SEC Filing | Greenidge Generation Holdings Inc.

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gree-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________

FORM 10-Q

________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to _____________________

Commission File Number: 001-40808

________________________________

Greenidge Generation Holdings Inc.

(Exact Name of Registrant as Specified in its Charter)

________________________________


Delaware						86-1746728
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

135 Rennell Drive, 3rd Floor Fairfield, CT						06890
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (203) 718-5960

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value	GREE	The Nasdaq Global Select Market
8.50% Senior Notes due 2026	GREEL	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Securities registered pursuant to Section 12(g) of the Act: None

As of August 10, 2023, the registrant had 4,384,017 shares of Class A common stock, $0.0001 par value per share, outstanding and 2,852,639 shares of Class B common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	53
Item 4.	Mine Safety Disclosures	53
Item 5.	Other Information	53
Item 6.	Exhibits	53
Exhibit Index		54
Signatures		55

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes certain statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 our 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 document include, among other things, statements regarding our business plan, business strategy and operations 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, including statements relating to creating value for stockholders, 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 Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC") on March 31, 2023 and in this Quarterly Report on Form 10-Q, as well as those described from time to time in our future reports filed with the SEC, which should be reviewed carefully. Please consider Greenidge's forward-looking statements in light of those risks.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Greenidge Generation Holdings Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except share data)


	June 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	15,363	$	15,217


Digital assets	—		348
Accounts receivable, net of allowance for doubtful accounts of $0 at June 30, 2023 and December 31, 2022	177		2,696
Prepaid expenses and other assets	3,577		6,266
Emissions and carbon offset credits	1,597		1,260
Income tax receivable	857		798
Current assets held for sale	1,074		6,473
Total current assets	22,645		33,058
LONG-TERM ASSETS:
Property and equipment, net	70,816		130,417
Other long-term assets	836		292


Total assets	94,297		163,767
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	9,391		9,608
Accrued emissions expense	6,090		6,052
Accrued expenses	7,450		11,327
Short-term environmental liability	1,700		600

Long-term debt, current portion	3,536		67,161

Current liabilities held for sale	1,475		3,974
Total current liabilities	29,642		98,722
LONG-TERM LIABILITIES:
Long-term debt, net of current portion and deferred financing fees	86,687		84,585
Environmental liabilities	26,174		27,400
Other long-term liabilities	3,562		107
Total liabilities	146,065		210,814
COMMITMENTS AND CONTINGENCIES (NOTE 10)
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.0001, 20,000,000 shares authorized, none outstanding	-		-
Common stock, par value $0.0001, 500,000,000 shares authorized, 7,236,614 and $4,625,278 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	1		—
Additional paid-in capital	307,238		293,774
Cumulative translation adjustment	(330)		(357)
Accumulated deficit	(358,677)		(340,464)
Total stockholders' equity	(51,768)		(47,047)
Total liabilities and stockholders' equity	$	94,297	$	163,767

The accompanying notes are an integral part of these condensed consolidated financial statements.

Greenidge Generation Holdings Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
REVENUE:
Datacenter hosting revenue	$	9,660	$	—	$	16,604	$	—
Cryptocurrency mining revenue	3,980		20,067		10,431		43,299
Power and capacity	1,070		2,859		2,832		8,782
Total revenue	14,710		22,926		29,867		52,081
OPERATING COSTS AND EXPENSES:
Cost of revenue - datacenter hosting (exclusive of depreciation)	6,727		—		11,398		—
Cost of revenue - cryptocurrency mining (exclusive of depreciation)	2,933		11,664		6,181		20,121
Cost of revenue - power and capacity (exclusive of depreciation)	1,481		3,172		3,297		7,195
Selling, general and administrative	7,049		8,291		16,062		20,100
Depreciation	3,165		4,537		6,985		8,190
Impairment of long-lived assets	—		71,500		—		71,500
Gain on sale of assets	(8)		(629)		(1,752)		(629)
Remeasurement of environmental liability	—		11,109		—		11,109
Total operating costs and expenses	21,347		109,644		42,171		137,586
Operating loss	(6,637)		(86,718)		(12,304)		(85,505)
OTHER EXPENSE, NET:
Interest expense, net	(3,112)		(6,910)		(6,685)		(10,262)
Gain (loss) on sale of digital assets	—		(10)		398		(15)
Other income (expense), net	(4)		22		(4)		38
Total other expense, net	(3,116)		(6,898)		(6,291)		(10,239)
Loss from continuing operations before income taxes	(9,753)		(93,616)		(18,595)		(95,744)
Provision for income taxes	—		15,419		—		15,038
Net loss from continuing operations	(9,753)		(109,035)		(18,595)		(110,782)
(Loss) income from discontinued operations, net of tax	(289)		1,153		382		2,471
Net loss	$	(10,042)	$	(107,882)	$	(18,213)	$	(108,311)

(Loss) income per basic share:
Loss per basic share from continuing operations	$	(1.52)	$	(26.24)	$	(3.17)	$	(26.82)
(Loss) income per basic share from discontinued operations	(0.05)		0.28		0.07		0.60
Loss per basic share	$	(1.57)	$	(25.96)	$	(3.10)	$	(26.22)
(Loss) income per diluted share:
Loss per diluted share from continuing operations	$	(1.52)	$	(26.24)	$	(3.17)	$	(26.82)
(Loss) income per diluted share from discontinued operations	(0.05)		0.28		0.07		0.60
Loss per diluted share	$	(1.57)	$	(25.96)	$	(3.10)	$	(26.22)

Average Shares Outstanding
Basic	6,399		4,156		5,874		4,131
Diluted	6,399		4,156		5,874		4,131

The accompanying notes are an integral part of these condensed consolidated financial statements.

Greenidge Generation Holdings Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except share data)


	Common Stock			Additional Paid - In Capital		Cumulative Translation Adjustment		Accumulated Deficit		Total
	Shares	Amount
Balance at January 1, 2023	4,625,278	$	—	$	293,774	$	(357)	$	(340,464)	$	(47,047)
Stock-based compensation expense	—	—		481		—		—		481
Issuance of shares, net of issuance costs	1,211,926	1		8,095		—		—		8,096
Restricted shares award issuance, net of withholdings	9,275	—		—		—		—		—
Issuance of shares for amendment fee associated with debt modification (Note 9), net of issuance costs	133,333			1,000						1,000
Foreign currency translation adjustment	—	—		—		17		—		17
Net loss	—	—		—		—		(8,171)		(8,171)
Balance at March 31, 2023	5,979,812	$	1	$	303,350	$	(340)	$	(348,635)	$	(45,624)
Stock-based compensation expense	—	—		568		—		—		568
Issuance of shares, net of issuance costs	1,253,434	—		3,320		—		—		3,320
Restricted shares award issuance, net of withholdings	3,368	—		—		—		—		—
Foreign currency translation adjustment	—	—		—		10		—		10
Net loss	—	—		—		—		(10,042)		(10,042)
Balance at June 30, 2023	7,236,614	$	1	$	307,238	$	(330)	$	(358,677)	$	(51,768)


Balance at January 1, 2022	4,086,534	$	—	$	281,819	$	—	$	(69,396)	$	212,423
Stock-based compensation expense	—	—		362		—		—		362
Issuance of shares, net of issuance costs	41,500	—		3,791		—		—		3,791
Restricted shares award issuance, net of withholdings	8,260	—		(65)		—		—		(65)
Proceeds from stock options exercised	33	—		2		—		—		2
Foreign currency translation adjustment	—	—		—		(32)		—		(32)
Net loss	—	—		—		—		(429)		(429)
Balance at March 31, 2022	4,136,327	$	—	$	285,909	$	(32)	$	(69,825)	$	216,052
Stock-based compensation expense	—	—		306		—		—		306
Issuance of shares, net of issuance costs	55,359	—		2,078		—		—		2,078
Proceeds from stock options exercised	196	—		12		—		—		12
Foreign currency translation adjustment	—	—		—		(134)		—		(134)
Net loss	—	—		—		—		(107,882)		(107,882)
Balance at June 30, 2022	4,191,882	$	—	$	288,305	$	(166)	$	(177,707)	$	110,432

The accompanying notes are an integral part of these condensed consolidated financial statements.

Greenidge Generation Holdings Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	Six Months Ended June 30,
	2023		2022
OPERATING ACTIVITIES FROM CONTINUING OPERATIONS:
Net loss	$	(18,213)	$	(108,311)
Income from discontinued operations	382		2,471
Net loss from continuing operations	(18,595)		(110,782)
Adjustments to reconcile net loss from continuing operations to net cash flow from operating activities:
Depreciation	6,985		8,190
Impairment of long-lived assets	—		71,500
Interest expense added to principal	1,212		—
Deferred income taxes	—		15,038
Amortization of debt issuance costs	1,405		1,909

Gain on sale of assets	(1,752)		(629)

Remeasurement of environmental liability	—		11,109
Stock-based compensation expense	1,049		669
Professional fees paid in common stock	250		—
Changes in operating assets and liabilities:
Accounts receivable	2,519		(790)
Emissions and carbon offset credits	(337)		1,102
Digital assets	348		—
Prepaids and other assets	2,689		(2,496)
Income tax receivable	(59)		—
Accounts payable	2,101		(663)
Accrued emissions	38		1,256
Accrued expenses	(3,285)		7,061
Income tax payable	—		(2,344)
Other	2,674		11
Net cash flow used for operating activities from continuing operations	(2,758)		141
INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
Purchases of and deposits for property and equipment	(7,033)		(105,374)
Proceeds from sale of assets	592		1,136
Proceeds from sale of marketable securities	—		496
Net cash flow used for investing activities from continuing operations	(6,441)		(103,742)
FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
Proceeds from issuance of common stock, net of issuance costs	11,165		5,869
Proceeds from stock options exercised	—		14
Restricted stock unit awards settled in cash for taxes	—		(65)
Proceeds from debt, net of issuance costs	—		96,605
Principal payments on debt	(5,304)		(17,574)

Repayments of lease obligations	—		(473)
Net cash flow provided by financing activities from continuing operations	5,861		84,376
Discontinued Operations:
Net cash flow from operating activities of discontinued operations	159		3,014
Net cash flow from investing activities of discontinued operations	3,325		(6)

Increase in cash and cash equivalents from discontinued operations	3,484		3,008
CHANGE IN CASH AND CASH EQUIVALENTS	146		(16,217)
CASH AND CASH EQUIVALENTS - beginning of year	15,217		82,599
CASH AND CASH EQUIVALENTS - end of period	$	15,363	$	66,382

See Note 13 for supplemental cash flow information

The accompanying notes are an integral part of these condensed consolidated financial statements.

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Greenidge Generation Holdings Inc. ("Greenidge") and its subsidiaries (collectively, the "Company") own and operate a vertically integrated cryptocurrency datacenter and power generation company. The Company owns and operates facilities at two locations: the Town of Torrey, New York (the "New York Facility") and Spartanburg, South Carolina (the "South Carolina Facility"). The Company generates revenue in U.S. dollars by providing hosting, power and technical support services to third-party owned bitcoin mining equipment and generates revenue in the form of bitcoin by earning bitcoin as rewards and transaction fees for supporting the global bitcoin network with application-specific integrated circuit computers ("ASICs" or "miners") owned by the Company, which may be operated at the Company's sites or at third-party hosting sites through short-term hosting agreements. The earned bitcoin are then exchanged for U.S. dollars. The Company also owns and operates a 106 megawatt ("MW") power facility that is connected to the New York Independent System Operator ("NYISO") power grid. In addition to the electricity used "behind the meter" by the New York datacenter, the Company sells electricity to the NYISO at all times when its power plant is running and increases or decreases the amount of electricity sold based on prevailing prices in the wholesale electricity market and demand for electricity.

Effective May 16, 2023, the Company effected a 1-for-10 reverse stock split of its outstanding shares of common stock. Unless specifically provided otherwise herein, all share and per share amounts of our common stock presented have been retroactively adjusted to reflect the reverse stock split. See Note 9, "Stockholder's Equity", for further details.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Presentation of Condensed Consolidated Financial Statements

In the opinion of Greenidge management, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results for the interim periods presented and such adjustments are of a normal recurring nature. The results for the unaudited interim condensed consolidated statements of operations are not necessarily indicative of results to be expected for the year ending December 31, 2023 or for any future interim period. The unaudited interim condensed consolidated financial statements do not include all of the information and notes required by United States Generally Accepted Accounting Principles for complete financial statements.

The Company has reflected the operations of its Support.com business as discontinued operations for all periods presented. See Note 3, “Discontinued Operations” for further information. Unless otherwise noted, amounts and disclosures throughout these notes to the Company's condensed consolidated financial statements relate solely to continuing operations and exclude all discontinued operations.

The accompanying condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements of the Company in its 2022 Annual Report on Form 10-K.

Going Concern

In accordance with the Financial Accounting Standards Board (the "FASB") Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements – Going Concern, the Greenidge's management evaluated whether there are conditions or events that pose risk associated with the Company's ability to continue as a going concern within one year after the date these financial statements have been issued. The Company’s condensed consolidated financial statements have been prepared assuming that it will continue as a going concern.

When comparing to December 31, 2021, during 2022 the bitcoin price declined as much as 66% and ended the year 64% lower. Natural gas prices were much higher during 2022 compared to 2021, peaking at approximately 160% higher than the December 31, 2021 price, and ending the year approximately 47% higher than the December 31, 2021 price. The volatility in these commodity prices negatively impacted the Company's results in 2022. As a result, management took certain actions during the second half of 2022 and the first half of 2023 to improve the Company's liquidity that are described further below. At June 30, 2023, the Company had $15.4 million of cash and cash equivalents, while having $22.9 million of accounts payable and accrued expenses, an estimated $1.7 million of environmental liability spend in the next 12 months, as well as $14.5 million of principal and interest payments on debt due within the next 12 months.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. In an effort to improve liquidity, the Company has completed or is in the process of completing the following transactions:

•In September 2022, Greenidge entered into an at-the-market issuance sales agreement, as amended, dated as of September 19, 2022, by and among the Company, B. Riley Securities, Inc. (“B. Riley Securities”) and Northland Securities, Inc., relating to shares of Greenidge’s Class A common stock (the "ATM Agreement"), and since October 23, 2022 through August 1, 2023, have received net proceeds of $14.3 million from sales of Class A common stock under the ATM Agreement, of which $12.2 million of net proceeds was received since January 1, 2023. See Note 9, "Stockholder's Equity", for further details.

•On January 30, 2023, the Company entered into debt restructuring agreements with NYDIG ABL LLC ("NYDIG") and B. Riley Commercial Capital, LLC ("B. Riley Commercial"). The restructuring of the NYDIG debt is expected to improve the Company's liquidity during 2023 as the payments required in 2023 on the remaining principal balance is interest payments of $2.0 million. This reduced debt service is substantially lower than the $62.7 million of principal and interest payments which would have been required in 2023 pursuant to the 2021 and 2022 Master Equipment Finance Agreements, both of which were refinanced in January 2023. See Note 5, "Debt" for further details regarding the debt restructuring agreements.

•In conjunction with the restructuring of the debt with NYDIG, the Company also entered into hosting agreements with NYDIG on January 30, 2023 (the “NYDIG Hosting Agreements”), which is expected to improve its liquidity position, as it provided for cost reimbursements for key input costs, while allowing the Company to participate in the upside should bitcoin prices rise.

•In August 2023, in connection with a non-binding term sheet that the Company entered into with NYDIG in June to effect a deleveraging transaction, the Company completed an electrical upgrade at its South Carolina facility increasing the capacity to 44 MW. Upon completion of this expansion, on August 10, 2023, the Company and NYDIG amended the NYDIG Hosting Agreements to increase the number of miners being hosted by Greenidge utilizing all of the expansion. The NYDIG Hosting Agreements were amended in furtherance of the broader transaction contemplated by the non-binding term sheet pursuant to which the Company would sell to NYDIG all of the upgraded mining facilities at the South Carolina site and would also subdivide and sell to NYDIG the approximately 25 acres of land on which the facilities are located. Additionally, pursuant to the non-binding term sheet, in recognition of the capital expenditures required to be made by the Company to upgrade the South Carolina facility, NYDIG agreed that in the event that the Company was proceeding in good faith in connection with the transaction contemplated by the non-binding term sheet, that in the event the Company’s cash reserves fell below $10 million, that the covenant set forth in the NYDIG Senior Secured Loan requiring the Company to maintain a minimum of $10 million of cash would be reduced to $6 million. As the Company has completed the upgrade but is still in the process of subdividing the 25 acre parcel, which is required to close the transaction pursuant to the non-binding term sheet, as an interim measure the parties amended the existing NYDIG Hosting Agreements. In connection with amending the NYDIG Hosting Agreements, and in order to facilitate the transactions contemplated by the non-binding term sheet, on August 11, 2023, NYDIG granted a limited waiver to the Company with respect to reducing the Company’s minimum cash requirement under the NYDIG Senior Secured Loan from $10 million to $6 million and also agreed to amend, on or before August 21, 2023, the NYDIG Senior Secured Loan and the Secured Promissory Note issued to B Riley Commercial (which NYDIG purchased from B Riley Commercial on July 20, 2023 at par) to extend the waiver of the minimum cash requirement as well as to suspend interest and principal payments due under both the NYDIG Senior Loan and the B Riley Commercial Note until the earlier of (i) the completion of the transactions contemplated by the non-binding term sheet, or (ii) December 29, 2023 (the “Limited Waiver”). The Company is actively working towards completing the subdivision of the 25 acre parcel on which the upgraded mining facilities are located so it can consummate the transaction contemplated by the non-binding term sheet, and although there can be no

assurances that the Company will close such transaction, the Company currently anticipates that it will be able to do so in the fourth quarter of 2023 and prior to the end of the calendar year.

Upon the closing of the transaction contemplated by the non-binding term sheet, the Company would retain approximately 150 acres of land at the site. In exchange for the sale to NYDIG of the upgraded South Carolina mining facilities and the subdivided approximate 25 acres of land, Greenidge would receive:

◦Full relief from the Senior Secured Loan with NYDIG with remaining principal of approximately $17.7 million;

◦Full relief from the B Riley Commercial Secured Promissory Note with remaining principal of approximately $5.6 million as of June 30, 2023, which NYDIG purchased from B. Riley Commercial on July 20, 2023 at par following Greenidge's principal payment to B. Riley Commercial, which reduced the principal balance to approximately $4.1 million;

◦Relief from principal and interest payments between August 2023 and the earlier of closing of the sale or December 29, 2023; however, interest on the Senior Secured Loan and the Secured Promissory Note will accrue over that period;

◦A cash payment of approximately $4.9 million, net of the accrued interest payments on the NYDIG Senior Loan and the B Riley Commercial Secured Promissory Note and certain transaction fees owed to NYDIG; and

◦Bonus payments of up to approximately $2.6 million tied to completion of the expansion of the upgraded mining facility and uptime performance of the facility.

•In addition, the Company sold equipment, coupons and certain environmental credits for total proceeds of $11.7 million from the second quarter of 2022 through the second quarter of 2023 to raise additional funds.

•Since entering into the NYDIG Hosting Agreements, the Company has identified opportunities to deploy its company-owned miners. In March 2023, the Company entered into a hosting agreement with Conifex Timber Inc. ("Conifex"), whereby Conifex will provide hosting services to Greenidge utilizing renewable power (the “Conifex Hosting Agreement”). In April 2023, the Company entered into a hosting agreement with Core Scientific, Inc. ("Core") in which Core will host and operate Greenidge-owned bitcoin miners at its facilities (the “Core Hosting Agreement”, and together with the NYDIG Hosting Agreements and the Conifex Hosting Agreement, the “Hosting Agreements”). In addition, the Company installed approximately 1,500 additional company-owned miners at its existing facilities in Dresden, New York. The Company believes that the installation of these miners at Conifex and Core facilities along with those miners at its own facilities will improve the Company's profits and liquidity during the remainder of 2023 and beyond.

Despite these improvements to the Company's financial condition, Greenidge management expects that it will require additional capital in order to fund the Company’s expenses and to support the Company’s debt servicing requirements. Management will continue to work towards completing the sale of the South Carolina facility, which is expected to occur during the fourth quarter, but it is contingent on the completion of certain actions that would allow the Company to subdivide the 25 acres in order to be able to transfer the facilities along with real estate. While completion of the sale of the South Carolina facility would provide additional liquidity, management continues to assess different options to improve its liquidity which include, but are not limited to:

•issuances of equity, including but not limited to issuances under the Equity Purchase Agreement and/or the ATM Agreement.

•a sale of the Company's excess real estate at its South Carolina facility that is not used in its datacenter operations.

As a result of the Company's development of the buildout of the upgrade of power capacity and construction of additional mining infrastructure in South Carolina in anticipation of the sale of the site, the Company estimates that cash resources will fall below $10 million during the third quarter 2023; however, as discussed above, pursuant to the Limited Waiver, NYDIG agreed to reduce the minimum cash requirement to $6 million. If the Company is unable to complete the sale of the South Carolina site by December 29, 2023, and it is determined by both parties that the sale would not occur,

(i) the Company would then be required to repay in full the entire principal amount (approximately $4.1 million) and all accrued interest in respect to Secured Promissory Note, (ii) the Company would be required to pay all accrued interest in respect of the NYDIG Senior Secured Loan, (iii) the Company would have a 60-day cure period before the minimum cash requirement would revert to $10 million, and (iv) the Hosting Agreements, as amended, would remain in place. If this were to occur, we would expect that we likely would not have cash in excess of $10 million, which would be considered an Event of Default as defined under the Senior Secured Loan that would require the repayment of the loan balance if a waiver is not obtained from NYDIG. The Company's estimate of cash resources available to the Company for the next 12 months is dependent on completion of certain actions, including the completion of the sale of the South Carolina mining facility and related real estate, bitcoin prices and blockchain difficulty levels similar to those existing as of the filing of this Quarterly Report on Form 10-Q and energy prices similar to the those experienced in the second quarter of 2023. While bitcoin prices have begun to recover from the significant declines experienced in 2022 during the first six months of 2023, management cannot predict when or if bitcoin prices will recover to prior levels, or the volatility of energy costs. While the Company continues to work to implement options to improve liquidity, there can be no assurance that these efforts will be successful and the Company's liquidity could be negatively impacted by factors outside of its control, in particular, significant decreases in the price of bitcoin, regulatory changes concerning cryptocurrency, increases in energy costs or other macroeconomic conditions and other matters identified in Part I, Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and in this Quarterly Report on Form 10-Q. Given this uncertainty regarding the Company's financial condition over the next 12 months from the date these financial statements were issued, the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a reasonable period of time. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Revenue Recognition

Revenue From Contracts With Customer - Hosting

On January 30, 2023, Greenidge entered into the NYDIG Hosting Agreements, with Greenidge operating miners owned by NYDIG affiliates. Under these agreements, the Company agreed to host, power and provide technical support services, and other related services, to NYDIG affiliates’ mining equipment at certain Greenidge facilities for a term of five years. The terms of such arrangements requires NYDIG affiliates to pay a reimbursement fee that covers the cost of power and direct costs associated with management of the mining facilities, a hosting fee as well as a gross profit-sharing arrangement. Under the NYDIG Hosting Agreements, NYDIG affiliates are required to provide Greenidge an upfront security deposit, pay a configuration fee for the setup of new or relocated miners, and pay for repairs and parts consumed in non-routine maintenance (i.e., units that are out of service for more than 12 hours).

Datacenter Hosting Revenue

The Company generates revenue from contracts with customers from providing hosting services to a single third-party customer. Hosting revenue is recognized as services are performed on a variable basis. The Company recognizes variable hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to its customer, and its customer utilizes the hosting service (the customer simultaneously receives and consumes the benefits of the Company's performance). The Company's performance obligation related to these services is satisfied over time. The Company recognizes revenue for services that are performed on a consumption basis (the amount of electricity utilized by the customer) as well as through a fixed fee that is earned monthly and a profit sharing component based on the net proceeds earned by the customer in the month from bitcoin mining activities. The Company bills its customer at the beginning of each month based on the anticipated consumption under the contract. Invoices are collected in the month of invoicing under the terms of the contract. The Company recognizes revenue based on actual consumption in the period and invoices adjustments in subsequent periods or retains credits toward future consumption.

Cryptocurrency Datacenter Revenue

Greenidge has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time at no cost by either party and Greenidge’s enforceable right to compensation begins only when, and lasts as long as, Greenidge provides computing power to the mining pool operator. In exchange for providing computing power, Greenidge is entitled to a fractional share of the cryptocurrency award the mining pool operator theoretically receives less digital asset transaction fees to the mining pool operator. The agreements entered into with the pool operators payout based on a Full-Pay-Per-Share payout formula, which is based on a conceptual formula that calculates the hash rate provided by Greenidge to the mining pool as a

percentage of total network hash rate and other inputs. Under this payout formula, Greenidge is entitled to consideration upon the provision of computing power to the pool even if a block is not successfully placed by the pool operator. Revenue is measured as the value of the fractional share of the cryptocurrency award received from the pool operator, which has been reduced by the transaction fee retained by the pool operator.

Providing computing power in digital asset transaction verification services is an output of Greenidge’s ordinary activities. The provision of such computing power is the only performance obligation in Greenidge’s contracts with mining pool operators. The cryptocurrency that Greenidge receives as transaction consideration is noncash consideration, which Greenidge measures at fair value on the date received at the liquidation price received in the sale of the bitcoin reward, which is not materially different than the fair value at the contract inception or the time Greenidge has earned the award from the pools. The awards received are automatically sold shortly after receipt. The consideration is all variable based on the amount of computing power provided by Greenidge and the total network hash rate.

Pool fees paid by miners to pooling operators are based on a fixed percentage of the theoretical bitcoin block reward and network transaction fees received by miners. Pooling fees are netted against daily bitcoin payouts. Greenidge does not expect any material future changes in pool fee percentages paid to pooling operators.

Digital Assets

Digital assets, primarily consisting of bitcoin, are included in current assets in the accompanying consolidated balance sheets. Digital assets are classified as indefinite-lived intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other, and are accounted for in connection with Greenidge’s revenue recognition policy. Digital assets held are considered an intangible asset with an indefinite useful life, which is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired.

The Company performs an analysis each period to identify whether events or changes in circumstances, principally decreases in the quoted prices on principal markets, indicate that it is more likely than not that its digital assets are impaired. Digital assets are considered impaired if the carrying value is greater than the lowest daily quoted prices at any time during the period. For quoted prices of bitcoin, the Company uses a source that publishes daily cryptocurrency trading metrics from information from multiple exchanges and uses an algorithm that factors the confidence from the distribution of prices reported by the exchanges. Subsequent reversal of impairment losses is not permitted. There were no impairments recorded during 2023. The Company assessed its digital assets for impairment, recorded an impairment of $0.1 million during the three and six months ended June 30, 2022, which is included in Other income, net on the consolidated statements of operations. The Company no longer holds bitcoin assets in custody wallets as of June 30, 2023. As of June 30, 2022, the Company’s digital assets consisted of approximately 29.0 bitcoins.

The Company considers the conversion of digital assets into U.S. dollars as a part of its normal operating activities and includes the impact of that conversion in Net cash flow (used for) provided by operating activities from continuing operations on the Consolidated Statements of Cash Flows.


Digital Assets at December 31, 2022						348
Revenues from digital asset production						10,431
Sale of digital assets						(10,779)
Digital assets at June 30, 2023						—

Recent Accounting Pronouncements, Adopted

There were not any recently adopted or newly issued accounting pronouncements, that have had, or are expected to have, a material impact on the Company's condensed consolidated financial statements and disclosures.

3. DISCONTINUED OPERATIONS

A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell or exit the business, the sale or exit is probable to occur during the next 12 months at a price or cost that is reasonable in relation to its current fair value and certain other criteria are met. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. When the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized and updated each reporting period as appropriate. A business classified as held for sale should be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on a reporting entity's operations and financial results.

Support.com

The contract for Support.com's largest customer was not renewed upon expiration on December 31, 2022. As a result of this material change in the business, management and the board of directors made the determination to consider various alternatives for Support.com, including the disposition of assets. At December 31, 2022, the Company classified the Support.com business as held for sale and discontinued operations in the condensed consolidated financial statements as a result of its strategic shift to strictly focus on its cryptocurrency datacenter and power generation operations.

In January 2023, Greenidge completed the sale of a portion of the assets of Support.com for net proceeds of approximately $2.6 million and is continuing to evaluate alternatives for the remainder of the Support.com segment assets. In June 2023, the Company entered into a purchase and sale agreements with third parties in order to sell certain remaining assets and liabilities, including the transfer of remaining customer contracts, for net proceeds of approximately $0.4 million. The Company anticipates to complete the disposal or wind-down of remaining Support.com operations by the end of the year.

Major classes of assets and liabilities consist of the following:


$ in thousands	June 30, 2023		December 31, 2022
Assets:
Accounts receivable	$	870	$	3,996
Prepaid expenses and other current assets	879		1,253
Current assets held for sale	1,749		5,249

Property and equipment, net	594		743
Other assets	466		481
Long-term assets held for sale	1,060		1,224
Loss on classification to held for sale	(1,735)		—
Assets held for sale	1,074		6,473

Liabilities:
Accounts payable	82		191
Accrued expenses	851		3,351

Current liabilities held for sale	933		3,542

Other long-term liabilities	542		432
Long-term liabilities held for sale	542		432
Liabilities held for sale	$	1,475	$	3,974

The Company reasonably expects to close on the sale or exit of Support.com within one year; therefore, the assets and liabilities of Support.com have been presented as current at June 30, 2023 and December 31, 2022.

Financial results from discontinued operations consist of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands	2023		2022		2023		2022
Revenue	$	1,724	$	8,413	$	3,845	$	16,913
Cost of revenue - services and other (exclusive of depreciation and amortization)	(1,574)		(3,573)		(3,468)		(7,644)
Depreciation and amortization	—		(330)		—		(655)
Selling, general and administrative	(845)		(2,797)		(1,912)		(5,380)
Merger and other costs	(379)		(485)		(530)		(698)
Gain on asset disposal	762		—		4,162		—
Loss on assets classified as held for sale	—		—		(1,735)		—
Other (loss) income, net	23		(5)		20		18
Pretax income from discontinued operations	(289)		1,223		382		2,554
Provision for income taxes	—		70		—		83
(Loss) income from discontinued operations, net of tax	$	(289)	$	1,153	$	382	$	2,471

The Company’s effective income tax rate from discontinued operations for the three months ended June 30, 2023 and 2022 was 0% and 5.7%, respectively, and for the six months ended June 30, 2023 and 2022 was 0% and 3.2%, respectively, primarily due to foreign rate differences.

4. PROPERTY AND EQUIPMENT

Property and equipment, net consisted of the following at June 30, 2023 and December 31, 2022:


$ in thousands	Estimated Useful Lives	June 30, 2023		December 31, 2022
Plant infrastructure	10 years	$	729	$	—
Miners	3 years	$	32,195	$	81,979
Miner facility infrastructure	10 years	14,661		14,203
Land	N/A	8,460		8,460
Equipment	5 years	45		45


Construction in process	N/A	19,709		18,349
Miner deposits	N/A	—		7,381
		75,799		130,417
Less: Accumulated depreciation		(4,983)		—
		$	70,816	$	130,417

Total depreciation expense was $3.2 million and $4.5 million for the three months ended June 30, 2023 and 2022, respectively and $7.0 million and $8.2 million for the six months ended June 30, 2023 and 2022, respectively.

On January 30, 2023, Greenidge entered into an agreement regarding its 2021 and 2022 Master Equipment Finance Agreements with NYDIG. During the six months ended June 30, 2023, the Company transferred ownership of bitcoin mining equipment with net book value of $50.0 million and miner deposits of $7.4 million that remained accrued to Greenidge for previous purchases of mining equipment with a bitcoin miner manufacturer and the related debt was canceled pursuant to a debt settlement agreement entered into with NYDIG. There was no gain or loss recognized on the sales as these assets. The Company recognized a gain on the sale of assets of $1.8 million, which primarily related to the

sale of bitcoin miner manufacturer coupons, including $1.2 million that were transferred as part of the debt restructuring agreement with NYDIG.

Impairment

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of a long-lived asset, management evaluates whether the estimated future undiscounted net cash flows, based on prevailing market conditions, from the asset are less than its carrying amount. If impairment is indicated, the long-lived asset is written down to fair value. In 2023 the Company has concluded that no triggering event has occurred and no impairments of long-lived assets have been recorded for the three or six months ended of June 30, 2023.

During the three months ended June 30, 2022, as a result of the significant reduction in the price of bitcoin and increased energy prices during 2022, the Company’s results of operations, as well as income expectations, were negatively impacted resulting in the recognition of noncash impairment charges of $71.5 million to reduce the net book value of the long-lived assets to fair value.

Fair value was determined utilizing the market approach, relying on the guideline public company method. Our guideline public company method incorporates revenue and hash rate multiples from other publicly traded companies with operations and other characteristics similar to Greenidge.

The table below provides a summary of the Q2 2022 impairment by category of asset:


$ in thousands
Land	$	5,000
Plant infrastructure	24,400
Miners	20,945
Miner Facility Infrastructure	990
Equipment	190
Software	70
Coal ash impoundment	925
Construction in process	18,980
Total	$	71,500

5. DEBT

The following table provides information on the Company's debt agreements:


$ in thousands							Balance as of:
Note	Loan Date	Maturity Date	Interest Rate		Amount Financed		June 30, 2023		December 31, 2022
Equipment Financings:
A-D	May 2021	October 2023	15.0	%	$	15,724	$	—	$	10,478
E	July 2021	January 2023	17.0	%	$	4,457	—		495
F	March 2022	April 2024	13.0	%	$	81,375	—		63,890
Senior Unsecured Notes	October 2021/December 2021	October 2026	8.5	%	$	72,200	72,200		72,200
Secured Promissory Note	March 2022	November 2023	7.5	%	$	26,500	5,621		10,430
Senior Secured Loan	January 2023	January 2025	15.0	%	$	17,322	17,689		—
Total Debt							95,510		157,493
Less: Debt discount and issue costs							(5,287)		(5,747)
Total debt at book value							90,223		151,746
Less: Current portion							(3,536)		(67,161)
Long-term debt, net of current portion and deferred financing fees							$	86,687	$	84,585

The Company incurred interest expense of $3.1 million and $6.9 million during the three months ended June 30, 2023 and 2022, respectively, and $6.7 million and $10.3 million during the six months ended June 30, 2023 and 2022, respectively, under the terms of these financings.

Senior Secured Loan

On March 21, 2022, Greenidge, as guarantor, together with its wholly-owned subsidiaries GTX Gen 1 Collateral LLC, GNY Collateral LLC and GSC Collateral LLC (collectively, the "Borrowers") entered into a Master Equipment Finance Agreement (the "NYDIG Financing Agreement") with NYDIG, as lender, whereby NYDIG agreed to lend to the Borrowers approximately $81 million under loan schedules that were partially funded for approximately $54 million in March 2022, with additional funding of $17 million through December 31, 2022, to finance the acquisition of certain miners and related equipment (the "Financed Equipment"). The Borrowers' obligations under the NYDIG Financing Agreement were fully and unconditionally guaranteed by Greenidge. Outstanding borrowings under the NYDIG Financing Agreement were secured by all assets of the Borrowers, including without limitation, the Financed Equipment and proceeds thereof (including bitcoin). The loan schedules bore interest at a rate of 13% per annum and had terms of 25 months. Certain loan schedules were interest-only for a specified period and otherwise payments on loan schedules included both an interest and principal payment. Pursuant to the terms of the NYDIG Financing Agreement, the Borrowers and with certain exceptions, the Company, were subject to certain covenants and restrictive provisions which, among other things limited: the Borrowers’ ability to incur additional indebtedness for borrowed money; additional liens on the collateral or the equity interests of any of the Borrowers; consolidations or mergers including the Borrowers or the Company unless such would not constitute a Change in Control (as defined therein); disposing of the collateral or any portion of the collateral with certain exceptions; the Borrowers’ ability to make certain restricted payments and investments; and the ability to create certain direct obligations of the Borrowers or the Company unless the NYDIG Financing Agreement is at least pari passu in right of payment; each of which were subject to customary and usual exceptions and baskets. The loans under the NYDIG Financing Agreement could not be voluntarily partially prepaid, but could be prepaid in whole subject to a make-whole calculation. The NYDIG Financing Agreement is denoted in the table above as "Equipment Financings: A - D and F."

At December 31, 2022, Greenidge owed a payment of principal and interest in the amount of approximately $1.0 million due on December 25, 2022. Prior to defaulting on any payments, the Company and NYDIG entered into a waiver that stated both parties agreed that failure to pay the December 25, 2022 and the January 10, 2023 payments when due would not be an event of default if payment was made in full by January 27, 2023.

On January 30, 2023, the Company concurrently entered into a debt settlement agreement (the "Debt Settlement Agreement"), the Asset Purchase Agreement (the "NYDIG Purchase Agreement"), and a Senior Secured Loan Agreement (the "Senior Secured Loan") with NYDIG in order to refinance and replace certain outstanding indebtedness under certain Master Equipment Financing Agreements and related loan documentation (the "MEFAs"). The $75.8 million in debt previously outstanding under the MEFAs was reduced by $58.5 million pursuant to the Debt Settlement Agreement and the remaining $17.3 million outstanding under the MEFAs was refinanced. In exchange for this reduction in debt, the Company transferred under the NYDIG Purchase Agreement $50.0 million of bitcoin miners to NYDIG and $8.5 million of miner deposits and coupons that remained accrued to Greenidge for previous purchases of mining equipment with a bitcoin miner manufacturer. As part of the Debt Settlement Agreement, the Company entered into the Senior Secured Loan Agreement, as borrower, with NYDIG, as administrative agent and as collateral agent and is denoted in the table above as "Senior Secured Loan".

The Company evaluated the amendment under ASC 470-50, "Debt Modification and Extinguishment", and concluded that the updated terms qualified as a debt modification; therefore, no gain or loss was recorded.

The initial principal balance under the Secured Loan (the "Refinanced Amount") was approximately $17.3 million. Interest is payable monthly at an interest rate of 15% per annum, computed on the basis of a 360 day year of twelve 30-day months through January 30, 2025. The Secured Loan includes clauses requiring the Company to maintain cash balances in excess of $10 million, and failure to maintain this balance may be considered an event of default by the lender. The Secured Loan contains customary representations, warranties and covenants including restrictions on indebtedness, liens, restricted payments and dividend, investments, asset sales and similar covenants and contains customary events of default. In addition, the Secured Loan allowed for a voluntary prepayment of the loan in kind of approximately $10.2 million by transferring ownership of certain mining infrastructure assets to NYDIG if NYDIG entered into a binding agreement by April 30, 2023, facilitated by Greenidge, securing rights to a site for a future mining facility. The Company was informed on April 30, 2023 that NYDIG would not be entering into the binding agreement for the future mining facility and that portion of the debt remained outstanding, and as a result, accrued interest of approximately $0.4 million was capitalized into the principal balance at April 30, 2023.

In order to facilitate the transactions contemplated by a non-binding term sheet associated with the sale of the Company's South Carolina mining site to NYDIG, on August 11, 2023, NYDIG granted the Limited Waiver to the Company with respect to reducing the Company’s minimum cash requirement from $10 million to $6 million and agreed to amend the NYDIG Senior Secured Loan on or before August 21, 2023 to extend the waiver of the minimum cash requirement as well as to suspend interest and principal payments due under both the NYDIG Senior Loan and the B Riley Commercial Note until the earlier of (i) the completion of the transactions contemplated by the non-binding term sheet, or (ii) December 29, 2023. The Company is actively working towards completing the subdivision of the 25 acre parcel on which the upgraded mining facilities are located so it can consummate the transaction contemplated by the non-binding term sheet, and although there can be no assurances that the Company will close such transaction, the Company currently anticipates that it will be able to do so in the fourth quarter of 2023 before the end of the calendar year.

Secured Promissory Note

On March 18, 2022, Greenidge issued a secured promissory note, as borrower, in favor of B. Riley Commercial as noteholder (the "Noteholder"), evidencing a $26.5 million aggregate principal amount loan by B. Riley Commercial to Greenidge (the "Secured Promissory Note"). The Secured Promissory Note is guaranteed by certain of Greenidge’s wholly-owned subsidiaries: Greenidge South Carolina LLC, GSC RE LLC and 300 Jones Road LLC. The loan outstanding under the Secured Promissory Note originally bore interest at a rate of 6% per annum and originally matured on July 20, 2022, subject to up to five 30-day extensions, through December 2022, that may be elected by Greenidge provided no Event of Default (as defined therein) occurred and is continuing and Greenidge pays an Exit Fee (as defined therein) to the B. Riley Commercial. Pursuant to the terms of the Secured Promissory Note, Greenidge and its subsidiaries were subject to certain covenants and restrictive provisions which will, among other things, limit their ability to incur additional indebtedness for borrowed money or additional liens other than debt and liens permitted pursuant to the Secured Promissory Note; consolidate or merge unless Greenidge survives; or transfer all or substantially all of their assets; make certain restricted payments or investments; have a Change of Control (as defined therein); modify certain material agreements; and engage in certain types of transactions with affiliates; each of which are subject to customary and usual exceptions and baskets. The Secured Promissory Note is secured by a first priority mortgage lien on certain real property together with related improvements, fixtures and personal property located at Greenidge's South Carolina Facility. Greenidge’s obligations under the Secured Promissory Note may be prepaid in whole or in part without penalties or fees.

On August 10, 2022, Greenidge and B. Riley Commercial agreed to amend the terms of the Secured Promissory Note, by extending the maturity to June 2023, reducing scheduled monthly amortization payments and revising the interest rate to

7.5%. The Exit Fees (as defined therein) associated with the four 30-day extensions subsequent to August 10, 2022, were accelerated and added to the principal balance as of that date. The principal balance following the amendment was $16.4 million as of August 10, 2022. Additionally mandatory repayments of the Secured Promissory Note were revised, such that 65% of the net cash proceeds received from sales of stock under the Equity Purchase Agreement would be paid to B. Riley Commercial to repay the Secured Promissory Note. The Company evaluated the amendment under ASC 470-50, "Debt Modification and Extinguishment", and concluded that the updated terms qualified as a debt modification, and therefore, no gain or loss was recorded.

On January 13, 2023, Greenidge and B. Riley Commercial entered into a Waiver and Acknowledgement Letter (the "B Riley Waiver") regarding the terms of the Amended and Restated Bridge Promissory Note dated August 10, 2022 executed by Greenidge in favor of B. Riley Commercial. Under the B Riley Waiver, B. Riley Commercial agreed that Greenidge’s failure to pay the approximately $1.5 million payment of principal and interest due under the BRCC Note on December 20, 2022 would not be an event of default if that payment were made in full by the earlier of January 20, 2023 or the date that Greenidge and B. Riley Commercial enter into a mutually satisfactory amendment to the BRCC Note addressing, among other things, future amortization requirements under the Secured Promissory Note. The waiver left the due dates for other scheduled payments under the BRCC Note unaffected.

On January 30, 2023, Greenidge entered into the Consent and Amendment No. 1 to the Promissory Note (the "B. Riley Amendment") with B. Riley Commercial. The B. Riley Amendment modified the payment dates and principal and interest payment amounts under the Promissory Note, requiring no principal and interest payments until June 2023 and monthly payments thereafter through November 2023. Under the terms of the B. Riley Amendment, each of B. Riley Commercial and Atlas Holdings LLC ("Atlas"), or an affiliate thereof, purchased $1 million of Greenidge’s Class A common stock under the ATM Agreement. B. Riley Commercial purchased common stock on a principal basis at $7.50 per share and Atlas or its affiliate purchased common stock at market prices through B. Riley acting as sales agent. Greenidge also paid a $1 million dollar amendment fee to B. Riley Commercial, payable by the delivery of Greenidge Class A common stock to B. Riley Commercial, as principal under the ATM Agreement, at a price of $7.50 per share. Under the B. Riley Amendment, Greenidge is required to make mandatory monthly debt repayments under the Promissory Note of 15% of the net proceeds of sales of equity, including sales under the ATM Agreement and the equity purchase agreement. The monthly principal amortization payments are $1.5 million beginning June 20, 2023.

The Company evaluated the amendment under ASC 470-50, "Debt Modification and Extinguishment", and concluded that the updated terms qualified as a debt modification, therefore, no gain or loss was recorded.

On July 20, 2023, NYDIG purchased the secured promissory note from B. Riley Commercial. See Note 14, Subsequent Events, for further details. Under the Limited Waiver discussed in the description of the Senior Secured Loan, NYDIG agreed to amend the NYDIG the Secured Promissory Note on or before August 21, 2023 to suspend interest and principal payments due under the B Riley Commercial Note until the earlier of (i) the completion of the transactions contemplated by the non-binding term sheet, or (ii) December 29, 2023 (the “Limited Waiver”).

Senior Unsecured Notes

During the fourth quarter of 2021, the Company sold $72.2 million of 8.50% Senior Notes due October 2026 (the "Notes") pursuant to the Company's registration statement on Form S-1. Interest on the Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year to the holders of record at the close of business on the immediately preceding January 15, April 15, July 15 and October 15, respectively. The Notes are senior unsecured obligations of the Company and rank equal in right of payment with the Company's existing and future senior unsecured indebtedness. The Notes trade on the Nasdaq Global Select Market under the symbol "GREEL."

The Company may redeem the Notes for cash in whole or in part at any time (i) on or after October 31, 2023 and prior to October 31, 2024, at a price equal to 102% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on or after October 31, 2024 and prior to October 31, 2025, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, and (iii) on or after October 31, 2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, the Company may redeem the Notes, in whole, but not in part, at any time at its option, at a redemption price equal to 100.5% of the principal amount plus accrued and unpaid interest to, but not including, the date of redemption, upon the occurrence of certain change of control events.

Minimum Future Principal Payments

Minimum future principal payments on debt at June 30, 2023 were as follows:


$ in thousands
Remainder of 2023	$	5,621
2024	—
2025	17,689
2026	72,200
2027	—
Total	$	95,510

Fair Value Disclosure

The notional value and estimated fair value of the Company's debt totaled $95.5 million and $37.7 million, respectively at June 30, 2023 and $157.5 million and $88.5 million, respectively at December 31, 2022. The notional value does not include unamortized discounts and debt issuance costs of $5.3 million and $5.7 million at June 30, 2023 and December 31, 2022, respectively. The estimated fair value of the senior unsecured notes due October 2026 was measured using quoted market prices at the reporting date. Such instruments were valued using Level 1 inputs. For the equipment financings, senior secured note and Secured Promissory Note, the Company believes the notional values approximate their fair values.

6. EARNINGS PER SHARE

The Company calculates basic earnings per share by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. The diluted earnings per share is computed by assuming the exercise, settlement, and vesting of all potential dilutive common stock equivalents outstanding for the period using the treasury stock method.

The following table sets forth a reconciliation of the numerator and denominator used to compute basic earnings and diluted per share of common stock.


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands, except per share amounts	2023		2022		2023		2022
Numerator
Net loss from continuing operations	$	(9,753)	$	(109,035)	$	(18,595)	$	(110,782)
(Loss) income from discontinued operations, net of tax	(289)		1,153		382		2,471
Net loss	$	(10,042)	$	(107,882)	$	(18,213)	$	(108,311)

Denominator
Basic weighted average shares outstanding	6,399		4,156		5,874		4,131


Diluted weighted average shares outstanding	6,399		4,156		5,874		4,131

(Loss) income per basic share:
Loss per basic share from continuing operations	$	(1.52)	$	(26.24)	$	(3.17)	$	(26.82)
(Loss) income per basic share from discontinued operations	(0.05)		0.28		0.07		0.60
Loss per basic share	$	(1.57)	$	(25.96)	$	(3.10)	$	(26.22)

(Loss) income per diluted share:
Loss per diluted share from continuing operations	$	(1.52)	$	(26.24)	$	(3.17)	$	(26.82)
(Loss) income per diluted share from discontinued operations	(0.05)		0.28		0.07		0.60
Loss per diluted share	$	(1.57)	$	(25.96)	$	(3.10)	$	(26.22)

For the three and six months ended June 30, 2023, there was no impact of dilution from any of the outstanding 12,048 RSUs or 363,096 common stock options due to the net loss, since inclusion of any impact from these awards would be anti-dilutive. For the three and six months ended June 30, 2022, there was no impact of dilution from any of the outstanding 48,215 RSUs or 57,656 common stock options due to the net loss, since inclusion of any impact from these awards would be antidilutive.

7. EQUITY BASED COMPENSATION

In February 2021, Greenidge adopted an equity incentive plan and reserved 383,111 shares of Class A common stock for issuance under the plan (the “2021 Equity Plan”), applicable to employees and non-employee directors. In April 2023, the stockholders approved an amendment and restatement of the Company's 2021 Equity Plan to increase the maximum aggregate number of shares of Class A common stock that may be issued for all purposes under the Plan by 500,000 shares of Class A common stock from 383,111 to 883,111 shares of Class A common stock and to remove the counting of shares of Class A common stock granted in connection with awards other than stock options and stock appreciation rights against the total number of shares available under the Plan as two shares of Class A common stock for every one share of Class A common stock granted in connection with such award. For the six months ended June 30, 2023, no additional shares had been granted under the 2021 Equity Plan. In October 2022, the Company registered 307,684 shares of Class A common stock, outside the 2021 Equity Plan, that were reserved for issuance upon the vesting and exercise of non-qualified stock options inducement grants.

Restricted Common Stock Unit Awards

Restricted stock unit ("RSU") awards are generally eligible to vest over a three-year period.

The Company’s unvested RSU awards activity for the six months ended June 30, 2023 is summarized below:


	RSUs	Weighted Average Grant Date Fair Value
Unvested at December 31, 2022	24,729	$	68.80

Vested	(12,681)	$	61.69
Unvested at June 30, 2023	12,048	$	76.28

The value of RSU grants is measured based on their fair market value on the date of grant and amortized over their requisite service periods. There were no grants awarded during the three months ended June 30, 2023. At June 30, 2023, there was approximately $0.7 million of total unrecognized compensation cost related to unvested restricted stock rights, which is expected to be recognized over a remaining weighted-average vesting period of less than 1 year.

Common Stock Options

The Company’s common stock options activity for the six months ended June 30, 2023 is summarized below:


	Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2022	364,185	$	20.46


Forfeited	(1,089)	$	62.50

Outstanding at June 30, 2023	363,096	$	20.32	9.0	$	1,024
Exercisable as of June 30, 2023	50,031	$	59.22	7.1	$	141

The value of common stock option grants is measured based on their fair market value on the date of grant and amortized over their requisite service periods. At June 30, 2023, there was approximately $2.4 million of total unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a remaining weighted-average vesting period of approximately 2.25 years.

Stock-Based Compensation

The Company recognized stock-based compensation expense of $0.6 million and $0.3 million during the three months ended June 30, 2023 and 2022, respectively and $1.0 million and $0.7 million during the six months ended June 30, 2023 and 2022, respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

8. INCOME TAXES

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. In addition, the effect of changes in enacted tax laws or rates or tax status is recognized in the interim period in which the change occurs.

The effective tax rate for the three and six months ended June 30, 2023 was 0% which was lower than the statutory rate of 21% because the Company has recognized a full valuation allowance on its deferred tax assets. The Company continued to evaluate the realizability of deferred tax assets and, due to continued reduced profitability, concluded that a valuation allowance should continue to be recognized for any deferred tax assets generated during the quarter. As a result, there was no net income tax benefit recorded for pretax losses of the U.S. operations in the three months and six months ended June 30, 2023.

The effective tax rate for the three and six months ended June 30, 2022 was (16.5)% and (15.7)%, respectively, which was lower than the statutory rate of 21% due to a charge of $15.0 million for the recognition of a valuation allowance during the three months ended June 30, 2022 for deferred tax assets, primarily related to historical net operating loss carryforwards of the Support.com business that was acquired in 2021, due to the reduced profitability caused by the declines in the price of bitcoin and the increased power costs.

9. STOCKHOLDERS' EQUITY

Reverse Stock Split

On April 11, 2023, the stockholders approved a reverse stock split of the Company's issued and outstanding Class A common stock, par value $0.0001 per share and Class B common stock, par value $0.0001 per share, such that all outstanding shares of common stock shall be reclassified into a smaller number of shares such that every ten (10) shares of Class A common stock are combined and reclassified into one (1) share of Class A common stock and every ten (10) shares of Class B common stock are combined and reclassified into one (1) share of Class B common stock such that every holder of outstanding shares of common stock on the effective date specified in the Certificate of Amendment shall receive, subject to the treatment of fractional shares described in the Certificate of Amendment, one share of Class A common stock or Class B common stock, as applicable, in exchange for ten shares of Class A common stock or Class B common stock, as applicable, held by such holder (the “Reverse Stock Split,”).

Equity Purchase Agreement with B. Riley Principal Capital, LLC

On September 15, 2021, as amended on April 7, 2022, Greenidge entered into the Equity Purchase Agreement with B. Riley Principal. Pursuant to the Equity Purchase Agreement, Greenidge has the right to sell to B. Riley up to $500 million in shares of its Class A common stock, subject to certain limitations and the satisfaction of specified conditions in the Equity Purchase Agreement, from time to time over the 24-month period commencing on April 28, 2022.

In connection with the Equity Purchase Agreement, Greenidge entered into a registration rights agreement with the Investor, pursuant to which Greenidge agreed to prepare and file a registration statement registering the resale by the Investor of those shares of Greenidge’s Class A common stock to be issued under the Equity Purchase Agreement. The registration statement became effective on April 28, 2022 (the "Effective Date"), relating to the resale of 572,095 shares of Greenidge’s Class A common stock in connection with the Equity Purchase Agreement.

From the Effective Date to June 30, 2023, Greenidge issued 159,923 shares of Class A common stock to the Investor pursuant to the Equity Purchase Agreement for aggregate proceeds of $5.0 million, net of discounts, of which there were no issuances in the three or six months ended June 30, 2023.

At The Market Issuance Sales Agreement with B. Riley Securities

On September 19, 2022, as amended on October 3, 2022, Greenidge entered into the ATM Agreement with B. Riley and Northland, relating to shares of Greenidge’s Class A common stock. Under the ATM Agreement, B. Riley will use its commercially reasonable efforts to sell on Greenidge’s behalf the shares of Greenidge’s Class A common stock requested to be sold by Greenidge, consistent with B. Riley’s normal trading and sales practices, under the terms and subject to the conditions set forth in the ATM Agreement. Greenidge has the discretion, subject to market demand, to vary the timing, prices and number of shares sold in accordance with the ATM Agreement. B. Riley may sell the Company’s Class A common stock by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) promulgated under the Securities Act. Greenidge pays B. Riley commissions for its services in acting as sales agent, in an amount to up to 5.0% of the gross proceeds of all Class A common stock sold through it as sales agent under the ATM Agreement. Pursuant to the registration statement filed registering shares to be sold in accordance with the terms of the ATM Agreement, Greenidge may offer and sell shares of its Class A common stock up to a maximum aggregate offering price of $22,800,000.

From October 1, 2022 through August 10, 2023, Greenidge issued 2,797,959 shares under the ATM Agreement for net proceeds of $14.3 million, of which 1,164,546 shares were issued for net proceeds of $3.1 million for the three months ended June 30, 2023 and 2,509,806 for net proceeds of $12.2 million for the six months ended June 30, 2023. The number of shares issued and the net proceeds includes the issuance of 133,333 shares to B. Riley as payment of a $1.0 million amendment fee on the Promissory Note in February 2023.

Other

In May 2023, Greenidge issued 54,348 unregistered shares of its class A common stock to a vendor as payment for services provided.

10. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company may be involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in such matters may arise and harm the Company's business. The Company is currently not aware of any such legal proceedings or claims that it believes will have a material adverse effect on its business, financial condition or operating results.

Environmental Liabilities

The Company has a coal combustion residual ("CCR") liability associated with the closure of a coal ash pond located on the Company's property in the Town of Torrey, New York. In accordance with ASC 410-30, Environmental Obligations ("ASC 410-30"), the Company has a liability of $17.5 million as of each of June 30, 2023 and December 31, 2022. CCRs are subject to federal and state requirements. Estimates are based on various assumptions including, but not limited to, closure and post-closure cost estimates, timing of expenditures, escalation factors, and requirements of granted permits. Additional adjustments to the environment liability may occur periodically due to potential changes in remediation requirements regarding coal combustion residuals which may lead to material changes in estimates and assumptions.

The Company owns and operates a fully permitted landfill that also acts as a leachate treatment facility. In accordance with ASC 410-30, the Company has recorded an environmental liability of $10.5 million as of each of June 30, 2023 and December 31, 2022. As required by NYSDEC, companies with landfills are required to fund a trust to cover closure costs and expenses after the landfill has stopped operating or, in lieu of a trust, may negotiate to maintain a letter of credit guaranteeing the payment of the liability. Estimates are based on various assumptions including, but not limited to, closure and post-closure cost estimates, timing of expenditures, escalation factors, and requirements of granted permits. Additional adjustments to the environment liability may occur periodically due to potential changes in estimates and assumptions. The liability has been determined based on estimated costs to remediate as well as post-closure costs which are assumed over an approximate 30-year period and assumes an annual inflation rate of 3.0%.

Other Matters

Support.com has received and may in the future receive additional requests for information, including subpoenas, from other governmental agencies relating to the subject matter of a consent order and civil investigative demands. The Company intends to cooperate with these information requests and is not aware of any other legal proceedings against the Company by governmental authorities at this time.

Commitments

The Company entered into a contract with Empire in September 2020 that provides for the transportation to its pipeline of 15,000 dekatherms of natural gas per day, approximately $0.2 million per month. The contract ends in September 2030 and may be terminated by either party with 12 months' notice after the initial 10-year period.

11. CONCENTRATIONS

The Company has a single hosting customer that accounted for 66% and 56% of the company's revenue during the three and six months ended June 30, 2023, respectively. There was no datacenter hosting revenue during the three and six months ended June 30, 2022.

For the Company's self-mining operations, Greenidge considers its mining pool operators to be its customers. Greenidge has historically used a limited number of pool operators that have operated under contracts with a one-day term, which allows Greenidge the option to change pool operators at any time. Revenue from one of the Company’s pool operator customers accounted for approximately 27% and 76% of total revenue for the three months ended June 30, 2023 and 2022, respectively, and 30% and 67% for the six months ended June 30, 2023 and 2022, respectively.

The Company has one major power customer, NYISO, that accounted for 7% and 12% of its revenue for the three months ended June 30, 2023 and 2022, respectively , and 9% and 17% for the six months ended June 30, 2023 and 2022, respectively.

The Company has one natural gas vendor that accounted for approximately 21% and 63% of cost of revenue for the three months ended June 30, 2023 and 2022, respectively, and 31% and 62% for the six months ended June 30, 2023 and 2022, respectively.

12. RELATED PARTY TRANSACTIONS

Letters of Credit

The Company's controlling stockholder, Atlas, has a letter of credit from a financial institution in the amount of $5.0 million at June 30, 2023 and December 31, 2022, payable to the NYSDEC. This letter of credit guarantees the current value of the Company’s landfill environmental liability. See Note 10, "Commitments and Contingencies" under the section "Environmental Liabilities" for further details.

Atlas also has a letter of credit from a financial institution in the amount of $3.6 million at June 30, 2023 and December 31, 2022, payable to Empire Pipeline Incorporated (“Empire”) in the event the Company should not make contracted payments for costs related to a pipeline interconnection project the Company has entered into with Empire (see Note 10, "Commitments and Contingencies").

Guarantee

An affiliate of Atlas had guaranteed the payment obligation of Greenidge in favor of Emera Energy Services, Inc. ("Emera") under an Energy Management Agreement and an ISDA Master Agreement under which Greenidge may enter into various transactions involving the purchase and sale of natural gas, electricity and other commodities with Emera. This guaranty was limited to $1.0 million and is no longer in effect. Atlas did not make any payments under the guarantee during the three and six months ended June 30, 2023 and 2022.

13. SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION


$ in thousands	June 30, 2023		December 31, 2022
Prepaid expenses:
Electric deposits	$	1,400	$	1,400
Prepaid insurance	1,499		3,822
Other	678		1,044
Total	$	3,577	$	6,266

Accrued expenses:
Accrued interest	$	1,031	$	1,741
Accrued compensation	1,829		1,535
Accrued non-income taxes	1,843		1,932
Other	2,747		6,119
Total	$	7,450	$	11,327

Greenidge had the following noncash investing and financing activities:


	Six Months Ended June 30,
$ in thousands	2023		2022
Property and equipment purchases in accounts payable	$	1,860	$	10,271
Common stock issued for amendment fee to lender	$	1,000	$	—
Common stock issued for professional services	$	250	$	—
Exchange of assets for reduction in debt	$	49,950	$	—
Exchange of coupons for reduction in debt	$	1,152	$	—
Exchange of equipment deposits for reduction in debt	$	7,381	$	—
Accrued interest added to debt principal	$	592	$	—

14. SUBSEQUENT EVENTS

Subsequent events have been evaluated through August 14, 2023, the date at which the condensed consolidated financial statements were available to be issued, and the Company has concluded that no such events or transactions took place that would require disclosure herein, except as stated directly below:

In August 2023, in connection with a non-binding term sheet that the Company entered into with NYDIG in June to effect a deleveraging transaction, the Company completed an electrical upgrade at its South Carolina facility increasing the capacity to 44 MW. Upon completion of this expansion, on August 10, 2023, the Company and NYDIG amended the NYDIG Hosting Agreements to increase the number of miners being hosted by Greenidge utilizing all of the expansion. The NYDIG Hosting Agreements were amended in furtherance of the broader transaction contemplated by the non-binding term sheet pursuant to which the Company would sell to NYDIG all of the upgraded mining facilities at the South Carolina site and would also subdivide and sell to NYDIG the approximately 25 acres of land on which the facilities are located. As the Company was still in the process of subdividing the 25 acre parcel, which is required to close the transaction pursuant to the non-binding term sheet after having completed the upgrade of the mining facilities, the parties have amended the existing NYDIG Hosting Agreements in the interim. In connection with amending the NYDIG Hosting Agreements, and in order to facilitate the transactions contemplated by the non-binding term sheet, NYDIG also agreed, among other things, to grant the Limited Waiver to the Company with respect to reducing the Company’s minimum cash requirement under the NYDIG Senior Secured Loan from $10 million to $6 million and to amend the NYDIG Senior Secured Loan and the Secured Promissory Note issued to B Riley Commercial (which NYDIG purchased from B Riley Commercial on July 20, 2023 at par) on or before August 21, 2023 to extend the waiver of the minimum cash requirement as well as to suspend interest and principal payments due under both the NYDIG Senior Loan and the B Riley Commercial Note until the earlier of (i) the completion of the transactions contemplated by the non-binding term sheet, or (ii)

December 29, 2023. The Company is actively working towards completing the subdivision of the 25 acre parcel on which the upgraded mining facilities are located so it can consummate the transaction contemplated by the non-binding term sheet, and although there can be no assurances that the Company will close such transaction, the Company currently anticipates that it will be able to do so in the fourth quarter of 2023 before the end of the calendar year.

•Full relief from the Senior Secured Loan with NYDIG with remaining principal of approximately $17.7 million;

•Full relief from the B Riley Commercial Secured Promissory Note with remaining principal of approximately $5.6 million as of June 30, 2023, which NYDIG purchased from B. Riley Commercial on July 20, 2023 at par following Greenidge's principal payment to B. Riley Commercial, which reduced the principal balance to approximately $4.1 million;

•Relief from principal and interest payments between August 2023 and the earlier of closing of the sale or December 31, 2022; however, interest on the Senior Secured Loan and the Secured Promissory Note will accrue over that period;

•A cash payment of approximately $4.9 million, net of the accrued interest payments on the NYDIG Senior Loan and the B Riley Commercial Secured Promissory Note and certain transaction fees owed to NYDIG; and

•Bonus payments of up to approximately $2.6 million tied to completion of the expansion of the upgraded mining facility and uptime performance of the facility.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read together with the audited financial statements and the related notes thereto of Greenidge Generation Holdings Inc. (“Greenidge”), together with its consolidated subsidiaries (the “Company”) for the years ended December 31, 2022 and 2021 included in our Annual Report on Form 10-K and the unaudited interim financial statements and related notes thereto of the Company for the three and six months ended June 30, 2023 included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains certain forward-looking statements that reflect plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “Risk Factors” disclosed in Item 1A to Part I of Greenidge's Annual Report on Form 10-K for the year ended December 31, 2022 and in this Quarterly Report on Form 10-Q, and “Cautionary Statement Regarding Forward-Looking Statements” sections of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. For purposes of this section, “the Company,” “we,” “us” and “our” refer to Greenidge Generation Holdings Inc. together with its consolidated subsidiaries. You should carefully read “Cautionary Statement Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.

Overview

We own cryptocurrency datacenter operations in the Town of Torrey, New York (the "New York Facility") and in Spartanburg, South Carolina (the "South Carolina Facility" and, together with the New York Facility, the "facilities"). The New York Facility is a vertically integrated cryptocurrency datacenter and power generation facility with an approximately 106 megawatt ("MW") nameplate capacity, natural gas power generation facility. We generate revenue from three primary sources (1) datacenter hosting which we commenced on January 30, 2023, (2) cryptocurrency mining and (3) power and capacity.

We generate all the power we require for operations in the New York Facility, where we enjoy relatively lower market prices for natural gas due to our access to the Millennium Gas Pipeline price hub. At the South Carolina Facility, we purchase power from a supplier of approximately 60% zero-carbon sourced energy, which results in relatively stable energy cost environment. We believe our competitive advantages include efficiently designed mining infrastructure and in-house operational expertise that we believe is capable of maintaining a higher operational uptime of miners. We are mining bitcoin and hosting bitcoin miners, which contributes to the security and transactability of the bitcoin ecosystem while concurrently supplying power to assist in meeting the power needs of homes and businesses in the region served by our New York Facility.

Greenidge datacenter operations consisted of approximately 38,700 miners with approximately 4.1 EH/s of combined capacity for both datacenter hosting and cryptocurrency mining, of which 28,500 miners, or 2.9 EH/s, is associated with datacenter hosting and 10,200 miners, or 1.2 EH/s, is associated with Greenidge's cryptocurrency mining.

Recent Transactions

Cryptocurrency Mining Hosting Agreements

On March 15, 2023, we entered into a hosting agreement with Conifex Timber Inc. (“Conifex”) to host 750 miners at

their facility in British Columbia, Canada (the “Conifex Hosting Agreement”). On April 27, 2023, we entered into a hosting agreement with Core Scientific, Inc. (“Core”) in which Core will host and operate approximately 6,900 of Greenidge-owned bitcoin miners at its facilities (the “Core Hosting Agreement”, and, together with the NYDIG Hosting Agreements as described below and the Conifex Hosting Agreement, the “Hosting Agreements”) . We also installed an additional 1,500 of company-owned miners at our existing facilities. Under the terms of the Hosting Agreements, the host entities will operate Greenidge owned miners in exchange for a hosting fee and a percentage of the mining proceeds.

NYDIG Agreements

On January 30, 2023, we entered into a number of agreements associated with our secured debt with NYDIG, including a Membership Interest and Asset Purchase Agreement (the "NYDIG Purchase Agreement"), a Senior Secured Loan Agreement (the "Senior Secured Loan") and a Debt Settlement Agreement (the "Debt Settlement Agreement") regarding our 2021 and 2022 Master Equipment Finance Agreements (the "MEFAs") with NYDIG. The effect of these agreements was to transfer to NYDIG ownership of bitcoin mining equipment that was secured by the MEFAs along with certain credits and coupons that had accrued to Greenidge for previous purchases of mining equipment with a bitcoin miner manufacturer. The transfer of these assets reduced the principal and accrued interest balance of our secured debt with NYDIG from $75.8 million to $17.3 million, for an aggregate debt reduction of $58.5 million (the "Refinancing"). The Senior Secured Loan allowed for a voluntary prepayment of the loan in kind of approximately $10 million by transferring ownership of certain mining infrastructure assets to NYDIG if NYDIG enters into a binding agreement, facilitated by

Greenidge, securing rights to a site for a future mining facility by April 30, 2023, which did not occur. NYDIG chose not to enter into a binding agreement securing rights to a site facilitated by Greenidge.

The restructuring of the NYDIG debt is expected to improve Greenidge’s liquidity during 2023 as the payments required in 2023 on the remaining principal balance is interest payments of $2.0 million. This reduced debt service is substantially lower than the $62.7 million of principal and interest payments which would have been required in 2023 pursuant to the 2021 and 2022 MEFAs, both of which have now been refinanced.

Greenidge provided additional collateral to NYDIG on its remaining mining-related assets, infrastructure assets, equity of its subsidiaries and certain cash balances to secure the remaining debt balance with NYDIG. The Senior Secured Loan contains certain affirmative, negative and financial covenants, including the maintenance of a minimum cash balance of $10 million, early amortization events, and events of default.

NYDIG Hosting Agreements

On January 30, 2023, we entered into the Hosting Agreements with NYDIG affiliates, which resulted in us largely operating as a hosting facility and service provider for miners acquired from us by NYDIG affiliates (the "NYDIG Hosting Agreements"). Under these agreements, we agreed to host, power and provide technical support services, and other related services, to NYDIG affiliates’ mining equipment at our facilities for a term of five years. The terms of such arrangements require NYDIG affiliates to pay a hosting fee that covers the cost of power and direct costs associated with management of the mining facilities as well as a gross profit-sharing arrangement. This allows us to participate in the upside should bitcoin prices rise, but reduces our downside risk of bitcoin price deterioration and cost increases related to natural gas. The arrangement covers most of our current mining capacity at the New York Facility and the entire South Carolina Facility. During the first quarter, we transitioned the mining operations to hosting by re-pooling the miners to NYDIG mining pools during February and March 2023. This process was substantially complete at March 31, 2023.

B. Riley Promissory Note

On January 30, 2023, we also entered into the Consent and Amendment No. 1 to the Promissory Note ("Promissory Note Amendment")in favor of B. Riley Commercial ("B. Riley Commercial") regarding $10.6 million of debt, including accrued interest, which included the following terms:

•B. Riley Commercial purchased $1 million of our Class A common stock on a principal basis at a price of $7.50 per share pursuant to an at-the-market issuance sales agreement, as amended, dated as of September 19, 2022, by and among the Company, B. Riley Securities, Inc. (“B. Riley Securities”) and Northland Securities, Inc., relating to shares of Greenidge’s Class A common stock (the "ATM Agreement");

•Atlas Holdings LLC ("Atlas") purchased $1 million of our Class A common stock at market prices through B. Riley Securities acting in its capacity as sales agent pursuant to the ATM Agreement;

•Greenidge made a principal payment of $1.9 million to B. Riley Commercial in February 2023;

•No further principal or interest payments are required to be made on the Secured Promissory Note until June 2023 except for the 15% of proceeds from sales of equity;

•Principal payments of $1.5 million beginning in June 2023 through November 2023 when any remaining principal will be due; AND

•We paid B. Riley Commercial a $1 million amendment fee payable by the delivery of our Class A common stock to B. Riley Commercial, issuable at $7.50 per share, acquired on a principal basis under the ATM Agreement.

South Carolina Expansion and Sale

In August 2023, in connection with a non-binding term sheet that the Company entered into with NYDIG in June to effect a deleveraging transaction, the Company completed an electrical upgrade at its South Carolina facility increasing the capacity to 44 MW, as well as the expansion of the mining infrastructure in order to support approximately 8,500 incremental miners. Upon completion of this expansion, on August 10, 2023, the Company and NYDIG amended the NYDIG Hosting Agreements to increase the number of miners being hosted by Greenidge utilizing all of the expansion. The NYDIG Hosting Agreements were amended in furtherance of the broader transaction contemplated by the non-binding term sheet pursuant to which the Company would sell to NYDIG all of the upgraded mining facilities at the South Carolina site and would also subdivide and sell to NYDIG the approximately 25 acres of land on which the facilities are located. As the Company was still in the process of subdividing the 25 acre parcel, which is required to close the transaction pursuant to the non-binding term sheet after having completed the upgrade of the mining facilities, the parties have amended the existing NYDIG Hosting Agreements in the interim. In connection with amending the NYDIG

Hosting Agreements, and in order to facilitate the transactions contemplated by the non-binding term sheet, NYDIG also agreed, among other things, to grant the Limited Waiver to the Company with respect to reducing the Company’s minimum cash requirement under the NYDIG Senior Secured Loan from $10 million to $6 million and to amend the NYDIG Senior Secured Loan and the Secured Promissory Note issued to B Riley Commercial (which NYDIG purchased from B Riley Commercial on July 20, 2023 at par) on or before August 21, 2023 to extend the waiver of the minimum cash requirement as well as to suspend interest and principal payments due under both the NYDIG Senior Loan and the B Riley Commercial Note until the earlier of (i) the completion of the transactions contemplated by the non-binding term sheet, or (ii) December 29, 2023. The Company is actively working towards completing the subdivision of the 25 acre parcel on which the upgraded mining facilities are located so it can consummate the transaction contemplated by the non-binding term sheet, and although there can be no assurances that the Company will close such transaction, the Company currently anticipates that it will be able to do so in the fourth quarter of 2023 before the end of the calendar year.

•Full relief from the Senior Secured Loan with NYDIG with remaining principal of approximately $17.7 million;

•Bonus payments of up to approximately $2.6 million tied to completion of the expansion of the upgraded mining facility and uptime performance of the facility.

Discontinued Operations

The contract with the Support.com's largest customer expired on December 31, 2022 and was not renewed. As a result, we have classified the Support.com business as held for sale and discontinued operations in these condensed consolidated financial statements as a result of management and the board of directors making a decision to pursue alternatives for the Support.com business and to strictly focus on its cryptocurrency datacenter and power generation operations. See Note 3, "Discontinued Operations" of our unaudited condensed consolidated financial statements for additional information.

Results from Continuing Operations - Three Months Ended June 30,

The following table sets forth key components of our results from continuing operations and should be read in conjunction with our condensed consolidated financial statements and related notes. All comparisons below refer to the three months ended June 30, 2023 versus the first three months ended June 30, 2022, unless otherwise specified.


	Three Months Ended June 30,						Variance
	2023			2022			$		%
REVENUE:
Datacenter hosting revenue	$	9,660		$	—		$	9,660	N/A
Cryptocurrency mining revenue	3,980			20,067			$	(16,087)	(80)	%
Power and capacity	1,070			2,859			(1,789)		(63)	%
Total revenue	14,710			22,926			(8,216)		(36)	%
OPERATING COSTS AND EXPENSES:
Cost of revenue (exclusive of depreciation)	11,141			14,836			(3,695)		(25)	%
Selling, general and administrative	7,049			8,291			(1,242)		(15)	%
Depreciation	3,165			4,537			(1,372)		(30)	%
Impairment of long-lived assets	—			71,500			(71,500)		(100)	%
Gain on sale of assets	(8)			(629)			621		(99)	%
Remeasurement of environmental liability	—			11,109			(11,109)		(100)	%
Total operating costs and expenses	21,347			109,644			(88,297)		(81)	%
Operating loss	(6,637)			(86,718)			80,081		(92)	%
OTHER EXPENSE, NET:	—			—
Interest expense, net	(3,112)			(6,910)			3,798		(55)	%
Gain (loss) on sale of digital assets	—			(10)			10		(100)	%
Other income (expense), net	(4)			22			(26)		(118)	%
Total other expense, net	(3,116)			(6,898)			3,782		(55)	%
Loss from continuing operations before income taxes	(9,753)			(93,616)			83,863		(90)	%
Provision for income taxes	—			15,419			(15,419)		(100)	%
Net loss from continuing operations	$	(9,753)		$	(109,035)		$	99,282	(91)	%

Adjusted Amounts (a)
Adjusted operating loss from continuing operations	$	(6,100)		$	(4,650)		(1,450)		31	%
Adjusted operating margin from continuing operations	(41.5)		%	(20.3)		%
Adjusted net loss from continuing operations	$	(9,216)		$	(11,911)		2,695		(23)	%
Other Financial Data (a)
EBITDA (loss) from continuing operations	$	(3,476)		$	(82,169)		78,693		(96)	%
as a percent of revenues	(23.6)		%	(358.4)		%
Adjusted EBITDA (loss) from continuing operations	$	(2,371)		$	205		(2,576)		(1257)	%
as a percent of revenues	(16.1)		%	0.9		%

(a)Adjusted Amounts and Other Financial Data are non-GAAP performance measures. A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliations" section of this Management's Discussion and Analysis ("MD&A").

Key Metrics

The following table provides a summary of key metrics related to the three months ended June 30, 2023 and 2022.


	Three Months Ended June 30,						Variance
$ in thousands, except $ per MWh and average bitcoin price	2023			2022			$		%
Revenue
Datacenter hosting revenue	$	9,660		$	—		$	9,660	N/A
Cryptocurrency mining revenue	3,980			20,067			(16,087)		(80)	%
Power and capacity	1,070			2,859			(1,789)		(63)	%
Total revenue	$	14,710		$	22,926		$	(8,216)	(36)	%
Components of revenue as % of total
Datacenter hosting	66		%	—		%
Cryptocurrency mining	27		%	88		%
Power and capacity	7		%	12		%
Total revenue	100		%	100		%
MWh
Datacenter hosting	135,161			—			135,161		N/A
Cryptocurrency mining	35,150			121,302			(86,152)		(71)	%
Power and capacity	23,523			27,799			(4,276)		(15)	%
Revenue per MWh
Datacenter hosting	$	71		$	—		$	71	N/A
Cryptocurrency mining	$	113		$	165		$	(52)	(32)	%
Power and capacity	$	45		$	103		$	(58)	(56)	%
Cost of revenue (exclusive of depreciation)
Datacenter hosting	$	6,727		$	—		$	6,727	N/A
Cryptocurrency mining	$	2,933		$	11,664		$	(8,731)	(75)	%
Power and capacity	$	1,481		$	3,172		$	(1,691)	(53)	%
Cost of revenue per MWh (exclusive of depreciation)
Datacenter hosting	$	50		$	—		$	50	N/A
Cryptocurrency mining	$	83		$	96		$	(13)	(14)	%
Power and capacity	$	63		$	114		$	(51)	(45)	%
Cryptocurrency Mining Metrics
Bitcoins produced:
Datacenter hosting	527			—			527		N/A
Cryptocurrency mining	143			621			(478)		(77)	%
Total bitcoins produced	670			621			49		8	%

Average bitcoin price	$	28,038		$	32,689		$	(4,651)	(14)	%



Average active hash rate (EH/s) (Hosted miners)	2,065,269			—			2,065,269		N/A
Average active hash rate (EH/s) (Company-owned miners)	577,090			1,597,793			(1,020,703)		(64)	%
Average difficulty (in trillions of hash)	49.5 T			29.7 T			19.80		67	%

Average bitcoin price is determined using the average daily price of the bitcoin earned using the price from the exchange used by Greenidge at the time earned.

Average hash rate is Greenidge’s average computing power over the period supplied to pool operators, which is measured using data from the pool operators.

Average difficulty is a measure of how difficult and time-consuming it is to find the right hash to solve the algorithm on the blockchain in order to receive a reward. Difficulty increases or decreases over time, depending on the number of miners on the network. It is the number of hashes it takes to solve the algorithm on the bitcoin blockchain. Our measure of Average difficulty is derived from the daily average difficulty reported by CoinMetrics, a leading provider of crypto financial intelligence.

Revenue

On January 30, 2023, upon entering into our hosting agreement with NYDIG, we transitioned the significant majority of the capacity of our owned datacenter facilities to datacenter hosting operations. We entered into hosting arrangements at third party sites for the majority of our remaining owned miners in the first and second quarters of 2023. We produced approximately 670 bitcoin during the second quarter of 2023, of which 527 bitcoin were produced by third-party miners through our datacenter hosting and 143 bitcoin were produced by our Greenidge owned miners through self-mining. At June 30, 2023, Greenidge datacenter operations consisted of approximately 38,700 miners with approximately 4.1 EH/s of combined capacity for both datacenter hosting and cryptocurrency mining, of which 28,500 miners, or 2.9 EH/s, is associated with datacenter hosting and 10,200 miners, or 1.2 EH/s, is associated with Greenidge's cryptocurrency mining.

Datacenter hosting revenue

On January 30, 2023, we entered into the NYDIG Hosting Agreement to provide datacenter hosting services. Under the NYDIG Hosting Agreements, we generate revenue from a reimbursement fee that covers the cost of power and direct costs associated with management of the mining facilities, a hosting fee and a gross profit-sharing arrangement. The arrangement covers significant majority of our current mining capacity at our owned facilities. We generated revenue of $9.7 million for the second quarter of 2023 for which there was no revenue in the comparable period of 2022.

Cryptocurrency mining revenue

For our cryptocurrency mining revenue, we generate revenue in the form of bitcoin by earning bitcoin as rewards and transaction fees for supporting the global bitcoin network with application-specific integrated circuit computers ("ASICs" or "miners") owned by the Company. Our cryptocurrency mining revenue decreased $16.1 million, or 80%, to $4.0 million. We estimate that approximately 40% of the decrease was due to the increase in the global bitcoin mining difficulty factor, while approximately 37% of the decrease was a result of the decline in Greenidge's average mining hashrate due to the sale of miners to NYDIG and the transition of capacity to hosting during the course of the first quarter of 2023 and subsequent ramp up of deployment of Greenidge's owned miners during the second quarter of 2023. Additionally, we estimate that approximately 3% of the decline was due to the decrease in the average price of bitcoin. Bitcoin mining difficulty was 67% higher compared to the prior period due to increases in the difficulty index associated with the complexity of the algorithmic solution required to create a block and receive a bitcoin award, the average bitcoin price was 14% lower and our average hash rate decreased 64% primarily related to the sale of miners to NYDIG in January 2023 and the reallocation of our a significant majority of our datacenter infrastructure capacity to hosting services.

Power and capacity revenue

Power and capacity revenue at our New York Facility is earned when we sell capacity and energy and ancillary services to the wholesale power grid managed by the New York Independent System Operator ("NYISO"). Through these sales, we earn revenue in three streams, including: (1) power revenue received based on the hourly price of power, (2) capacity revenue for committing to sell power to the NYISO when dispatched and (3) other ancillary service revenue received as compensation for the provision of operating reserves.

Our power and capacity revenue decreased $1.8 million, or 63%, to $1.1 million during the three months ended June 30, 2023. We estimate that lower volume reduced revenues by approximately 15% and lower prices impacted the power and capacity revenues by approximately 47%. This was a result of 56% lower price per MWh sold to the power grid and a 15% decrease in volume in second quarter of 2023, as compared to the prior period. The power revenue decreased in the second quarter of 2023 due to more moderate weather in New York during the second quarter of 2023 as compared to the second quarter of 2022 experienced.

Cost of revenue (exclusive of depreciation)


	Three Months Ended June 30,						Variance
	2023			2022			$		%
Datacenter hosting	$	6,727		$	—		$	6,727	N/A
Cryptocurrency mining	2,933			11,664			(8,731)		(75)	%
Power and capacity	1,481			3,172			(1,691)		(53)	%
Total cost of revenue (exclusive of depreciation)	$	11,141		$	14,836		$	(3,695)	(25)	%
As a percentage of total revenue	75.7		%	64.7		%

Total cost of revenue, exclusive of depreciation, decreased $3.7 million, or 25%, to $11.1 million during the three months ended June 30, 2023 as compared to the prior year period. Total cost of revenue, exclusive of depreciation, decreased approximately 36% due to lower natural gas input costs at the New York facility, as the average cost of natural gas per dekatherm was approximately 46% lower than the prior year. This decrease was partially offset by an increase in costs by approximately 12% due to monthly hosting fees paid to 3rd parties for hosting company owned miners which was a cost that did not occur in the prior year period when all company owned miners were hashing at company owned sites and by approximately 3% due to costs associated with a planned maintenance of the New York facility in the second quarter of 2023.

The significant portions of Cost of revenue are allocated between datacenter hosting, cryptocurrency mining and power and capacity based on MWH used by each. Power and capacity Cost of revenue also declined due to lower sales volume, while MWH utilized by cryptocurrency mining declined due a larger portion of mining capacity used for Hosting during the three months ended June 30, 2023. Costs paid to third party hosting sites are all allocated to cryptocurrency mining.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased $1.2 million, or 15%, to $7.0 million for the three months ended June 30, 2023 as compared to the prior year period. The main drivers of the decrease in selling, general and administrative expenses were:

•a decrease in legal costs of $0.8 million as the Company incurred higher regulatory related legal costs in the second quarter of 2022 associated with permit renewals and environmental matters at the New York plant; and

•a decrease in discretionary costs of approximately $0.4 million, primarily travel-related and outside consulting.