Sphere 3D (ANY) Issues April 2024 Update

Sphere 3D Corp. (NASDAQ: ANY) is providing a strategic and operational update for April 2024.

Key Highlights

• Partnering with Sunnyside Digital for fleet upgrade and refresh
• 29.9 Bitcoin were mined in April 2024
• Month-end operating hash rate was 0.9 EH/s; this reduction was primarily due to machines in transit at month end as well as operational issues at two hosting sites

Strategic Update

We are proactively strategizing for our future growth with a two-pronged approach to our strategic business plan:

• First, we plan to focus on organic growth through a fleet refresh and the addition of more exahash. We believe that a pivotal step in this direction is our recent partnership with Sunnyside Digital. We expect Sunnyside Digital to assist us in divesting a significant portion of our older-generation fleet, while acquiring next-gen machines to bolster efficiency. We expect that the increase in the price of bitcoin over the past few months will allow us to take machines offline and replace them with later generation machines starting in the second quarter of 2024 and continuing in a phased approach over the remainder of the year.

• Second, we plan to grow through strategic M&A. We are actively pursuing M&A opportunities with an eye toward enhancing shareholder value. Our criteria prioritizes targets with secure vertical integration, which we expect to result in long-term low mining costs. These potential strategic transactions are part of our broader M&A strategy of securing robust long-term infrastructure solutions, with a focus on vertical integration opportunities.

Furthermore, we intend to continue to pursue cost reduction opportunities, both in operations and SG&A.

CEO Comments

"We are dedicated to advancing long-term solutions that drive shareholder value. By prioritizing the reduction of third-party exposure and upgrading our fleet, alongside targeted M&A pursuits emphasizing partners with vertical integration capabilities, we believe we are positioning our company for optimal outcomes," explained Patricia Trompeter, CEO of Sphere 3D. She added, "Maintaining proper financial management has been our focus, to increase flexibility during challenging periods. Our debt-free status has afforded us the freedom to focus on innovative solutions that we believe will position our company for sustained success and productivity. As we refresh our fleet over the coming months, we may experience fluctuations in our bitcoin production, for example, as we progress with our fleet upgrade and refresh."

Production

Over the upcoming months, as we execute our planned strategic steps, we expect to experience volatility in our Bitcoin production. We expect that this will lead to greater gross profits as more productive machines use less power and generate more bitcoin.

"The significant downtime that we have experienced with our hosting partners in Springfield, MO and Granbury, TX further strengthens our focus on finding a merger partner that enables us to vertically integrate, to enable us to control our own uptime and costs."

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