UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
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Securities registered pursuant to Section 12(b) of the Act: | ||||||||
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
[Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 14, 2022, Greenidge Generation Holdings Inc. issued a press release setting forth Greenidge Generation Holdings Inc.’s financial results for the quarter ended September 30, 2022. A copy of Greenidge Generation Holding Inc.’s press release is furnished herewith as Exhibit 99.1 and is hereby incorporated by reference in this Item 2.02.
The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
Item 9.01 - Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 14th day of November, 2022.
| Greenidge Generation Holdings Inc. | |||||
By: | /s/ Robert Loughran | ||||
Name: | Robert Loughran | ||||
Title: | Chief Financial Officer | ||||
Exhibit 99.1
Greenidge Generation Announces Financial and Operating Results for Third Quarter 2022 and Provides Operational Update for October 2022
Third Quarter 2022
•Revenue of $29.4 million for the third quarter of 2022
•Produced approximately 866 bitcoin during the third quarter
•Power plant uptime of 100.0% in third quarter, 99.9% YTD through September 30, 2022, and 98.3% LTM, including downtime for scheduled maintenance outages
•Mining capacity of approximately 2.4 EH/s from approximately 24,500 miners in service at September 30, 2022
•$39 million in cash and fair value of cryptocurrency holdings at September 30, 2022
•GAAP net loss of $(23.1) million for the quarter
•Adjusted EBITDA loss of $(2.3) million for the quarter
•LTM Adjusted EBITDA of $28.4 million
October 2022 Operational Update
•Produced approximately 269 bitcoin in October 2022
•Approximately 2.5 EH/s of mining capacity from approximately 24,500 miners in service as of October 31, 2022
•Power plant uptime of 97.8%, as a scheduled annual maintenance period began at end of October
Adjusted net (loss) income, Adjusted EBITDA, Adjusted EBITDA margin and last twelve months (“LTM”) Adjusted EBITDA are non-GAAP measures. See the tables attached to this press release for a reconciliation from GAAP to non-GAAP measures and "Use of Non-GAAP Information" below for more details.
Fairfield, Conn. – November 14, 2022 – Greenidge Generation Holdings Inc. (NASDAQ: GREE) (“Greenidge”), a vertically integrated cryptocurrency datacenter and power generation company, today announced financial and operating results for the third quarter of 2022 and provided an operational update for the month ended October 31, 2022.
“Our third quarter results demonstrated our consistently strong operational performance, as we increased our bitcoin production by 39% over the second quarter’s production due to our focus on miner uptime, coupled with the reliability of controlling our own power afforded by our vertical integration,” said Dave Anderson, Chief Executive Officer of Greenidge. “The prolonged crypto winter that has impacted our industry has caused us to reassess our expansion plans while we work to improve our liquidity.”
Third Quarter 2022 Financial Results
| $ in thousands, except Adjusted EBITDA margin | Q3 2022 | Q3 2021 | Variance | ||||||||||||||
| Total Revenue | $ | 29,359 | $ | 35,754 | (18) | % | |||||||||||
| Cryptocurrency datacenter revenue | $ | 18,272 | $ | 31,156 | (41) | % | |||||||||||
| Power and capacity revenue | $ | 3,613 | $ | 3,077 | 17 | % | |||||||||||
| Adjusted EBITDA (loss) | $ | (2,288) | $ | 21,177 | N/A | ||||||||||||
| Adjusted EBITDA margin | (7.8) | % | 59.2 | % | |||||||||||||
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Greenidge’s revenue for the third quarter was $29.4 million, down 18% compared to the prior year period. Cryptocurrency datacenter revenue for the third quarter was $18.3 million, down 41% compared to the prior year period, and Power and capacity revenue for the third quarter was $3.6 million, up 17% compared to the prior year period. Greenidge’s Support.com subsidiary, which was acquired in September 2021, generated approximately $7.5 million in third quarter revenue, up 391% as about half of one month’s operations of Support.com was included in Greenidge’s third quarter 2021 results. Support.com revenue is included in Greenidge’s Services and other revenue line item on the income statement.
Greenidge produced approximately 866 bitcoin during the third quarter of 2022, compared to 729 bitcoin in the third quarter of 2021, and had approximately 24,500 miners in service with approximately 2.4 EH/s of combined capacity as of September 30, 2022.
Net loss was $(23.1) million for the third quarter as compared to $(7.9) million in the prior year period. Greenidge’s third quarter 2022 results included $0.8 million of losses on sales of assets, $0.2 million of merger and other costs and $0.2 million of expansion costs. Adjusted net loss was $(22.0) million, compared to Adjusted net income of $12.2 million in the prior year period.
Adjusted EBITDA (loss) for the third quarter was $(2.3) million compared to the prior year period of $21.2 million.
Greenidge ended the quarter with approximately $39 million of cash, restricted cash and fair market value of cryptocurrency holdings, of which, less than $1 million was cryptocurrency holdings.
October 2022 Operational Update
During the month of October 2022, Greenidge produced approximately 269 bitcoin. As of October 31, 2022, Greenidge had approximately 2.5 EH/s of mining capacity from approximately 24,500 miners in service.
Power Plant Performance
Greenidge’s mining operations in Dresden, NY are powered by the power plant located at the facility. The plant is periodically offline for scheduled maintenance outages and for unscheduled outages. In the third quarter of 2022, the plant was offline for zero (0) hours, representing an uptime, defined as running hours divided by total hours in the period, of 100.0%. For the nine months ended September 30, 2022, the plant was offline for six (6) hours, representing an uptime of 99.9%. Offline hours include hours the plant is offline for scheduled maintenance. The plant’s annual maintenance period began near the end of October, resulting in the plant being offline for approximately two days in October, representing an uptime of 97.8% for the month of October and 99.2% for the ten months ended October 31, 2022. There is additional planned time offline during the remainder of the fourth quarter 2022 of approximately 13 days to complete the annual maintenance.
Development Plan Update
Greenidge previously disclosed that it expected to have 3.6 EH/s of mining capacity by the first quarter of 2023. In an effort to preserve its liquidity, Greenidge is currently reassessing its expansion plans. As previously disclosed, during the second quarter of 2022, the price of bitcoin decreased approximately 57% and the cost of natural gas increased approximately 53%. Given the lack of meaningful improvement in the price of bitcoin and the cost of natural gas coupled with Greenidge’s existing financial liabilities, there is uncertainty regarding Greenidge’s financial condition and substantial doubt about its ability to continue as a going concern for a reasonable period of time.
During the third quarter of 2022, Greenidge continued to reduce its inventory of older, less efficient mining equipment in order to free up mining capacity for newer more, efficient miners in its order book. Greenidge expects this trend to continue through the end of 2022, and may also consider other assets sales to further enhance its liquidity position.
About Greenidge Generation Holdings Inc.
Greenidge Generation Holdings Inc. (NASDAQ: GREE) is a vertically integrated cryptocurrency datacenter and power generation company.
Use of Non-GAAP Information
To provide investors and others with additional information regarding the financial results of Greenidge (the "Company"), the Company has disclosed in this press release certain non-GAAP operating performance measures of Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA and Adjusted net (loss) income. Adjusted EBITDA is defined as earnings before interest, taxes and depreciation and amortization, which is then adjusted for stock-based compensation and other special items determined by management, including, but not limited to costs associated with the merger with Support.com, costs of becoming a public company (which included the costs of a corporate reorganization from an LLC, public registration of shares and associated costs), business expansion costs, impairments of goodwill and long-lived assets, gains or losses from the sales of long-lived assets and remeasurement of environmental liabilities. Adjusted EBITDA margin is the percentage of Adjusted EBITDA of revenue. LTM Adjusted EBITDA is Adjusted EBITDA over the last twelve-month period. Adjusted net (loss) income is net (loss) income adjusted for the after-tax impacts of special items determined by management, including but not limited to costs associated with the merger with Support.com, costs of
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becoming a public company (which included the costs of a corporate reorganization from an LLC, public registration of shares and associated costs), business expansion costs, impairments of goodwill and long-lived assets, gains or losses from the sale of long-lived assets and remeasurement of environmental liabilities and tax charges for the recognition of valuation allowances on deferred tax assets. These non-GAAP financial measures are a supplement to and not a substitute for or superior to, the Company’s results presented in accordance with U.S. GAAP. The non-GAAP financial measures presented by the Company may be different from non-GAAP financial measures presented by other companies. Specifically, the Company believes the non-GAAP information provides useful measures to investors regarding the Company’s financial performance by excluding certain costs and expenses that the Company believes are not indicative of its core operating results. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for results or guidance prepared and presented in accordance with U.S. GAAP. Greenidge compensates for these limitations by relying primarily on its GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate Greenidge's business.
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. Greenidge compensates for these limitations by relying primarily on its GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate Greenidge's business.
Forward-Looking Statements
This press release includes certain statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws. These forward-looking statements involve uncertainties that could significantly affect Greenidge’s financial or operating results. These forward-looking statements may be identified by terms such as “anticipate,” “believe,” “continue,” “foresee,” “expect,” “intend,” “plan,” “may,” “will,” “would,” “could,” and “should,” and the negative of these terms or other similar expressions. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Forward-looking statements in this press release include, among other things, statements regarding the business plan, business strategy and operations of Greenidge in the future. In addition, all statements that address operating performance and future performance, events or developments that are expected or anticipated to occur in the future, such as statements concerning (i) future liquidity, (ii) potential asset sales, and (iii) hours to complete annual maintenance, are forward looking statements. Forward-looking statements are subject to a number of risks, uncertainties and assumptions. Matters and factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include but are not limited to the matters and factors described in Part I, Item 1A. “Risk Factors” of Greenidge’s Annual Report on Form 10-K for the year ended December 31, 2021, in Part II, Item 1A. “Risk Factors” of Greenidge’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, and its other filings with the Securities and Exchange Commission, as well as statements about or relating to or otherwise affected by the completion of management’s final review of the financial results and Greenidge’s other closing procedures. Consequently, all of the forward-looking statements made in this press release are qualified by the information contained under this caption. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements in this press release. You should not put undue reliance on forward-looking statements. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, the actual results, performance, or achievements of Greenidge could differ materially from the results expressed in, or implied by, any forward-looking statements. All forward-looking statements speak only as of the date of this press release and Greenidge does not assume any duty to update or revise any forward-looking statements included in this press release, whether as a result of new information, the occurrence of future events, uncertainties or otherwise, after the date of this press release.
For further information, please contact:
Investor Relations
investorrelations@greenidge.com
Media Inquiries
media@greenidge.com
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| GREENIDGE GENERATION HOLDINGS INC. AND SUBSIDIARIES | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||
| Amounts denoted in 000s (except per share data) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| REVENUE: | |||||||||||
| Cryptocurrency datacenter | $ | 18,272 | $ | 31,156 | |||||||
| Power and capacity | 3,613 | 3,077 | |||||||||
| Services and other | 7,474 | 1,521 | |||||||||
| Total revenue | 29,359 | 35,754 | |||||||||
| OPERATING COSTS AND EXPENSES: | |||||||||||
| Cost of revenue - cryptocurrency datacenter (exclusive of depreciation and amortization) | 14,675 | 5,974 | |||||||||
| Cost of revenue - power and capacity (exclusive of depreciation and amortization) | 3,760 | 2,831 | |||||||||
| Cost of revenue - services and other (exclusive of depreciation and amortization) | 3,660 | 854 | |||||||||
| Selling, general and administrative | 10,240 | 5,446 | |||||||||
| Merger and other costs | 242 | 29,847 | |||||||||
| Depreciation and amortization | 13,835 | 2,667 | |||||||||
| Impairment of long-lived assets | — | — | |||||||||
| Remeasurement of environmental liability | — | — | |||||||||
| Total operating costs and expenses | 46,412 | 47,619 | |||||||||
| Loss from operations | (17,053) | (11,865) | |||||||||
| OTHER INCOME (EXPENSE), NET: | |||||||||||
| Interest expense, net | (5,430) | (1,009) | |||||||||
| Interest expense - related party | — | — | |||||||||
| Gain on sale of digital assets | — | 18 | |||||||||
| Loss on sale of assets | (759) | — | |||||||||
| Other income (loss), net | 144 | (29) | |||||||||
| Total other expense, net | (6,045) | (1,020) | |||||||||
| Loss before income taxes | (23,098) | (12,885) | |||||||||
| Provision for income taxes | 79 | (4,989) | |||||||||
| Net loss | $ | (23,177) | $ | (7,896) | |||||||
| (Loss) earnings per share: | |||||||||||
| Basic | $ | (0.55) | $ | (0.28) | |||||||
| Diluted | $ | (0.55) | $ | (0.22) | |||||||
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| GREENIDGE GENERATION HOLDINGS INC. AND SUBSIDIARIES | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| Amounts denoted in $000s | |||||||||||
| September 30, 2022 (Unaudited) | December 31, 2021 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | 28,013 | $ | 82,599 | |||||||
| Restricted cash | 10,500 | — | |||||||||
| Short term investments | — | 496 | |||||||||
| Digital assets | 337 | 476 | |||||||||
| Accounts receivable | 4,704 | 5,524 | |||||||||
| Prepaid expenses | 9,694 | 9,146 | |||||||||
| Emissions and carbon offset credits | 1,259 | 2,361 | |||||||||
| Total current assets | 54,507 | 100,602 | |||||||||
| LONG-TERM ASSETS: | |||||||||||
| Property and equipment, net | 246,071 | 217,091 | |||||||||
| Right-of-use assets | 222 | 1,472 | |||||||||
| Intangible assets, net | 2,841 | 3,537 | |||||||||
| Goodwill | 3,062 | 3,062 | |||||||||
| Deferred tax assets | 29 | 15,058 | |||||||||
| Other long-term assets | 615 | 445 | |||||||||
| Total assets | $ | 307,347 | $ | 341,267 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | 4,064 | $ | 5,923 | |||||||
| Accrued emissions expense | 5,226 | 2,634 | |||||||||
| Accrued expenses | 15,560 | 10,375 | |||||||||
| Income taxes payable | 185 | 2,481 | |||||||||
| Long-term debt, current portion | 73,218 | 19,577 | |||||||||
| Lease obligations, current portion | 112 | 736 | |||||||||
| Total current liabilities | 98,365 | 41,726 | |||||||||
| LONG-TERM LIABILITIES: | |||||||||||
| Long-term debt, net of current portion and deferred financing fees | 96,515 | 75,251 | |||||||||
| Lease obligations, net of current portion | 137 | 193 | |||||||||
| Environmental liability | 22,415 | 11,306 | |||||||||
| Other long-term liabilities | 358 | 368 | |||||||||
| Total liabilities | 217,790 | 128,844 | |||||||||
| STOCKHOLDERS' EQUITY | 89,557 | 212,423 | |||||||||
| Total liabilities and stockholders' equity | $ | 307,347 | $ | 341,267 | |||||||
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| GREENIDGE GENERATION HOLDINGS INC. AND SUBSIDIARIES | |||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
| Amounts denoted in 000s | |||||||||||
| Reconciliation of Net loss to Adjusted EBITDA (loss) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net loss | $ | (23,177) | $ | (7,896) | |||||||
| Provision for income taxes | 79 | (4,989) | |||||||||
| Interest expense, net | 5,430 | 1,009 | |||||||||
| Depreciation and amortization | 13,835 | 2,667 | |||||||||
| EBITDA (loss) | $ | (3,833) | $ | (9,209) | |||||||
| Stock-based compensation | 361 | 411 | |||||||||
| Merger and other costs | 242 | 29,847 | |||||||||
| Expansion costs | 183 | 128 | |||||||||
| Loss on sale of assets | 759 | — | |||||||||
| Adjusted EBITDA (loss) | $ | (2,288) | $ | 21,177 | |||||||
| Adjusted EBITDA percentage of revenue | (7.8) | % | 59.2 | % | |||||||
| Reconciliation of Net income (loss) to Adjusted Net income (loss) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net loss | $ | (23,177) | $ | (7,896) | |||||||
| Merger and other costs, after tax | 242 | 19,969 | |||||||||
| Expansion costs, after tax | 183 | 93 | |||||||||
| Loss on sale of assets, after tax | 759 | — | |||||||||
| Adjusted net (loss) income | $ | (21,993) | $ | 12,166 | |||||||
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| Reconciliation of Net (loss) income to LTM Adjusted EBITDA | |||||||||||||||||||||||
| Fiscal Year | Nine Months Ended: | Last 12 Months | |||||||||||||||||||||
| 2021 | September 30, 2021 | September 30, 2022 | September 30, 2022 | ||||||||||||||||||||
| Net loss | $ | (44,480) | $ | (3,099) | $ | (131,488) | $ | (172,869) | |||||||||||||||
| Provision for income taxes | 408 | (2,860) | 15,200 | 18,468 | |||||||||||||||||||
| Interest expense, net | 3,692 | 1,399 | 15,693 | 17,986 | |||||||||||||||||||
| Depreciation and amortization | 8,855 | 5,531 | 22,680 | 26,004 | |||||||||||||||||||
| EBITDA (loss) | $ | (31,525) | $ | 971 | $ | (77,915) | $ | (110,411) | |||||||||||||||
| Stock-based compensation | 3,770 | 1,474 | 1,029 | 3,325 | |||||||||||||||||||
| Merger and other costs | 32,272 | 31,095 | 940 | 2,117 | |||||||||||||||||||
| Expansion costs | 2,362 | 128 | 2,375 | 4,609 | |||||||||||||||||||
| Loss on sale of assets | — | — | 130 | 130 | |||||||||||||||||||
| Goodwill impairment | 42,307 | — | — | 42,307 | |||||||||||||||||||
| Impairment of long-lived assets | — | — | 71,500 | 71,500 | |||||||||||||||||||
| Remeasurement of environmental liabilities | 3,688 | — | 11,109 | 14,797 | |||||||||||||||||||
| Adjusted EBITDA (loss) | $ | 52,874 | $ | 33,668 | $ | 9,168 | $ | 28,374 | |||||||||||||||
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