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United States securities and exchange commission logo
June 7, 2021
Jeffrey E. Kirt
Chief Executive Officer
Greenidge Generation Holdings Inc.
590 Plant Road
Dresden, NY 14441
Re: Greenidge
Generation Holdings Inc.
Registration
Statement on Form S-4
Filed May 4, 2021
File No. 333-255741
Dear Mr. Kirt:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed May 4, 2021
Cover Page
1. Please disclose the
percentage of equity and voting control that each of Support s and
Greenidge s
shareholders will hold after the offering. Disclose that Greenidge will be a
controlled company
and will be exempt from certain Nasdaq corporate governance
requirements. Identify
the Greenidge shareholder who, with its affiliates, will be the
Controlling
Stockholder, and disclose the percentage of equity and voting control it will
hold following the
merger.
Material U.S. Federal Income Tax Consequences of the Merger, page 19
2. You disclose that you
intend for the merger to qualify as a reorganization within the
meaning of Section
368(a) of the Internal Revenue Code. To the extent you believe that
Jeffrey E. Kirt
FirstName LastNameJeffrey E. Kirt
Greenidge Generation Holdings Inc.
Comapany
June 7, 2021NameGreenidge Generation Holdings Inc.
June 7,
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FirstName LastName
the merger qualifies as a reorganization within Section 368(a) of the
Internal Revenue
Code, you must obtain a legal opinion supporting such a conclusion.
Otherwise, revise
your disclosure here and elsewhere to state that it is uncertain
whether the merger will
qualify as a tax-free reorganization and describe the potential
consequences to
shareholders, including a summary of the tax consequences if the
merger fails to qualify
as a 368(a) reorganization. Refer to Item 601(b)(8) of Regulation S-K.
Unaudited Pro Forma Condensed Combined Financial Information
Pro Forma Condensed Combined Statement of Operations, page 27
3. Please tell us why you have not included a pro forma adjustment to
reflect the income tax
impact of Greenidge's conversion from an LLC to a Corporation or
revise as necessary.
4. Please revise to include an adjustment to reflect the transaction
costs in your income
statement. Refer to Article 11-02(a)(6)(i)(B) of Regulation S-X.
Notes to the Unaudited Pro Forma Condensed Combined Financial Information
Note 4 - Pro forma adjustments, page 29
5. Please revise footnote (c) to disclose the method used to determine
the adjustment and the
period over which the intangible assets are assumed to be amortized.
Refer to Article 11-
02(a)(8) of Regulation S-X.
6. Note (g) indicates Greenidge's Series A preferred stock automatically
converts to Series B
common stock upon effectiveness of a registration statement
registering these shares for
resale. Further, the pro forma presentation assumes a 1:1 conversion
of Greenidge's
Series A preferred stock into Series B common stock. Please tell us
how you determined
this adjustment is appropriate. In this regard, we note the cover page
of your registration
statement indicates that only Class A shares are being registered.
Refer to Article 11-
02(a)(6) of Regulation S-X.
7. Please revise footnote (g) to disclose the number of Class A common
shares issued to
Support.com's shareholders separately from the shares to be issued to
the Investor as a
consulting fee for transactions contemplated by the Merger Agreement.
Also, clarify
whether the value of the Investor Fee shares is included in adjustment
(h) and if not,
please explain why not.
Background of the Merger, page 66
8. Please clarify when Support and the Investor began their relationship,
which party reached
out to the other, and why Support retained the Investor to help
consider potential
transactions or investments in Support. Discuss what alternatives were
considered by
Support.
9. Please include a section that discusses the Investor s role in the
merger. Discuss the
Investor s transactions with and compensation by each party as well
as any other benefits
to the Investor in connection with the transactions and consummation
of the merger.
Jeffrey E. Kirt
Greenidge Generation Holdings Inc.
June 7, 2021
Page 3
Disclose any relationship or affiliation between the Investor and its
affiliates and Support
or Greenidge and their affiliates prior to the Investor introducing
the parties.
10. Please address what discussions the parties had over the extent to
which Support s
business would continue operating and be supported once acquired by
Greenidge.
11. Please discuss how the parties determined a $1.1 billion valuation of
Greenidge.
Reasons for the Merger, page 73
12. Under Greenidge Projections on page 89, you disclose that the
projections provided in
the table were prepared based on mining economics then in effect
and applicable to
Greenidge as of March 4, 2021, which mining economics changed
subsequent thereto and
as such do not represent projections as of the date of this proxy
statement/prospectus.
Please discuss how the mining economics have changed to date and how
these changes
have impacted how the Support board considers the conclusions of the
fairness opinion
from BTIG and the value of the consideration that Support shareholders
will receive in the
merger.
Opinion of Support's Financial Advisor, page 77
13. Please disclose where Support and Greenidge fell in the range of
values for each analysis.
Certain Prospective Financial Information
Support Projections, page 88
14. Please disclose any material assumptions underlying the Support
projections. For
example, explain why the Support projections show a reversal in its
trend of declining
revenues and gross profit.
Greenidge Projections, page 89
15. Please disclose any material assumptions underlying the Greenidge
projections. For
example, disclose the material assumptions about mining economics and
Greenidge s
power generation facilities.
Corporate History and Structure, page 120
16. Please disclose how long the Greenidge power plant had been idle and
why.
Information about Greenidge,E.page
FirstName LastNameJeffrey Kirt120
Comapany
17. You NameGreenidge Generation
highlight Greenidge s lowerHoldings Inc.for bitcoin mining.
Please provide
energy costs
June 7,historical,
2021 Pagequantified
3 disclosure of your costs to generate power and to
mine bitcoin.
FirstName LastName
Jeffrey E. Kirt
FirstName LastNameJeffrey E. Kirt
Greenidge Generation Holdings Inc.
Comapany
June 7, 2021NameGreenidge Generation Holdings Inc.
June 7,
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Bitcoin Revenues, page 122
18. Please disclose whether Greenidge has a policy in place regarding when
and how it will
exchange bitcoin for fiat currency to fund operations or growth and
through what
exchange. To the extent it has an agreement with a third-party
exchange, please disclose
the material terms and file the agreement as an exhibit, and provide a
discussion of the
fees incurred in converting bitcoin to fiat currency. Discuss whether
your bitcoin will be
held in digital wallets, exchanges or hardware wallet, and the
security precautions you will
take to keep the mined bitcoin secure.
Bitcoin Mining Operations, page 125
19. Please disclose the models of the 6,900 ASIC miners you deployed in
2020.
20. We note that Greenidge has entered into agreements to acquire a
substantial number of
miners. Please revise to identify the principal suppliers and the
material terms of the
agreements, including termination provisions and any minimum delivery
requirements. In
addition, disclose whether the miners you are acquiring will be
pre-owned or newly
manufactured. Disclose whether the ASIC miners have already been
manufactured or if
the current supply side constraints might impact the ability of your
suppliers to fulfill the
agreements.
Future Expansion Plans, page 126
21. You disclose that you intend to achieve at least 500 MW of mining
capacity by 2025.
Please discuss the assumptions underlying this statement, including
the number of miners
and facilities required to achieve this goal.
Employees, page 129
22. Please disclose the number of employees involved in operating the
plant and the number
involved in bitcoin mining operations.
Management's Discussion and Analysis of Financial Condition and Results of
Operations for
Greenidge
Overview, page 134
23. You disclose that your behind-the-meter power generation capability
provides a stable,
cost-effective source of power for bitcoin mining activities. Please
revise to provide a
discussion of the contract you maintain with your major power vendor
or any other
material natural gas vendors. Discuss whether your contracts are
subject to renegotiation,
counterparty risk or other cost volatility that may impact your
results of operations. If so,
please revise to discuss the factors that would impact your cost of
power generation, any
uncertainties in sourcing or pricing that may result and the actions
you take to mitigate
such uncertainties. Refer to Item 303 of Regulation S-K and Section
III of SEC Release
No. 33-8350.
Jeffrey E. Kirt
FirstName LastNameJeffrey E. Kirt
Greenidge Generation Holdings Inc.
Comapany
June 7, 2021NameGreenidge Generation Holdings Inc.
June 7,
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FirstName LastName
24. You disclose the number of miners, hash rate, power capacity, mining
operations energy
consumption and megawatt mining capacity for various periods. Please
revise to present
these metrics for all periods included in your filing. Tell us whether
management
uses cost per MWh and cost to mine per bitcoin in managing your
business and if so,
please disclose such metrics for all periods presented. Also, tell us
what metrics
management uses to monitor or evaluate your revenue or costs related
to power
generation. Lastly, please disclose the following:
A clear definition of the metrics and how they are calculated;
A statement indicating the reasons why the metric provides useful
information to
investors;
A statement indicating how management uses the metric in managing
or monitoring
the performance of the business; and
Any estimates or assumptions underlying the metric or its
calculation.
Refer to Item 303 of Regulation S-K and SEC Release No. 33-10751.
25. Please disclose whether the additional purchase commitments for
bitcoin miners entered
into during the first quarter of 2021 are firm commitments or
cancellable. Also, revise
your liquidity section to discuss this known demand on your future
liquidity. Refer to
Item 303 of Regulation S-K.
Results of Operations, page 135
26. To better illustrate the relationship between price and volume for
your power and capacity
revenue and related cost of revenue, please disclose the number of
megawatts sold, price
realized per megawatt sold or the percentage changes in each. Also,
expand your
discussion of why COVID had an impact on your price realized per
megawatt hour. If
COVID is expected to continue to impact your power and capacity
revenue,
please disclose the approximate length of time you expect that impact
to continue. Refer
to CF Disclosure Guidance: Topic No. 9, Item 303 of Regulation S-K and
SEC Release
No. 33-8350.
27. Please disclose the number of bitcoin that Greenidge received for its
mining activities in
2020. Discuss material trends in the rate of bitcoin mined and the
amount of transaction
fees received for supporting the bitcoin network and how these factors
impacted
cryptocurrency mining revenues. Also discuss material trends in the
transaction fees paid
to pooling operators and the price of electricity and how they
impacted the cost of
cryptocurrency mining. Discuss whether you expect these trends to
continue.
Non-GAAP Financial Measures, page 137
28. We note your adjustment for business development costs. Please provide
more
information about the nature of the items included in this adjustment
and tell us how you
concluded that these were not normal, recurring, cash operating
expenses necessary to
operate your business. Refer to Question 100.01 of the Non-GAAP
Compliance and
Disclosure Interpretations.
Jeffrey E. Kirt
Greenidge Generation Holdings Inc.
June 7, 2021
Page 6
Liquidity, page 139
29. We note that the majority of your revenue is generated through the
receipt of non-cash
compensation in the form of bitcoin. Please revise to disclose whether
your business
strategy is to hold any digital assets received for investment
purposes or whether your
strategy is to convert them into cash after receipt. Please discuss
the average period
between receipt of the non-cash consideration and the subsequent
conversion to cash and
discuss any risks to your liquidity caused by volatility in bitcoin
pricing.
Critical Accounting Policies and Estimates
Digital Assets, page 141
30. Your disclosure indicates that when events or circumstance indicate
that digital assets may
be impaired, they are tested for impairment; however, your risk factor
disclosure on page
46 indicates that these assets are reviewed for impairment annually.
Please revise to
describe the events or circumstances that would trigger an impairment
assessment more
frequently than annually. Clarify how you consider the daily spot
price obtained from a
prominent exchange for purposes of recording revenue in your
consideration of whether
events or circumstances indicate that your digital assets may be
impaired. If you do not
consider such declines to be an indicator that your digital assets may
be impaired, discuss
any factors you consider when making that conclusion. Refer to ASC
350-30-18B and
18C.
Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Support, page 159
31. To provide context regarding why Greenidge appears as a beneficial
owner in the
beneficial ownership table of Support, indicate in footnote 8 that
Greenidge has an
irrevocable proxy to vote the shares owned by the director and
executive officers of
Support and the Investor under the Voting Agreement. Also disclose
Greenidge s
irrevocable proxy for the shares subject to the Voting Agreement where
you discuss the
agreement in the forepart of the document.
32. Disclose the natural persons who have sole or shared dispositive or
voting control over the
Support shares beneficially owned by the Investor, 210 Capital, LLC.
Description of Securities, page 161
33. Please summarize the transfers of Class B common stock that trigger
automatic
conversion and the transfers that are considered Permitted Transfers.
FirstName LastNameJeffrey E. Kirt
34. We note you incorporate by reference the historical and future reports
of Support. Please
Comapany NameGreenidge
tell us Generation
how Support meets Holdings Inc.
the requirements for use of Form S-3 as
set forth in General
Instruction
June 7, 2021 Page 6C.1 of Form S-4.
FirstName LastName
Jeffrey E. Kirt
FirstName LastNameJeffrey E. Kirt
Greenidge Generation Holdings Inc.
Comapany
June 7, 2021NameGreenidge Generation Holdings Inc.
June 7,
Page 7 2021 Page 7
FirstName LastName
Consolidated Financial Statements
Report of Independent Public Accounting Firm, page F-2
35. Please revise to include a report of the independent registered public
accounting firm
indicating that their audit was conducted in accordance with standards
of the PCAOB
rather than only the auditing standards of the PCAOB or explain. Refer
to the guidance in
paragraph .09 of AS3101.
Consolidated Statements of Operations, page F-4
36. Your disclosure on page F-15 indicates that you incurred depreciation
expense of $1,633
related to blockchain infrastructure for the year ended December 31,
2020, which is
included in cryptocurrency mining cost of revenue in the accompanying
consolidated
statements of operation. Please tell us whether you allocate
depreciation related to plant
infrastructure and related assets to the cost of cryptocurrency mining
revenue. In this
regard, it appears you use those assets in the generation of power,
some of which you
utilize in your bitcoin mining operations. Similarly, please tell us
whether cryptocurrency
cost of revenue includes any costs to convert natural gas to
electricity for the portion of
capacity that is used in your bitcoin mining operations.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-13
37. We note that you record digital asset transaction fees retained by the
mining pool
operator as a component of cost of revenue. Please tell us your basis
for recording these
fees as cost of revenue and not a reduction of the transaction price.
Provide the specific
guidance in ASC 606 your relied upon and include a detailed analysis
of how you applied
such guidance. In your response, tell us the amount of such fees
included in cost of
revenue for each period presented.
Note 3. Property and Equipment, page F-15
38. Please provide us with a breakdown of the assets included in
blockchain infrastructure
along with the related estimated useful life for each asset. Please
revise your disclosures
as necessary to describe the significant components of such asset.
Also, ensure that your
response specifically addresses miners or clarify how miners are
reflected in your
financial statements.
Exhibits
39. Please file all material contracts as exhibits pursuant to Item
601(b)(10) of Regulation S-K
such as:
Greenidge's agreement with Empire Pipeline Inc.;
Greenidge's agreements to purchase miner equipment; and
Greenidge's equipment finance agreements to finance miner
equipment purchases.
Jeffrey E. Kirt
Greenidge Generation Holdings Inc.
June 7, 2021
Page 8
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Rebekah Lindsey, Senior Staff Accountant, at
202-551-3303 or
Kathleen Collins, Accounting Branch Chief, at 202-551-3499 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Kathleen Krebs,
Special Counsel, at 202-551-3350 or Jan Woo, Legal Branch Chief, at
202-551-3453 with any
other questions.
Sincerely,
FirstName LastNameJeffrey E. Kirt
Division of
Corporation Finance
Comapany NameGreenidge Generation Holdings Inc.
Office of Technology
June 7, 2021 Page 8
cc: Christopher M. Zochowski, Esq.
FirstName LastName