Company entered into an Amended and Restated Agreement (the “Hertford Amendment”) with Hertford Advisors Ltd. and certain other parties listed in the Hertford Amendment (together, the “Hertford Group”), which amends and restates in its entirety the purchase agreement between the Company and Hertford Advisors Ltd. dated July 31, 2021, as modified by the amendment to such agreement dated November 7, 2022 (together, the “Original Hertford Agreement”). As an inducement to enter into the Hertford Amendment, the Company issued to Hertford 1,376 Series H Preferred Shares and 800,000 warrants with an aggregate fair value of $1.0 million. Pursuant to the Hertford Amendment, Hertford exchanged 14,980 Series H Preferred Shares for Series H Preferred Shares held by other persons (the “Exchanged Series H Preferred Shares”). The Hertford Group shall not be permitted to sell more than that number of common shares equal to 20% of the previous trading day's volume for common shares traded on the principal exchange upon which the common shares are listed and, for any subsequent trading day, the shares sold by the Hertford Group on the previous trading day shall be excluded when calculating the day's volume. Beginning on January 1, 2025, the Hertford Group shall not be prohibited, restrained or otherwise limited from converting its Series H Preferred Shares or selling any common shares converted from Series H Preferred Shares, subject to applicable laws, exchange requirements and the terms and conditions of the Series H Preferred Shares. In August 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company issued to two investors a total of 13,764 of the Company’s Series H Preferred Shares and a total of 1,966,293 common share purchase warrants (the “Warrants”), each of which entitled the holder to purchase one common share of the Company (the “Warrant Shares”). Pursuant to the terms of the Purchase Agreement, the Company received gross proceeds of $3.0 million. The Company issued a total of 1,377 Series H Preferred Shares and 196,629 warrants as a finder’s fee for the transaction with an aggregate fair value of $0.5 million. Pursuant to the terms of the Purchase Agreement, the Company will reserve for issuance the maximum aggregate number of common shares that are issuable upon exercise in full of the Warrants at any time. The Warrants issued in connection with the Hertford Amendment and the Purchase Agreement are exercisable beginning February 12, 2024 and February 23, 2024, respectively, at an initial exercise price of $2.75 per share and have a term of three years from the date of issuance. The exercise price of the Warrants are subject to adjustment for certain stock splits, stock combinations and dilutive share issuances. In accordance with the authoritative guidance for distinguishing liabilities from equity, the Company has determined that its Series H preferred shares carry certain redemption features beyond the control of the Company. Accordingly, the Series H Preferred Shares are presented as temporary equity. For the three months ended March 31, 2024 and 2023, the Company issued 2,422,710 and 748,427 common shares for the conversion of 16,959 and 5,239 Series H Preferred Shares, respectively.
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Share Capital |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Capital | Share Capital On April 17, 2023, the Company entered into a Securities Purchase Agreement (the “LDA Purchase Agreement”) as amended April 25, 2023, pursuant to which the Company issued to an investor, LDA Capital Limited (the “Investor”) a common share purchase warrant (the “LDA Warrant”) to purchase up to 455,927 common shares of the Company (the “LDA Warrant Shares”). The LDA Warrant is exercisable at an exercise price of $1.342 per share and expires three years from the date of issuance or earlier if the closing of a Fundamental Transaction occurs (defined as merger or consolidation, any sale of substantially all of the Company’s assets, any tender offer or exchange offer pursuant to which common shareholders can tender or exchange their shares for other securities, cash or property, as well as any reclassification of common shares into other securities, cash or property). The exercise price of the LDA Warrant is subject to adjustment for certain stock splits, stock combinations and dilutive share issuances. Pursuant to the terms of the LDA Purchase Agreement, the Company will reserve for issuance 200% of the maximum aggregate number of common shares as are issuable upon exercise in full of the LDA Warrant at any time. The LDA Warrant contains a contingent put option. In the event of a Fundamental Transaction, the Investor may, at the Investor’s option, require the Company to purchase the LDA Warrant for an amount of cash equal to the Black Scholes value of the remaining unexercised portion of the warrant on the date of consummation of such Fundamental Transaction. The Company has recorded the warrant as a liability and will adjust the warrant liability to fair value each reporting period until settled. Unlimited authorized shares of common shares at no par value are available to the Company. At March 31, 2024, the Company had the following outstanding warrants to purchase common shares:
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Equity Incentive Plan |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plan | Equity Incentive Plans Stock Options The fair value of option awards are estimated on the date of grant using the Black-Scholes option pricing model. Expected volatility was based on historical volatility of the Company’s common shares. The expected term of options granted was based on the simplified formula. The risk-free interest rate was based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The dividend yield assumption was based on the expectation of no future dividend payments. Option awards can be granted for a maximum term of up to 10 years. The assumptions used in the Black-Scholes model were as follows:
The following table summarizes option activity:
The weighted average grant date fair values of options granted for the three months ended March 31, 2024 was $2.05 per share. There were no options granted for the three months ended March 31, 2023. Restricted Stock Units The following table summarizes RSU activity:
The estimated fair value of RSUs was based on the market value of the Company’s common shares on the date of grant. RSUs typically vest over a period of to three years from the original date of grant. The total grant date fair value of RSUs vested for the three months ended March 31, 2024 and 2023 was approximately $0.7 million and $59,000, respectively. The fair value of RSUs vested for the three months ended March 31, 2024 and 2023 was approximately $0.7 million and $29,000, respectively. Share-Based Compensation Expense The Company recorded the following compensation expense related to its share-based compensation awards (in thousands):
Total unrecognized estimated compensation cost by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted):
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss per Share Basic net loss per share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding for the period. Common share purchase warrants, preferred shares issued and outstanding, and options and RSUs outstanding are considered common stock equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share were as follows:
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Service Agreements On October 18, 2023, the Company entered into a Hosting Agreement with Joshi Petroleum, LLC (the “Joshi Hosting Agreement”) for rack space, network services, electrical connections, routine facility maintenance, and technical support of certain of the Company’s mining equipment. The Joshi Hosting Agreement has an initial term of three years with subsequent one year renewal periods until either party provides written notice to the other party of its desire to avoid and given renewal term at least 30 days in advance of the conclusion of the prior initial term or renewal period. As required by the Joshi Hosting Agreement, the Company paid a deposit of $0.3 million representing the last two months of estimated service fees. For the three months ended March 31, 2024 and 2023, the Company incurred costs under the Joshi Hosting Agreement of $0.4 million and nil, respectively. On April 4, 2023, the Company entered into a Master Hosting Services Agreement with Rebel Mining Company, LLC (the “Rebel Hosting Agreement”) for rack space, network services, electrical connections, routine facility maintenance, and technical support of certain of the Company’s mining equipment. The Rebel Hosting Agreement has a term of three years with subsequent one year renewal periods. As required by the Rebel Hosting Agreement, the Company paid deposits of $2.6 million representing the last two months of estimated service fees. For the three months ended March 31, 2024 and 2023, the Company incurred costs under the Rebel Hosting Agreement of $1.5 million and nil, respectively. On February 8, 2023, the Company entered into a Hosting Agreement with Lancium FS 25, LLC (the “Lancium Hosting Agreement”) for rack space, network services, electrical connections, routine facility maintenance, and technical support of certain of the Company’s mining equipment. The Lancium Hosting Agreement has a term of two years with subsequent one year renewal periods. As required by the Lancium Hosting Agreement, the Company paid a deposit of $0.2 million representing a partial payment towards the last two months of estimated service fees. For the three months ended March 31, 2024 and 2023, the Company incurred costs under the Lancium Hosting Agreement of $0.8 million and nil, respectively. In December 2022, the Compute North master agreement was assigned to GC Data Center Granbury, LLC (the “GC Data Center MA”) and has a term of five years from such assignment date. Under the GC Data Center MA, the monthly service fee is payable based on the actual hashrate performance of the equipment per miner type per location as a percentage of the anticipated monthly hashrate per miner type. As required by the service agreement, the Company paid a deposit of $0.5 million representing the last two months of estimated service fees. In the first quarter of 2024, the GC Data Center MA was assumed by Marathon Digital Holdings and will be referred to as the Marathon MA going forward. The Company incurred costs under the Marathon MA of $1.1 million for the three months ended March 31, 2024. The Company incurred costs under the GC Data Center MA of $1.3 million for the three months ended March 31, 2023. Hosting Sub-License On October 5, 2021, the Company entered into a Sub-License and Delegation Agreement (“Hosting Sub-Lease”) by and between Gryphon Digital Mining, Inc. (“Gryphon”) and the Company, which assigned to the Company certain Master Services Agreement, dated as of September 12, 2021 (the “Core Scientific MSA”), by and between Core Scientific, Inc. (“Core Scientific”), and Gryphon and Master Services Agreement Order #2 (“Order 2”). The agreement allowed for approximately 230 MW of carbon neutral digital mining hosting capacity to be managed by Core Scientific as hosting partner. On January 16, 2024, the Company reached a settlement agreement (the “Settlement Agreement”) with Core Scientific, which was approved by a United States Bankruptcy Judge on January 16, 2024 as part of Core Scientific’s emergence from bankruptcy, for $10.0 million of Core Scientific’s equity. The Settlement Agreement includes access to potential additional funds for interest as well as an additional equity pool if the value of Core Scientific’s equity decreases below plan value in the 18 months after the date of the Settlement Agreement commensurate with the other unsecured creditors. On January 23, 2024, the Company received 2,050,982 shares of Core Scientific Inc. common stock trading under the Nasdaq symbol CORZ, which is included in investment in equity securities at March 31, 2024. Letters of credit During the ordinary course of business, the Company provides standby letters of credit to third parties as required for certain transactions initiated by the Company. As of March 31, 2024, the Company has no standby letters of credit outstanding. Litigation The Company is, from time to time, subject to claims and suits arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Paid expenses related to the defense of such claims are recorded by the Company as incurred and paid. On the basis of current information, the Company does not believe there is a reasonable possibility that a material loss, if any, will result from any claims, lawsuits and proceedings to which the Company is subject to either individually, or in the aggregate. On April 7, 2023, the Company filed a suit against Gryphon in the U.S. District Court for the Southern District of New York. The Company alleges, among other things, that Gryphon materially breached its obligations to the Company, both its contractual duties under the Gryphon Master Services Agreement (the “Gryphon MSA”) dated August 19, 2021, and its fiduciary duties, including as a custodian of the Company’s assets. On August 22, 2023, Gryphon asserted counterclaims alleging breach of contract, breach of the implied covenant of good faith and fair dealing, negligence in managing its computer systems, and defamation. On November 7, 2023, Gryphon voluntarily dismissed its defamation claim. Gryphon has amended its complaint several times, and on December 14, 2023, added a second breach of contract claim predicated on another alleged breach of the Gryphon MSA. On February 2, 2024, the Company filed a partial motion to dismiss the second breach of contract claim, the negligence claim, and the breach of the implied covenant claim for failure to state a claim. On February 16, 2024, the court so-ordered a stipulation agreed to by the parties dismissing the second breach of contract claim, the negligence claim, and the breach of the implied covenant claim with prejudice. The so-ordered stipulation expressly preserves the Company’s ability to seek the recovery of its costs and attorney’s fees incurred in connection with the dismissed claims. The Company disputes the allegations against it and intends to vigorously defend itself and to vigorously pursue its claims against Gryphon. At this preliminary stage, the Company believes that Gryphon’s claims lack merit; however, because this litigation is still at this early stage, the Company cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. On March 19, 2024, the Company filed a separate lawsuit against Gryphon in the U.S. District Court for the Southern District of New York. The Company alleged that Gryphon converted Sphere’s certain digital assets after the termination of the Gryphon MSA. After the Company filed the lawsuit, Gryphon returned proceeds stemming from the sale of Bitcoin. The Company subsequently dismissed the suit without prejudice.
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Information The Company had two operating segments, (1) Digital Mining and (2) Service and Product. The segment disclosures present the measure(s) used by the chief operating decision maker to decide how to allocate resources and for purposes of assessing such segments’ performance. On December 28, 2023, the Company sold its Service and Product segment. As of March 31, 2024, the Company has one operating segment and one reporting segment. The Digital Mining segment generates revenue from the digital currency the Company earns through its Bitcoin mining activities. The Company generates its digital mining revenue from two mining pool operators. The Company’s revenue from digital mining is generated in the United States. The Service and Product segment generated revenue from customer contracts for service and extended service contract and the sale of products related to the Company’s data storage product line. The Company’s revenue from service and product was generated in the United States. Summary information by segment (in thousands):
Service and product had the following customers that represented more than 10% of segment revenue.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent to March 31, 2024, the Company issued 423,570 common shares for the conversion of 2,965 Series H Preferred Shares.
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Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of the Company have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”), applied on a basis consistent for all periods. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 13, 2024. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been appropriately eliminated in consolidation.
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Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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Foreign Currency Translation | Foreign Currency Translation The financial statements of the Company’s foreign subsidiary, for which the functional currency is the local currency, is translated into U.S. dollars using the exchange rate at the consolidated balance sheet date for assets and liabilities and a weighted-average exchange rate during the year for revenue, expenses, gains and losses. Translation adjustments are recorded as accumulated other comprehensive income (loss) within shareholders’ equity. Gains or losses from foreign currency transactions are recognized in the condensed consolidated statements of operations.
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Cash Equivalents | Cash and Cash Equivalents Highly liquid investments with insignificant interest rate risk and original maturities of three months or less, when purchased, are classified as cash equivalents. Cash equivalents are composed of money market funds. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances and believes credit risk to be minimal.
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Investment in equity securities | Investment in Equity Securities The Company’s investments are in publicly held equity securities which have readily determinable fair values. These equity investments are recorded at fair value with unrealized holding gains and losses recorded in other income or expense in the consolidated statement of operations.
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Digital Assets | Digital Assets Digital assets are included in current assets in the consolidated balance sheets due to the Company’s ability to sell Bitcoin in a highly liquid marketplace and the sale of Bitcoin to fund operating expenses to support operations. Bitcoin held are accounted for as intangible assets with indefinite useful lives. The proceeds from the sale of Bitcoin are included within operating or investing activities in the consolidated statements of cash flows depending on the length of time the Bitcoin is held. The Company adopted ASU 2023-08 effective January 1, 2024, which requires Bitcoin to be valued at fair value each reporting period with changes in fair value recorded in operating expenses in the consolidated statements of operations. The fair value of Bitcoin is measured using the period-end closing price from the Company’s principal market. When Bitcoin is sold, the gains and losses from such transactions are measured as the difference between the cash proceeds and the carrying basis of the Bitcoin as determined on a first in-first out (“FIFO”) basis and are recorded within the same line item, Change in Fair Value of Bitcoin, in the consolidated statements of operations. Prior to the adoption of ASU 2023-08, the Company accounted for its digital assets, Bitcoin, as indefinite-lived intangible assets. The digital assets were recorded at cost less impairment. An impairment analysis was performed daily to determine if the fair value of Bitcoin was lower than the carrying value for Bitcoin until the Bitcoin was disposed of or until the end of the reporting period, whichever came first. The fair value of digital assets was determined on a nonrecurring basis based on the lowest intraday quoted price as reported in the Company’s principal market. If the carrying value of the digital asset exceeded the fair value, an impairment loss had occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the fair value determined. Impairment losses were recognized in operating expenses in the consolidated statements of operations in the period in which the impairment is identified. The impaired digital assets were written down to their fair value at the time of impairment and this new cost basis would not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale or disposition. Digital assets awarded to the Company through its mining activities were included within operating activities on the consolidated statements of cash flows. The disposal of digital assets were included within operating activities in the consolidated statements of cash flows and any realized gains or losses from such sales are included in operating costs and expenses in the consolidated statements of operations. The Company accounted for its gains or losses in accordance with the FIFO method of accounting.
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Property and Equipment | Property and Equipment Property and equipment primarily consists of mining equipment and is stated at cost, including purchase price and all shipping and custom fees, and depreciated using the straight-line method over the estimated useful lives of the assets, generally five years. The Company reviews the carrying amounts of property and equipment when events or changes in circumstances indicate the assets may not be recoverable. If any such indication exists, the fair value of the asset is estimated in order to determine the extent of the impairment loss, if any.
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Intangible Assets | Intangible Assets For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Supplier agreements are amortized on a straight-line basis over their economic lives of 5 years as this method most closely reflects the pattern in which the economic benefits of the assets will be consumed.
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Impairment of Intangible Assets | Impairment of Intangible Assets The Company performs regular reviews of intangible assets to determine if any event has occurred that may indicate that intangible assets with finite useful lives and other long-lived assets are potentially impaired. Triggering events for impairment reviews may be indicators such as adverse industry or economic trends, restructuring actions, lower projections of profitability, or a sustained decline in our market capitalization. Intangible assets are quantitatively assessed for impairment, if necessary, by comparing their estimated fair values to their carrying values. If the carrying value exceeds the fair value, the difference is recorded as an impairment.
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Warrant Liabilities | Warrant Liabilities Warrant liabilities are presented at fair value on the consolidated balance sheets. The warrant liabilities are subject to remeasurement at each balance sheet date and any change in fair value is recognized in interest income and other income, net, in the consolidated statements of operations.
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Revenue Recognition | Revenue Recognition The Company accounts for revenue pursuant to ASU 2014-09, Revenue from Contracts with Customers and all the related amendments (“Topic 606”). Under Topic 606, an entity is required to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and contract consideration will be recognized on a “sell-in basis” or when control of the purchased goods or services transfer to the distributor. The Company is engaged with digital asset mining pool operators to provide computing power to the mining pools. In exchange for providing computing power, the Company is entitled to Full Pay Per Share (“FPPS”), which is a fractional share of the fixed Bitcoin award the mining pool operator receives, plus a fractional share of the transaction fees attached to that blockchain less net digital asset fees due to the mining pool operator over the measurement period, as applicable. The pay-outs received are based on the expected value from the block reward plus the transaction fee reward, regardless of whether the mining pool operator successfully records a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. The contracts are terminable at any time by either party without compensation and the Company’s enforceable right to compensation only begins when the Company starts providing computing power to the mining pool operator (which occurs daily at midnight Universal Time Coordinated (“UTC”)). The contract arises at the point that the Company provides computing power to the mining pool operator, which is beginning contract day at midnight UTC (contract inception), as customer consumption is in tandem with daily earnings of delivery of the computing power. According to the customer contract, daily earnings are calculated from midnight-to-midnight UTC time, and the payout is made one hour later at 1:00 AM UTC time. The Company satisfies its performance obligation over time with daily settlement in Bitcoin. The Company’s performance is completed as it transfers the computing power (hashrate computations) over-time (midnight to midnight) to the customer. The Company has full control of the mining equipment utilized in the mining pool and if the Company determines it will increase or decrease the processing power of its machines and/or fleet (i.e., for repairs or when power costs are excessive) the computing power provided to the customer will be adjusted. The transaction consideration the Company receives is noncash consideration in the form of Bitcoin, which the Company measures at fair value at contract inception. The noncash consideration is variable, since the amount of block reward earned depends on the amount of computing power contributed, the amount of transaction fees awarded and operator fees over the same period. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the noncash consideration on the same day that control is transferred, which is the same day as contract inception. Expenses associated with running the Bitcoin mining operations, such as hosting, operating supplies, utilities and monitoring services are recorded as cost of revenues.
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Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) and its components encompass all changes in equity other than those arising from transactions with shareholders, including net loss and foreign currency translation adjustments, and is disclosed in a separate condensed consolidated statements of comprehensive loss.
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Share-based Compensation | Share-based Compensation The Company accounts for share-based awards, and similar equity instruments, granted to employees, non-employee directors, and consultants in accordance with the authoritative guidance for share-based compensation. Share-based compensation award types may include stock options and restricted stock units (“RSUs”) and restricted stock awards (“RSAs”). Share-based compensation expense is recognized on a straight-lined basis over the requisite service period (usually the vesting period) except for options with graded vesting which is recognized pursuant to an accelerated method. Forfeitures are recognized as a reduction in share-based compensation expense as they occur.
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Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. Through the period ended December 28, 2023, the Company had two operating segments. On December 28, 2023, the Company sold its service and product segment. At March 31, 2024, the Company has one operating segment and one reporting segment.
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Recently Issued and Adopted Accounting Pronouncements and Accounting Pronouncements Pending Adoption | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, the Company believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the disclosure requirements related to the new standard. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. The Company is evaluating the impact of adoption of this standard on its consolidated financial statements and disclosures. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill - and Other - Crypto Assets (Subtopic 350-60): Accounting For and Disclosure of Crypto Assets (“ASU 2023-08”), which requires that an entity measure crypto assets at fair value in the statement of financial position each reporting period and recognize changes from remeasurement in net income. The amendments also require that an entity provide enhanced disclosures for both annual and interim reporting periods to provide investors with relevant information to analyze and assess the exposure and risk of significant individual crypto asset holdings. In addition, fair value measurement aligns the accounting required for holders of crypto assets with the accounting for entities that are subject to certain industry-specific guidance and eliminates the requirement to test those assets for impairment, thereby reducing the associated cost and complexity of applying the current guidance. The Company’s digital assets are within the scope of the new guidance and the transition requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value. Effective January 1, 2024, the Company early adopted ASU 2023-08 and recorded a $20,000 decrease to the opening balance of accumulated deficit and an increase to digital assets.
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Fair Value Measures and Disclosures (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis (in thousands):
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Fair Value Measurement Inputs and Valuation Techniques | The fair value of the warrant liabilities was measured using a Black Scholes valuation model with the following assumptions:
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Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | The following table presents the activities of warrant liabilities that are measured at fair value (in thousands):
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Digital Assets (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Digital Assets | The following table presents the activities of Bitcoin (in thousands):
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Summary of Bitcoin Holdings | The following table presents Bitcoin holdings (in thousands except for number of Bitcoin):
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Certain Balance Sheet Items (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets | The following table summarizes other current assets (in thousands):
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Schedule of Property and Equipment | The following table summarizes property and equipment, net (in thousands):
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Schedule of Other Assets, Noncurrent | The following table summarizes other non-current assets (in thousands):
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The following table summarizes intangible assets, net (in thousands):
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Share Capital (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warrants | At March 31, 2024, the Company had the following outstanding warrants to purchase common shares:
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Equity Incentive Plan (Tables) |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions used in the Black-Scholes model were as follows:
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Share-based Payment Arrangement, Option, Activity | The following table summarizes option activity:
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Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | The following table summarizes RSU activity:
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Share-based Payment Arrangement, Expensed and Capitalized, Amount | The Company recorded the following compensation expense related to its share-based compensation awards (in thousands):
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Share-based Payment Arrangement, Nonvested Award, Cost | Total unrecognized estimated compensation cost by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted):
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Net Loss Per Share (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share were as follows:
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Summary information by segment (in thousands):
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Schedule of Revenue by Major Customers by Reporting Segments | Service and product had the following customers that represented more than 10% of segment revenue.
|
Organization and Business - Going Concern (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss | $ (4,477) | $ (3,489) |
Summary of Significant Accounting Policies - PPE (Details) |
Mar. 31, 2024 |
---|---|
Mining Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives of assets, mining equipment (in years) | 5 years |
Summary of Significant Accounting Policies - Intangible Assets (Details) |
Mar. 31, 2024 |
---|---|
Supplier agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life, finite-lived intangible assets | 5 years |
Summary of Significant Accounting Policies - Segments (Details) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2024
segment
|
Mar. 31, 2023 |
Mar. 31, 2023
segment
|
|
Accounting Policies [Abstract] | ||||
Number of operating Segments | 1 | 1 | 2 | 2 |
Number of Reportable Segments | 1 |
Summary of Significant Accounting Policies - Recently Issued and Adopted Accounting Pronouncements (Details) - USD ($) |
Mar. 31, 2024 |
Jan. 01, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Shareholders' equity | $ (27,476,000) | $ (26,523,000) | |||
Retained Earnings [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Shareholders' equity | $ 451,828,000 | 447,371,000 | $ 427,434,000 | $ 419,732,000 | |
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Shareholders' equity | $ 20,000 | $ (20,000) | $ 3,821,000 |
Fair Value Measurements (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Fair Value Disclosures [Abstract] | |
Loss on investment in equity securities | $ 2,700 |
Fair Value Measurements Valuation inputs (Details) |
Mar. 31, 2024
$ / shares
|
Dec. 31, 2023
$ / shares
|
---|---|---|
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Share price | $ 1.57 | $ 3.47 |
Measurement Input, Option Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 1.200 | 1.200 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 0.046 | 0.042 |
Fair Value Measurements - Fair Value of Warrant Liability (Details) - Warrant $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Warrant liability as of January 1, 2024 | $ 205 |
Change in fair value | (129) |
Warrant liability as of March 31, 2024 | $ 76 |
Digital Assets - Activities of Digital Asstes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Indefinite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | $ 986 | |
Revenue recognized from Bitcoin mined | 6,946 | $ 3,026 |
Proceeds from sale of Bitcoin | (8,055) | |
Bitcoin issued for services | (538) | |
Change in fair value of Bitcoin | 768 | 0 |
Ending balance | 127 | |
Bitcoin | ||
Indefinite-lived Intangible Assets [Roll Forward] | ||
Revenue recognized from Bitcoin mined | 6,946 | $ 2,524 |
Ending balance | 123 | |
Cumulative Effect, Period of Adoption, Adjustment | ||
Indefinite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | $ 20 |
Digital Assets - Bitcoin (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
bitcoin
|
Dec. 31, 2023
USD ($)
|
---|---|---|
Indefinite-lived Intangible Assets [Line Items] | ||
Number of Bitcoin held | bitcoin | 1.8 | |
Carrying basis of Bitcoin | $ 127 | $ 986 |
Bitcoin | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying basis of Bitcoin | $ 123 |
Digital Assets - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Realized Gain On Exchange Of Bitcoin | $ 700,000 | |
Other digital assets | 0 | 0 |
Notes Receivable - Rainmaker Note Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Sep. 14, 2020 |
|
Receivables [Abstract] | ||
Promissory note receivable | $ 4,200 | $ 3,100 |
Stated interest rate | 10.00% | |
Note receivable due date | Jul. 14, 2024 |
Certain Balance Sheet Items - Other current assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits Assets, Current | $ 0 | $ 10,000 |
Prepaid digital hosting services | 1,137 | 980 |
Prepaid services | 289 | 193 |
Prepaid insurance | 351 | 575 |
Other | 204 | 190 |
Other Assets, Current | $ 1,981 | $ 11,938 |
Certain Balance Sheet Items - Property and Equipment (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 22,717 | $ 24,166 |
Mining Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Mining equipment | 30,122 | 30,122 |
Accumulated depreciation | $ 7,405 | $ 5,956 |
Certain Balance Sheet Items - Narrative (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
miner
|
|
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 1,400 | $ 600 |
Number of miners sold | 0 | 2,066 |
Proceeds from sale of miners | $ 0 | $ 3,101 |
Mining Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Proceeds from sale of miners | $ 3,100 |
Certain Balance Sheet Items - Other long term assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid digital hosting services | $ 3,601 | $ 3,402 |
Other | 4 | 4 |
Other Assets | $ 3,605 | $ 3,406 |
Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 37,628 | $ 37,628 |
Finite-lived intangible assets, accumulated amortization | (33,418) | (33,047) |
Total finite-lived intangible assets, net | 4,210 | 4,581 |
Supplier agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 37,525 | 37,525 |
Finite-lived intangible assets, accumulated amortization | (33,315) | (32,944) |
Capitalized development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 103 | 103 |
Finite-lived intangible assets, accumulated amortization | $ (103) | $ (103) |
Intangible Assets - Amortization (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 400,000 | $ 400,000 |
Amortization expense, remainder of fiscal year | 1,100,000 | |
Amortization expense 2025 | 1,500,000 | |
Amortization expense 2026 | 1,500,000 | |
Amortization expense 2027 | $ 100,000 |
Share Capital LDA Warrant (Details) - LDA Warrant |
Apr. 17, 2023
$ / shares
shares
|
---|---|
Class of Warrant or Right [Line Items] | |
Number of shares called by warrants (in shares) | shares | 455,927 |
Warrants exercise price (in USD per share) | $ / shares | $ 1.342 |
Warrant term | 3 years |
Percent of maximum aggregate common shares issuable reserved for issuance | 200.00% |
Share Capital (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Equity [Abstract] | ||
Common Stock, Shares Authorized, Unlimited [Fixed List] | Unlimited | |
Common shares, no par value | $ 0 | $ 0 |
Equity Incentive Plan option misc (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-Based Payment Arrangement [Abstract] | ||
Option awards maximum term | 10 years | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 2.05 | |
Granted (in shares) | 246,150 | 0 |
Equity Incentive Plan Option Assumptions (Details) - Stock Options |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 124.30% | 0.00% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 3 years 6 months | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 4.09% | 0.00% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Equity Incentive Plan - Summary of Restricted Stock Activity (Details) - Restricted Stock Units (RSUs) |
3 Months Ended |
---|---|
Mar. 31, 2024
$ / shares
shares
| |
Stock Options | |
Outstanding - beginning of period (in shares) | shares | 58,929 |
Grants (in shares) | shares | 1,249,942 |
Forfeited (in shares) | shares | 0 |
Outstanding - end of period (in shares) | shares | 1,308,871 |
Vested and unreleased (in shares) | shares | 385,000 |
Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, outstanding - beginning of period (in USD per share) | $ / shares | $ 9.51 |
Weighted average grant date fair value, granted (in USD per share) | $ / shares | 1.94 |
Weighted average grant date fair value, vested (in USD per share) | $ / shares | 1.88 |
Weighted average grant date fair value, forfeited (in USD per share) | $ / shares | 0 |
Weighted average grant date fair value, outstanding - end of period (in USD per share) | $ / shares | $ 2.28 |
Equity Incentive Plan-RSU details (Details) - Restricted Stock Units (RSUs) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Grant Date Fair Value | $ 700,000 | $ 59,000 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 700,000 | $ 29,000 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Units and Stock Options Vesting Period | 1 year | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Units and Stock Options Vesting Period | 3 years |
Equity Incentive Plan - Share-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 1,086 | $ 485 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 0 | 16 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 1,086 | $ 469 |
Equity Incentive Plan - Unrecognized Compensation Cost (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 1,949,000 |
Remaining Weighted-Average Recognition Period (years) | 1 year 6 months |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 480,000 |
Remaining Weighted-Average Recognition Period (years) | 9 months 18 days |
Net Loss Per Share (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Common share purchase warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 5,842,354 | 7,823,000 |
Preferred shares issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 3,793,710 | 2,821,791 |
Options and awards outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1,950,262 | 916,450 |
Commitments and Contingencies - Digital Mining Hosting Sub-License (Details) - Core Scientific - USD ($) $ in Thousands |
Jan. 23, 2024 |
Jan. 16, 2024 |
---|---|---|
Other Commitments [Line Items] | ||
Litigation Settlement, Amount Awarded from Other Party | $ 10,000 | |
Litigation Settlement, Period For Equity Value Decrease | 18 months | |
Litigation Settlement, Amount Awarded from Other Party, Shares | 2,050,982 |
Commitments and Contingencies - Letters of Credit (Details) |
Mar. 31, 2024 |
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Number of letters of credit outstanding | 0 |
Commitments and Contingencies Litigation (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Recovery of Bitcoin | $ 1,500 |
Segment Reporting - Summary Information by Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Segment Reporting Information [Line Items] | ||
Revenue | $ 6,946 | $ 3,026 |
Gross Profit | 763 | |
Loss from Operations | (1,866) | (3,740) |
Capital expenditures | 1,561 | |
Depreciation, Depletion and Amortization | $ 1,821 | 1,025 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | |
Gross Profit | 0 | |
Loss from Operations | (3,392) | |
Capital expenditures | 0 | |
Depreciation, Depletion and Amortization | 26 | |
Digital Mining | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 2,524 | |
Gross Profit | 559 | |
Loss from Operations | 109 | |
Capital expenditures | 1,561 | |
Depreciation, Depletion and Amortization | 985 | |
Service and product [Member] | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 502 | |
Gross Profit | 204 | |
Loss from Operations | (457) | |
Capital expenditures | 0 | |
Depreciation, Depletion and Amortization | $ 14 |
Segment Reporting - Service and Product Segment (Details) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2024
segment
|
Mar. 31, 2023 |
Mar. 31, 2023
segment
|
|
Segment Reporting Information [Line Items] | ||||
Number of operating Segments | 1 | 1 | 2 | 2 |
Number of mining pool operators | 2 | 2 | ||
Number of Reportable Segments | 1 | |||
Revenue from Contract with Customer Benchmark | Customer A | Customer Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 0.00% | 23.70% | ||
Revenue from Contract with Customer Benchmark | Customer B | Customer Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 0.00% | 14.90% | ||
Revenue from Contract with Customer Benchmark | Customer C | Customer Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 0.00% | 10.90% |
Subsequent Events (Details) - shares |
May 03, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|---|---|
Subsequent Event [Line Items] | ||||
Common shares, issued (in shares) | 17,796,326 | 15,373,616 | ||
Series H Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Common shares, issued (in shares) | 2,422,710 | 748,427 | ||
Preferred stock shares converted (in shares) | 16,959 | 5,239 | ||
Subsequent Event | Series H Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Common shares, issued (in shares) | 423,570 | |||
Preferred stock shares converted (in shares) | 2,965 |
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