DarkHorse Technologies Inc 6-K, filed Aug 12, 2022

DarkHorse Technologies Inc. (DRK)

6-K 2022-08-12 For: 2022-06-30

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Added on April 11, 2026

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DarkHorse Technologies Inc filed this 6-K on August 12, 2022.

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						Sphere 3D Corp.

By:						/s/ Patricia Trompeter
Name:						Patricia Trompeter
Title:						Chief Executive Officer


99.1			Management’s Discussion and Analysis of Financial Condition and Results of Operations - Three and Six Months Ended June 30, 2022

99.2			Condensed Consolidated Financial Statements (unaudited) of Sphere 3D Corp. - Three and Six Months Ended June 30, 2022 and 2021

99.3			Rule 13a-14(a)/15d-14(a) Certification of principal executive officer of Sphere 3D Corp.

99.4			Rule 13a-14(a)/15d-14(a) Certification of principal financial officer of Sphere 3D Corp.

101.INS			Inline 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

101.SCH			Inline XBRL Taxonomy Extension Schema Document

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document


	Six Months Ended June 30,
	2022		2021
Net cash used in operating activities	$	(24,530)	$	(3,894)
Net cash used in investing activities	$	(19,101)	$	(60)
Net cash provided by financing activities	$	—	$	8,078


	June 30, 2022		December 31, 2021
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	10,724	$	54,355
Digital assets	962		—
Accounts receivable, net	193		181

Notes receivable	339		1,859
Other current assets	37,405		22,027
Total current assets	49,623		78,422
Notes receivable	3,665		11,988
Investments	7,520		19,949
Mining equipment, net	8,484		—
Intangible assets, net	51,898		63,017
Other assets	109,295		102,548
Total assets	$	230,485	$	275,924
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	950	$	1,252
Accrued liabilities	2,339		3,250
Accrued payroll and employee compensation	622		199
Deferred revenue	132		210
Other current liabilities	49		297
Total current liabilities	4,092		5,208
Deferred revenue, long-term	75		58
Other non-current liabilities	1,031		1,032
Total liabilities	5,198		6,298
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred shares, no par value, unlimited shares authorized, 96,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021	42,350		42,350
Common shares, no par value; unlimited shares authorized, 66,505,769 and 63,566,403 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	455,259		444,265
Accumulated other comprehensive loss	(1,793)		(1,794)
Accumulated deficit	(270,529)		(215,195)
Total shareholders’ equity	225,287		269,626
Total liabilities and shareholders’ equity	$	230,485	$	275,924


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

Revenues:	(Unaudited)				(Unaudited)
Digital mining revenue	$	1,211	$	—	$	1,958	$	—
Service and product revenue	710		894		1,335		1,834
Total revenues	1,921		894		3,293		1,834

Operating costs and expenses:
Cost of digital mining revenue	619		—		974		—
Cost of service and product revenue	341		406		700		821


Sales and marketing	264		407		495		711
Research and development	139		269		253		506
General and administrative	7,788		3,197		16,757		4,302
Depreciation and amortization	7,485		157		13,849		311
Impairment of digital assets	679		—		770		—
Total operating expenses	17,315		4,436		33,798		6,651
Loss from operations	(15,394)		(3,542)		(30,505)		(4,817)
Other income (expense):
Forgiveness of note receivable	(13,145)		—		(13,145)		—
Impairment of investments	(12,429)		—		(12,429)		—
Interest expense, related party	—		—		—		(496)
Interest expense	—		(6)		—		(19)
Interest and other income, net	281		667		745		79


Net loss	(40,687)		(2,881)		(55,334)		(5,253)
Dividends on preferred shares	—		169		—		362
Net loss available to common shareholders	$	(40,687)	$	(3,050)	$	(55,334)	$	(5,615)

Net loss per share:
Net loss per share basic and diluted	$	(0.62)	$	(0.19)	$	(0.85)	$	(0.44)
Shares used in computing net loss per share:
Basic and diluted	66,148,147		15,990,564		65,001,147		12,724,287


	Preferred Shares			Common Shares			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount		Shares	Amount
Balance at January 1, 2022	96,000	$	42,350	63,566,403	$	444,265	$	(1,794)	$	(215,195)	$	269,626
Issuance of common shares and warrants for the settlement of liabilities	—	—		950,000	1,957		—		—		1,957
Share-based compensation	—	—		—	117		—		—		117
Other comprehensive income	—	—		—	—		9		—		9
Net loss	—	—		—	—		—		(14,647)		(14,647)
Balance at March 31, 2022	96,000	42,350		64,516,403	446,339		(1,785)		(229,842)		257,062
Issuance of common shares for the purchase of intangible assets	—	—		1,350,000	1,721		—		—		1,721
Issuance of common shares for vested restricted stock units, net of shares withheld for income taxes	—	—		639,366	—		—		—		—
Share-based compensation	—	—		—	7,199		—		—		7,199
Other comprehensive loss	—	—		—	—		(8)		—		(8)
Net loss	—	—		—	—		—		(40,687)		(40,687)
Balance at June 30, 2022	96,000	$	42,350	66,505,769	$	455,259	$	(1,793)	$	(270,529)	$	225,287

See accompanying notes to condensed consolidated financial statements.


Sphere 3D Corp.
Condensed Consolidated Statements of Shareholders’ Equity (continued)
(in thousands of U.S. dollars, except shares)
(Unaudited)
	Preferred Shares			Common Shares			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount		Shares	Amount
Balance at January 1, 2021	9,355,778	$	11,769	7,867,186	$	192,406	$	(1,791)	$	(197,375)	$	5,009
Issuance of common shares for conversion of preferred shares	(2,495,300)	(2,482)		2,532,798	2,482		—		—		—
Issuance of common shares	—	—		235,000	597		—		—		597
Issuance of common shares for the settlement of liabilities	—	—		351,880	921		—		—		921
Exercise of warrants	—	—		743,820	478		—		—		478
Other comprehensive income	—	—		—	—		4		—		4
Net loss	—	—		—	—		—		(2,372)		(2,372)
Preferred dividends	—	—		—	—		—		(193)		(193)
Balance at March 31, 2021	6,860,478	9,287		11,730,684	196,884		(1,787)		(199,940)		4,444
Issuance of common shares for conversion of preferred shares	(2,399)	(2,160)		2,108,620	2,160		—		—		—
Issuance of common shares	—	—		6,695,000	7,642		—		—		7,642
Issuance of common shares for conversion of convertible debt	—	—		468,225	799		—		—		799
Issuance of common shares for settlement of liabilities	—	—		770,000	1,135		—		—		1,135
Exercise of warrants	—	—		747,000	687		—		—		687
Issuance of common shares for vested restricted stock units	—	—		62,500	—		—		—		—
Share-based compensation	—	—		—	247		—		—		247
Other comprehensive income	—	—		—	—		8		—		8
Net loss	—	—		—	—		—		(2,881)		(2,881)
Preferred dividends	—	—		—	—		—		(169)		(169)
Balance at June 30, 2021	6,858,079	$	7,127	22,582,029	$	209,554	$	(1,779)	$	(202,990)	$	11,912


Sphere 3D Corp.
Condensed Consolidated Statements of Cash Flows (continued)
(in thousands of U.S. dollars)

	Six Months Ended June 30,
	2022		2021
	(Unaudited)
Supplemental disclosures of cash flow information:
Cash paid for interest	$	—	$	32
Supplemental disclosures of non-cash investing and financing activities:
Reclassification from deposit for mining equipment to mining equipment	$	9,137	$	—
Issuance of common shares and warrants for settlement of liabilities	$	1,957	$	2,056
Issuance of common shares for purchase of intangible assets	$	1,721	$	—
Issuance of common shares for conversion of convertible debt	$	—	$	799
Issuance of common shares for exercise of warrants applied to settlement of liabilities	$	—	$	92


Balance at January 1, 2022	$	—
Addition of digital assets	1,958
Digital assets issued for services	(229)
Realized gain on sale of digital assets	3
Impairment loss	(770)
Balance at June 30, 2022	$	962


	June 30, 2022		December 31, 2021
Prepaid digital hosting services	$	34,910	$	20,043
Prepaid services	1,164		1,477
Prepaid insurance	612		406

Other	719		101
	$	37,405	$	22,027


	June 30, 2022		December 31, 2021
Deposit for mining equipment	$	109,101	$	102,238
Prepaid insurance and services	184		251

Other	10		59
	$	109,295	$	102,548


	June 30, 2022		December 31, 2021
Supplier agreements	$	68,147	$	68,147
Developed technology	10,344		10,344
Channel partner relationships	730		730
Customer relationships	380		380
Capitalized development costs	103		103
	79,704		79,704
Accumulated amortization:
Supplier agreements	(18,417)		(5,289)
Developed technology	(10,344)		(10,344)
Channel partner relationships	(659)		(598)
Customer relationships	(360)		(353)
Capitalized development costs	(103)		(103)
	(29,883)		(16,687)
Total finite-lived intangible assets, net	49,821		63,017
Carbon credits held for future use	2,077		—
Total intangible assets, net	$	51,898	$	63,017


Date issued	Contractual life (years)	Exercise price	Number outstanding	Expiration
August 2017	5	$42.00	37,500	August 11, 2022
August 2017	5	$42.00	11,876	August 16, 2022
August 2017	5	$42.00	25,625	August 22, 2022
April 2018	5	$5.60	111,563	April 17, 2023
March 2020	3	$0.60	31,000	March 23, 2023
July 2021	3	$4.00	2,000,000	December 22, 2024
August 2021	3	$6.50	2,595,488	August 25, 2024
August 2021	3	$7.50	2,595,488	August 25, 2024
September 2021	5	$9.50	11,299,999	September 8, 2026
October 2021	3	$6.00	850,000	October 1, 2024
February 2022	5	$4.00	100,000	February 7, 2027
February 2022	5	$5.00	100,000	February 7, 2027
February 2022	5	$6.00	100,000	February 7, 2027
			19,858,539


	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Options outstanding — January 1, 2022	675	$	565.76
Granted	1,456,696	$	1.37
Exercised	—	$	—
Forfeited	—	$	—
Options outstanding — June 30, 2022	1,457,371	$	1.63	5.9	$	—
Vested and expected to vest — June 30, 2022	1,457,371	$	1.63	5.9	$	—
Exercisable — June 30, 2022	215,675	$	3.25	5.8	$	—


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding — January 1, 2022	60,000	$	3.46
Granted	3,862,943	$	2.10
Vested	(915,000)	$	2.22
Forfeited	—	$	—
Outstanding — June 30, 2022	3,007,943	$	2.09


	Three Months Ended June 30,			Six Months Ended June 30,
	2022		2021	2022		2021
Expected volatility	124	%	n/a	124	%	n/a
Expected term (in years)	4.2		n/a	4.2		n/a
Risk-free interest rate	2.71-3.25%		n/a	2.71-3.25%		n/a
Dividend yield	—		—	—		—


	June 30, 2022
	Unrecognized Expense		Remaining Weighted-Average Recognition Period (years)
RSUs	$	1,372	1.5
Stock options	$	1,233	1.6


	Deferred Revenue
Liability at January 1, 2022	$	214
Revenue recognized during the period	(119)
Change in liability for warranties issued during the period	84
Liability at June 30, 2022	$	179
Current liability	104
Non-current liability	75
Liability at June 30, 2022	$	179


1.			I have reviewed the interim financial statements and interim MD&A (together, the “report”) of Sphere 3D Corp.;


	June 30, 2022		December 31, 2021
Customer A	23.1	%	26.3	%
Customer B	15.4	%	25.5	%
Customer C	16.3	%	—	%
Customer D	13.7	%	19.6	%
Customer E	—	%	10.6	%


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 issuer as of, and for, the periods presented in this report;


4.			The company’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 company 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 issuer, 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 issuer’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 issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and


			(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 issuer’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 issuer’s internal control over financial reporting.


/s/ Kurt L. Kalbfleisch
Kurt L. Kalbfleisch
Senior Vice-President and
Chief Financial Officer