Greenidge Generation 10Q 2024 Q1 Quarterly report

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 March 31, 2024

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.)

590 Plant Road, Dresden, New York						14441
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (315) 536-2359

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 May 13, 2024, the registrant had 7,076,138 shares of Class A common stock, $0.0001 par value per share, outstanding and 2,733,394 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’ Deficit (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	D ef aults Upon Senior Securities	43
Item 4.	M ine Saf ety Disclo sures	43
Item 5.	O ther Information	43
Item 6.	Exhibits	43
Exhibit Index		43
Signatures		44

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 the most recent Form 10-K of Greenidge Generation Holdings Inc. (“Greenidge,” the “Company,” “we,” “us,” or “our”) filed with the Securities and Exchange Commission ("SEC") 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 (UNAUDITED)

(in thousands, except share and per share data)


	March 31, 2024		December 31, 2023

ASSETS
CURRENT ASSETS:
Cash and cash equivalents, including restricted cash	$	14,337	$	13,312


Digital assets	301		347
Accounts receivable	574		358
Prepaid expenses and current other assets	2,818		3,864
Emissions and carbon offset credits	11,952		5,694
Income tax receivable	857		857

Total current assets	30,839		24,432
LONG-TERM ASSETS:
Property and equipment, net	42,055		45,095
Other long-term assets	1,675		1,652


Total assets	74,569		71,179
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	2,590		3,495
Accrued emissions expense	12,256		10,520
Accrued expenses	4,266		6,116
Short-term environmental liability	663		363


Other short-term liabilities	150		—
Current liabilities held for sale	321		483
Total current liabilities	20,246		20,977
LONG-TERM LIABILITIES:
Long-term debt, net of deferred financing fees	68,971		68,710
Environmental liabilities	29,566		29,866
Other long-term liabilities	2,650		2,650
Total liabilities	121,433		122,203
COMMITMENTS AND CONTINGENCIES (NOTE 10)
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $0.0001, 20,000,000 shares authorized, none outstanding	—		—
Common stock, par value $0.0001, 500,000,000 shares authorized, 9,786,178 and 9,131,252 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	1		1
Additional paid-in capital	327,401		319,992
Cumulative translation adjustment	(348)		(345)
Common stock subscription receivable	—		(698)
Accumulated deficit	(373,918)		(369,974)
Total stockholders' deficit	(46,864)		(51,024)
Total liabilities and stockholders' deficit	$	74,569	$	71,179

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

Greenidge Generation Holdings Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

(in thousands, except per share data)


	Three Months Ended March 31,
	2024		2023
REVENUE:
Datacenter hosting	$	9,112	$	6,944
Cryptocurrency mining	6,999		6,451
Power and capacity	3,037		1,762
EPCM consulting services	185		—
Total revenue	19,333		15,157
OPERATING COSTS AND EXPENSES:
Cost of revenue - datacenter hosting (exclusive of depreciation)	7,018		4,671
Cost of revenue - cryptocurrency mining (exclusive of depreciation)	3,671		3,248
Cost of revenue - power and capacity (exclusive of depreciation)	1,546		1,816
Cost of revenue - EPCM consulting services (exclusive of depreciation)	83		—
Selling, general and administrative	5,487		9,013
Depreciation	3,234		3,820

Impairment of long-lived assets	169		—
Gain on sale of assets	—		(1,744)

Total operating costs and expenses	21,208		20,824
Operating loss	(1,875)		(5,667)
OTHER INCOME (EXPENSE), NET:
Interest expense, net	(1,802)		(3,573)
Gain on sale of digital assets	59		398
Change in fair value of warrant asset	(420)		—

Total other expense, net	(2,163)		(3,175)
Loss from continuing operations before income taxes	(4,038)		(8,842)
Benefit from income taxes	—		—
Net loss from continuing operations	(4,038)		(8,842)
Income from discontinued operations, net of tax	94		671
Net loss	$	(3,944)	$	(8,171)

Comprehensive Loss
Net Loss	(3,944)		(8,171)
Foreign currency translation adjustment	(3)		17
Comprehensive loss	$	(3,947)	$	(8,154)

Net loss per share, basic and diluted:
Net loss per share from continuing operations, basic and diluted	$	(0.43)	$	(1.66)
Income per share from discontinued operations, basic and diluted	0.01		0.13
Net loss per share, basic and diluted	$	(0.42)	$	(1.53)







Weighted average shares outstanding, basic and diluted	9,494		5,343

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

Greenidge Generation Holdings Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (UNAUDITED)

(in thousands, except share data)


	Common Stock		Additional Paid - In Capital			Subscription Receivable		Cumulative Translation Adjustment		Accumulated Deficit		Total
		Shares			Amount
Balance at January 1, 2024		9,131,252	$	1		$	319,992	$	(698)	$	(345)	$	(369,974)	$	(51,024)
Stock-based compensation expense		—	—			1,070		—		—		—		1,070
Issuance of shares in connection with Securities Purchase Agreement		450,300	—			1,133		—		—		—		1,133
Issuance of shares, net of issuance costs		45,269	—			340		698		—		—		1,038
Restricted shares award issuance		159,357	—			—		—		—		—		—
Issuance of warrants in connection with Securities Purchase Agreement		—	—			4,866		—		—		—		4,866
Foreign currency translation adjustment		—	—			—		—		(3)		—		(3)
Net loss		—	—			—		—		—		(3,944)		(3,944)
Balance at March 31, 2024		9,786,178	$	1		$	327,401	$	—	$	(348)	$	(373,918)	$	(46,864)

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	—			—		—		—		—		—
Proceeds from stock options exercised		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)

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)


	Three Months Ended March 31,
	2024		2023
OPERATING ACTIVITIES FROM CONTINUING OPERATIONS:
Net loss	$	(3,944)	$	(8,171)
Income from discontinued operations	94		671
Net loss from continuing operations	(4,038)		(8,842)
Adjustments to reconcile net loss from continuing operations to net cash flow from operating activities:
Depreciation	3,234		3,820
Accrued interest added to principal	—		911
Change in fair value of warrant asset	420		—
Amortization of debt issuance costs	261		649
Impairment of long-lived assets	169		—
Gain on sale of assets	—		(1,744)

Stock-based compensation expense	1,070		481
Changes in operating assets and liabilities:
Accounts receivable	(216)		2,654
Emissions and carbon offset credits	(6,258)		300
Digital assets	46		329
Prepaids and other assets	626		1,420
Income tax receivable	—		798
Accounts payable	(317)		1,252
Accrued emissions	1,736		(970)
Accrued expenses	(1,850)		(5,101)

Other	127		3,436
Net cash flow used for operating activities from continuing operations	(4,990)		(607)
INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
Purchases of and deposits for property and equipment	(1,332)		(6,459)
Proceeds from sale of assets	380		592

Net cash flow used for investing activities from continuing operations	(952)		(5,867)
FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
Proceeds from issuance of common stock, net of issuance costs	1,038		8,096


Proceeds from issuance of common stock and pre-funded warrants	6,000		—
Principal payments on debt	—		(3,283)


Net cash flow provided by financing activities from continuing operations	7,038		4,813
Discontinued Operations:
Net cash flow from operating activities of discontinued operations	(71)		915
Net cash flow from investing activities of discontinued operations	—		2,575

Increase (decrease) in cash and cash equivalents from discontinued operations	(71)		3,490
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	1,025		1,829
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of year	13,312		15,217
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - end of period	$	14,337	$	17,046

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") owns and operates a vertically integrated cryptocurrency datacenter and power generation company. The Company owns and operates facilities in the Town of Torrey, New York (the "New York Facility") and the Town of Columbia, Mississippi (the "Mississippi Facility"), operates a facility under a lease in the Town of Underwood, North Dakota (the "North Dakota Facility") and owned and operated a facility in 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. The par value remains unchanged. Unless specifically provided otherwise herein, all share and per share amounts as well as common stock and additional paid-in capital have been retroactively adjusted to reflect the reverse stock split. See Note 9, "Stockholders' Deficit", 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, 2024 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 2023 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 consolidated financial statements have been prepared assuming that it will continue as a going concern. The Company has historically incurred operating losses and negative cash flows from operations. These factors raise substantial doubt as to the Company’s ability to continue as a going concern.

The halving of bitcoin, which occurred April 19, 2024, may have an adverse effect on the Company’s projected future cash flows. The fixed costs to operate the business including, but not limited to, insurance, overhead and capital expenditures, as well as the variable input costs to operate the Company’s datacenters, has a material impact on the Company’s continuing operations and ability to generate positive cash flows. While the market has improved in 2023 and 2024, the Company continues to have to address the possibility of negative impacts of the price of bitcoin and natural gas as these have proven to be volatile markets. As a result, management took certain actions during 2023 to improve the Company's liquidity that are described further below. At March 31, 2024, the Company had $14.3 million of cash, restricted cash and

cash equivalents and other current assets of $16.5 million, while having $6.9 million of accounts payable and accrued expenses, emissions liability of $12.3 million, current liabilities held for sale of $0.3 million, other short-term liabilities of $0.2 million, and an estimated $0.7 million of environmental liability spend in the next 12 months, which results in ending working capital of $10.6 million.

Additionally, the Company has $6.1 million of interest payments due over the next twelve 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 May 13, 2024, have received net proceeds of $20.7 million from sales of Class A common stock under the ATM Agreement. See Note 9, "Stockholder's Deficit", 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 improved the Company's liquidity during 2023 as the payments required in 2023 on the remaining principal balance was 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" of our Annual Report on Form 10-K, filed April 10, 2024, 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 improved 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.

•On November 9, 2023, the Company closed the sale of the South Carolina Facility to complete the deleveraging transaction with NYDIG. In exchange for the sale to NYDIG of the upgraded 44 MW South Carolina mining facilities and the subdivided real estate of approximately 22 acres of land, the Company received total consideration of $28 million, as follows:

◦The Senior Secured Loan with NYDIG with remaining principal of $17.7 million was extinguished;

◦The B. Riley Commercial Secured Promissory Note with remaining principal of $4.1 million, which NYDIG purchased from B. Riley Commercial on July 20, 2023 at par was extinguished;

◦A cash payment of approximately $4.5 million, and

◦The Company also received bonus payments earned of approximately $1.6 million as a result of the completion of the expansion of the upgraded mining facility and the facility's uptime performance.

The Company recognized a gain on the sale of the South Carolina Facility of $8.2 million.

In conjunction with the sale, the Company and NYDIG terminated the South Carolina Hosting Order. The NYDIG Hosting Agreement related to the New York Facility was not impacted by this transaction and remains in place.

•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 first 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”).

•On April 10, 2024, we closed on the purchase a parcel of land containing approximately 12 acres located in Columbus, Mississippi, including over 73,000 square feet of industrial warehouse space. We intend to deploy 7 MW of miners on the property in the second quarter of 2024. We have also deployed additional miners in conjunction with a 7.5 MW mining capacity lease in North Dakota, which has a term of five years and provides us with energy to power mining. The Company believes the addition of these datacenters will improve the Company’s profits and liquidity during the remainder of 2024 and beyond.

•On February 12, 2024, the Company entered into a securities purchase agreement (the “SPA”) with Armistice Capital Master Fund Ltd. (“Armistice”). Pursuant to the SPA, Armistice purchased shares of the Company’s Class A common stock and a pre-funded Class A common stock purchase warrant entitling them to purchase shares of the Company’s Class A common stock. In addition, the Company issued to Armistice a Class A common stock purchase warrant entitling Armistice, commencing on August 14, 2024, to acquire additional shares of the Company’s Class A common stock from time to time. The SPA resulted in net proceeds of $6.0 million. See Note 9, "Stockholders' Deficit", for further details.

•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. From the Effective Date to March 31, 2024, The Company has received aggregate proceeds of $8.0 million, net of discounts, of which $0.3 million were received during the three months ended March 31, 2024. See Note 9, "Stockholders' Deficit", for further details.

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 near-term working capital needs and remaining debt servicing requirements. 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 remaining real estate in South Carolina and/or sale of the remaining miner infrastructure equipment inventory, which was not used in the South Carolina expansion.

The Company estimates that substantially all of its cash resources will be depleted by the end of the first quarter of 2025. The Company's estimate of cash resources available to the Company for the next 12 months is dependent on completion of certain actions, including obtaining additional short-term outside financing, executing on certain investing transactions; as well as 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 first quarter of 2024. While bitcoin prices have begun to recover during 2023 and the first quarter of 2024 from the significant declines experienced in 2022, management cannot predict when or if bitcoin prices will recover to sufficient levels for a sustained period of time in light of the halving that occurred in April 2024, 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, our inability to procure and comply with the permits and licenses required to operate our facilities, including the Title V Air Permit for the New York Facility, or the cost to us of such procurement or compliance, 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, 2024 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.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year’s presentation.

Significant Accounting Policies

The Company's significant accounting policies are described in Note 2. Summary of Significant Accounting Policies, in the Company's consolidated financial statements included in the Company's Annual Report filed on Form 10-K for the year ended December 31, 2023.

There have been no material changes to the significant accounting policies, except as described herein, for the three months ended March 31, 2024.

Revenue Recognition

Cryptocurrency Mining Revenue

Greenidge has entered into digital asset mining pools by executing contracts with the mining pool operators to perform hash computations for a 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 performs hash computations for the mining pool operator. In exchange for performing hash computations, Greenidge is entitled to a fractional share of the cryptocurrency award the mining pool operator theoretically receives less the mining pool fees. The agreements entered into with the pool operators pay out based on a Full-Pay-Per-Share (“FPPS”) payout formula, which is a conceptual formula that entitles Greenidge to consideration upon the provision of hash computations to the pool even if a block is not successfully placed by the pool operator. Revenue is measured as the value of the consideration received in the form of cryptocurrency from the pool operator, less the mining pool fees retained by the mining pool operator. Greenidge does not expect any material future changes in mining pool fee rates.

In exchange for performing hash computations for the mining pool, the Company is entitled to a fractional share of the cryptocurrency award the mining pool operator theoretically receives (less pool operator fees to the mining pool operator which are netted as a reduction of the transaction price). Greenidge’s fractional share is based on the proportion of hash computations the Company performed for the mining pool operator to the total hash computations contributed by all miners in solving the current algorithm during the 24-hour period. Daily earnings calculated under the FPPS payout formula are calculated from midnight-to-midnight UTC time and are credited to pool members’ accounts at 1:00:00 A.M. UTC. The pool sends Greenidge’s cryptocurrency balance in the account to a digital wallet designated by the Company between 9:00 A.M. and 5:00 P.M. UTC time each day, which Greenidge automatically sells for cash within minutes of receipt.

The service of performing hash computations for the mining pool operators is an output of Greenidge’s ordinary activities and 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 contract inception date at 0:00:00 UTC on the start date of the contract. The duration of each contract is 24 hours or less and provides the same rate of payment upon renewal. Since the pricing remains the same upon contract renewal, the contract does not provide the applicable mining pool operator with a material right that represents a separate performance obligation. The fair value is based on Greenidge’s primary exchange of the related cryptocurrency which is considered to be Coinbase. The consideration Greenidge earns is variable since it is based on the amount of hash computations provided by both Greenidge and the bitcoin network as a whole. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception.

Engineering Procurement and Construction Management ("EPCM") Revenue

The Company has entered into contracts with customers to perform engineering procurement and construction management services for customers developing cryptocurrency mining facilities. The services defined in the contracts are generally separated into phases, being 1) engineering 2) construction and 3) procurement.

While the services discussed above are capable of being distinct and separately identifiable, the Company concluded that the services provided are inputs to produce the combined output to the customer, which is the completed site buildout. Further, the services provided are significantly modified by the other services in the contract. As such, while the performance obligations may be capable of being distinct, they are not distinct in the context of the contract and therefore the promises in the contract are combined into one single performance obligation.

The Company recognizes EPCM revenue over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. The Company utilizes the percentage-of-completion method, based primarily on contract cost incurred to date compared to total estimated contract cost. The percentage-of-completion method, and input method, is used as management considers it to be the best available measure of progress on these contracts.

To the extent a contract is cancelled, the Company assesses whether there are any remaining goods or services to be provided after cancellation. If there are any remaining goods or services to be provided, the Company follows the guidance under ASC 606 for contract modifications. If there are no remaining goods or services to be provided, the Company considers whether consideration received is refundable or nonrefundable. To the extent consideration received is refundable, the Company recognizes a refund liability, otherwise, it recognizes revenue for the consideration received.

Recent Accounting Pronouncements, Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities' segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition of other segment items, and interim disclosures of a reportable segment's profit or loss and assets. This guidance becomes effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and is required to be applied retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"), which is intended to improve the accounting for and disclosure of crypto assets. ASU 2023-08 requires entities that hold assets that meet certain criteria to measure those assets at fair value with changes recognized in net income each reporting period. The guidance also requires entities to (1) present crypto assets separately from other intangible assets in its balance sheet and (2) changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. Additionally, the guidance requires entities to disclose in their annual and interim reports certain information of each significant crypto asset and in their annual interim report, a rollforward of activity during the reporting period, differences between disposal price and cost basis for dispositions, gain and losses to the extent they are not presented separately and the entity's method for determining the cost basis. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure. ASU 2023-09 mostly requires, on an annual basis, disclosure of specific categories in an entity's effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. The incremental disclosures may be presented on a prospective or retrospective basis. The ASU is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and disclosures.

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.

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.

Major classes of assets and liabilities consist of the following:


$ in thousands	March 31, 2024		December 31, 2023
Assets:
Prepaid expenses and other current assets	$	38	$	47
Current assets held for sale	38		47

Other assets	457		454
Long-term assets held for sale	457		454
Loss on classification to held for sale	(495)		(501)
Assets held for sale	—		—

Liabilities:
Accounts payable	18		21
Accrued expenses	303		462
Current liabilities held for sale	$	321	$	483

Financial results from discontinued operations consist of the following:


	Three Months Ended March 31,
$ in thousands	2024		2023
Revenue	$	—	$	2,121
Cost of revenue - services and other (exclusive of depreciation and amortization)	—		(1,894)

Selling, general and administrative	79		(1,217)

Gain on asset disposal	—		3,399
Gain (loss) on assets classified as held for sale	6		(1,735)
Other income (loss), net	9		(3)


Income from discontinued operations, net of tax	$	94	$	671

The Company’s effective income tax rate from discontinued operations for the three months ended March 31, 2024 and 2023 was 0% and 0%, respectively.

4. PROPERTY AND EQUIPMENT

Property and equipment, net consisted of the following at March 31, 2024 and December 31, 2023:


$ in thousands	Estimated Useful Lives	March 31, 2024		December 31, 2023
Plant infrastructure	10 years	$	1,367	$	1,367
Miners	3 years	$	32,026	$	32,195
Miner facility infrastructure	10 years	8,154		8,154
Land	N/A	7,679		7,679
Equipment	5 years	45		45


Construction in process	N/A	6,592		6,229

		55,863		55,669
Less: Accumulated depreciation		(13,808)		(10,574)
		$	42,055	$	45,095

Total depreciation expense was $3.2 million and $3.8 million for the three months ended March 31, 2024 and 2023, respectively.

On January 30, 2023, Greenidge entered into an agreement regarding its 2021 and 2022 Master Equipment Finance Agreements with NYDIG. During the three months ended March 31, 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. The Company recognized a gain on the sale of assets of $1.2 million, which relates to the sale of bitcoin miner manufacturer coupons that were transferred as part of the debt restructuring agreement with NYDIG.

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		March 31, 2024		December 31, 2023
Senior Unsecured Notes	October 2021/December 2021	October 2026	8.5	%	$	72,200	72,200		72,200
Total Debt							72,200		72,200
Less: Debt discount and issue costs							(3,229)		(3,490)
Total debt at book value							68,971		68,710
Less: Current portion							—		—
Long-term debt, net of current portion and deferred financing fees							$	68,971	$	68,710

The Company incurred interest expense of $1.8 million during the three months ended March 31, 2024 under the terms of these notes payable. The Company incurred interest expense of $3.6 million during the three months ended March 31, 2023 under the terms of these notes payable and other financings that were extinguished during the year ended December 31, 2023.

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 March 31, 2024 were as follows:


$ in thousands
Remainder of 2024	$	—
2025	—
2026	72,200
2027	—
2028	—
Total	$	72,200

Fair Value Disclosure

The notional value and estimated fair value of the Company's debt totaled $72.2 million and $27.7 million, respectively at March 31, 2024 and $72.2 million and $29.3 million, respectively at December 31, 2023. The notional value does not include unamortized discounts and debt issuance costs of $3.2 million and $3.5 million at March 31, 2024 and December 31, 2023, respectively. The estimated fair value of the senior unsecured notes, representing the fair value of the Company's 8.50% senior secured notes due October 2026, was measured using quoted market prices at the reporting date. Such instruments were valued using Level 1 inputs.

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 (loss) 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 (In thousands, except per share data):


	Three Months Ended March 31,
	2024		2023
Numerator
Net loss from continuing operations	$	(4,038)	$	(8,842)
Income from discontinued operations, net of tax	94		671
Net loss	$	(3,944)	$	(8,171)
Denominator
Basic weighted average shares outstanding	9,494		5,343
Effect of dilutive securities	—		—

Diluted weighted average shares outstanding	9,494		5,343

Net loss per share, basic and diluted:
Net loss per share from continuing operations, basic and diluted	$	(0.43)	$	(1.66)
Income per share from discontinued operations, basic and diluted	0.01		0.13
Net loss per share, basic and diluted	$	(0.42)	$	(1.53)

For the three months ended March 31, 2024 and 2023, because the Company was in a loss position, basic net loss per share is the same as diluted net loss per share, as the inclusion of the potential common shares would have been anti-dilutive.

The following table sets forth potential shares of common stock that are not included in the diluted net loss per share calculation because to do so would be anti-dilutive for the period indicated (in thousands):


	Three Months Ended March 31,
Anti-dilutive securities	2024	2023
Restricted stock awards	132	15
Common shares issuable upon exercise of stock options	458	364
Common shares issuable upon exercise of warrants	2,251	—
Total	2,841	379

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 three months ended March 31, 2024, 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.

RSAs and RSUs

Restricted stock awards ("RSA") are generally granted with an eligible vesting range from upon grant to over a three-year period. Restricted stock unit ("RSU") awards are generally eligible to vest over a three-year period.

The Company’s unvested RSA and RSU award activity for the three months ended March 31, 2024 is summarized below:


	RSAs & RSUs	Weighted Average Grant Date Fair Value
Unvested at December 31, 2023	9,116	$	62.99
Granted	247,469	$	4.32
Vested	(124,495)	$	9.14
Unvested at March 31, 2024	132,090	$	3.79

The value of RSA and RSU grants are measured based on their fair market value on the date of grant and amortized over their requisite service periods. The fair market value of the awards granted totaled $1.1 million for the three months ended March 31, 2024. There were no grants awarded during the three months ended March 31, 2023. At March 31, 2024, there was approximately $0.4 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 approximately 1.7 years.

Common Stock Options

The Company’s common stock options activity for the three months ended March 31, 2024 is summarized below:


	Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2023	458,982	$	16.59


Forfeited	(266)	$	62.50
Expired	(535)	$	64.83
Outstanding at March 31, 2024	458,181	$	16.51	8.59	$	—
Exercisable as of March 31, 2024	152,193	$	28.25	7.99	$	—

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 March 31, 2024, there was approximately $2.0 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 1.9 years.

Stock-Based Compensation

The Company recognized stock-based compensation expense of $1.1 million and $0.5 million during the three months ended March 31, 2024 and 2023, respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

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 months ended March 31, 2024 was 0.0% 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, 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 ended March 31, 2024.

The effective tax rate for the three months ended March 31, 2023 was 0.0% which was lower than the statutory rate of 21% 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' DEFICIT

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 March 31, 2024, Greenidge issued 549,285 shares of Class A common stock to the Investor pursuant to the Equity Purchase Agreement for aggregate proceeds of $8.0 million, net of discounts, of which there were 45,269 shares issued for aggregate proceeds of $0.3 million, net of discounts, during the three months ended March 31, 2024.

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 3.0% 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 May 15, 2024, Greenidge issued 4,167,463 shares under the ATM Agreement for net proceeds of $20.7 million, of which no shares were issued for the three months ended March 31, 2024.

Armistice Capital Agreement

On February 12, 2024, the Company entered into a securities purchase agreement (the “SPA”) with Armistice Capital Master Fund Ltd. (“Armistice”). Pursuant to the SPA, Armistice purchased (i) 450,300 shares (the “Shares”) of the Company’s Class A common stock, and (ii) a pre-funded Class A common stock purchase warrant (the “Pre-Funded Warrant”) for 810,205 shares of the Company’s Class A common stock (the “Pre-Funded Warrant Shares”). The per share purchase price of the Shares and the Pre-Funded Warrant Shares was $4.76, resulting in aggregate gross proceeds of $6.0 million, and after giving effect to the exercise price of $0.0001 per Pre-Funded Warrant Share, the Company received net proceeds of $6.0 million. The Pre-Funded Warrant has an initial exercise date of February 14, 2024 and gives Armistice the right to acquire the Pre-Funded Warrant Shares, subject to limitations and conditions as set forth in the Pre-Funded Warrant, until it is exercised in full. In addition, the Company issued to Armistice a five (5) year Class A common stock purchase warrant entitling Armistice, commencing on August 14, 2024, to acquire up to 1,260,505 shares of the Company’s Class A common stock from time to time at an exercise price of $5.25 per share (the “Warrant Shares”).

The pre-funded and common stock warrants were classified as a component of permanent stockholders' equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The Company valued the pre-funded warrant at issuance, concluding that its sale price approximated their fair value, and allocated the aggregate net proceeds from the sale proportionately to the common stock and pre-funded warrant, including approximately $2.0 million allocated to the pre-funded warrant and recorded as a component of additional paid-in capital. The Company valued the common stock warrant using the Black-Scholes-Merton option pricing model and recorded as a component of additional paid-in capital with an allocated amount of $2.8 million. By analogy to ASC 505-20-30-3, the Company would have recorded a charge to retained earnings, however, as the Company is in a deficit position it recorded as a component of additional paid-in capital.

Warrants

The following table summarizes the Company's warrant activity:


	Number of warrants	Weighted Average Exercise Price
Warrants outstanding at December 31, 2023	180,000	$	7.00
Issued	2,070,710	3.20
Warrants outstanding at March 31, 2024	2,250,710	$	3.50

The following table summarizes information about warrants outstanding at March 31, 2024:


	Number of Warrants Outstanding	Number of Warrants Exercisable	Exercise Price		Expiration Date
December 2023 Warrants	180,000	180,000	$	7.00	December 11, 2024
February 2024 Pre-Funded Warrants	810,205	810,205	$	0.0001	Until exercised
February 2024 Warrants	1,260,505	—	$	5.25	August 14, 2029
	2,250,710	990,205

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, the Company has a liability of $17.3 million as of March 31, 2024 and December 31, 2023. CCRs are subject to federal and state requirements. In October 2023, the Company completed the necessary steps to officially cease use of the coal ash pond. Following this occurring, the Company is required to complete the remediation of the coal ash pond CCR by November 2028 and will perform the work in stages over the next five years. 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, Environmental Obligations ("ASC 410-30"), the Company has recorded an environmental liability of $12.9 million as of March 31, 2024 and December 31, 2023. 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 2.4%.

Commitments

The Company entered into a contract with Empire Pipeline Incorporated in September 2020 which 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 47% and 46% of the company's revenue during the three months ended March 31, 2024 and 2023, respectively.

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 36% and 34% of total revenue for the three months ended March 31, 2024 and 2023, respectively.

The Company has one major power customer, NYISO, that accounted for 16% and 12% of its revenue for the three months ended March 31, 2024 and 2023, respectively.

The Company has one natural gas vendor that accounted for approximately 45% and 42% of cost of revenue for the three months ended March 31, 2024 and 2023, respectively.

The Company has one major provider of hosting services for its self-mining operation that accounted for approximately 23% of cost of revenue for the three months ended March 31, 2024. There were no hosting services for the self-mining operation for the three months ended March 31, 2023.

12. RELATED PARTY TRANSACTIONS

Letters of Credit

Atlas obtained a letter of credit from a financial institution in the amount of $5.0 million at March 31, 2024 and December 31, 2023, payable to the NYSDEC. This letter of credit guarantees the current value of the Company’s landfill environmental trust liability. See Note 10, "Commitments and Contingencies" for further details.

Atlas also has a letter of credit from a financial institution in the amount of $3.6 million at March 31, 2024 and December 31, 2023, 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").

Mississippi Expansion

On April 10, 2024, we closed on the purchase of a parcel of land containing approximately 12 acres located in Columbus, Mississippi, including over 73,000 square feet of industrial warehouse space, from a subsidiary of Motus Pivot Inc., a portfolio company of Atlas, our controlling shareholder and a related party. The purchase price was $1.45 million, of which $500,000 is to be paid no later than 60 days after the closing and $350,000 is to be paid no later than 120 days after the closing, This property provides us with access to 32.5 MW of additional power capacity. The transaction closed in April 2024 and we deployed 7 MW of miners on the property in the second quarter of 2024.

Other

Affiliates of Atlas from time to time incur certain costs for the benefit of Greenidge, including for the maintenance of certain aforementioned letters of credit, which are fully reimbursed by Greenidge. Greenidge did not reimburse Atlas or its affiliates for any such costs during the quarter ended March 31, 2024.

13. SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION


$ in thousands	March 31, 2024		December 31, 2023
Prepaid expenses:
Electric deposits	$	273	$	—
Prepaid insurance	1,697		2,818
Warrant Asset	57		477
Other	791		569
Total	$	2,818	$	3,864

Accrued expenses:
Accrued interest	$	1,026	$	1,026
Other	3,240		5,090
Total	$	4,266	$	6,116

Greenidge had the following noncash investing and financing activities:


	Three Months Ended March 31,
$ in thousands	2024	2023
Property and equipment purchases in accounts payable	224	751
Common stock issued for amendment fee to lender	—	1,000
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	—	680

The following table provides supplemental cash flow information for cash paid for interest:


	Three Months Ended March 31,
$ in thousands	2024		2023
Cash paid for interest	$	1,534	$	1,696

14. DIGITAL ASSETS

The following table presents our bitcoin activities for the three months ended March 31, 2024:


Balance at December 31, 2023	$	347
Revenues from digital asset production	6,999
Sale of digital assets	(7,104)
Gain on sale of digital assets	59
Digital Assets at March 31, 2024	$	301

15. FAIR VALUE

The Company follows the guidance in ASC Topic 820, Fair Value Measurement. For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy based upon observable and unobservable inputs is used to arrive at fair value. The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

•Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

•Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

•Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

As of March 31, 2024, and December 31, 2023, the carrying amount of accounts receivable, prepaid expenses and other assets, income tax receivable, emissions and carbon offset credits, income tax receivable, accounts payable, accrued

expenses, accrued emissions expense, and other short-term liabilities approximated their fair value due to their relatively short maturities.

The following tables present information about the Company's assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):


	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Prepaid expenses and current other assets:
Warrant asset	$	—	$	—	$	477	$	477


	As of March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Prepaid expenses and current other assets:
Warrant asset	$	—	$	—	$	57	$	57

Warrant Asset

The fair value of the warrant asset was estimated by utilizing a Black-Scholes-Merton option pricing model. The inputs into the Black-Scholes-Merton option pricing model included significant unobservable inputs. The following table provides quantitative information regarding the Level 3 fair value inputs:


	March 31, 2024			December 31, 2023
Stock Price	$	3.10		$	4.83
Risk-free interest rate	5.21		%	5.14		%
Volatility	67.09		%	172.64		%
Remaining term (in years)	0.75			1.00
Expected dividend yield	—		%	—		%

Assets Measured on a Nonrecurring Basis

Assets that are measured at fair value on a nonrecurring basis are remeasured when carrying value exceeds fair value. This includes the evaluation of long-lived assets. Where an indication of an impairment exists, the Company's estimates of fair value of long-lived assets require the use of significant unobservable inputs, representative of Level 3 fair value measurements, including numerous assumptions with respect to future circumstances that might impact the long-lived assets' operations in the future and are therefore uncertain.

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.

During the three months ended March 31, 2024, the Company recognized an impairment charge of $0.2 million of property and equipment, net. There were no impairment charges for the three months ended March 31, 2023.

16. SUBSEQUENT EVENTS

Subsequent events have been evaluated through May 15, 2024, 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.

Mississippi Expansion

On April 10, 2024, a subsidiary of the Company entered into a Commercial Purchase and Sale Agreement (the “Motus Agreement”) with a subsidiary of Motus Pivot Inc., a Delaware corporation ("Motus"), pursuant to which the Company has agreed to purchase from Motus a parcel of land containing approximately 12 acres located in Columbus, Mississippi, including over 73,000 square feet of industrial warehouse space (the “Property”). The purchase price for the Property is $1.45 million (the “Purchase Price”), which the Company expects to finance with cash on hand. As such, financing the transaction with cash on hand will impact the Company's liquidity and capital resources. Motus is a portfolio company of private investment funds managed by Atlas Holdings LLC (“Atlas”), a related party of the Company. Greenidge’s controlling shareholder consists of certain funds associated with Atlas. Under the terms of the Motus Agreement, Greenidge will deposit $50 thousand in escrow, with such amount to be applied at closing to the Purchase Price. The Motus Agreement contains customary representations, warranties and covenants of the parties and closing conditions as well as other customary provisions.

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, 2023 and 2022 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 months ended March 31, 2024 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, 2023 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"), the Town of Columbia, Mississippi (the "Mississippi Facility") owned and operated a facility in Spartanburg, South Carolina (the "South Carolina Facility") and lease property for purposes of operating a cryptocurrency datacenter in the Town of Underwood, North Dakota (the "North Dakota Facility" and, together with the New York Facility, Mississippi Facility, and South Carolina 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 four primary sources: (1) datacenter hosting, which we commenced on January 30, 2023, (2) cryptocurrency mining, (3) power and capacity, and (4) engineering procurement and construction management.

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. 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.

Our datacenter operations consisted of approximately 42,300 miners with approximately 4.6 EH/s of combined capacity for both datacenter hosting and cryptocurrency mining, of which 32,100 miners, or 3.4 EH/s, were associated with datacenter hosting and 10,200 miners, or 1.2 EH/s, were associated with Greenidge's cryptocurrency mining. Subsequent to the South Carolina transaction, datacenter operations consists of approximately 28,800 miners with approximately 3.0 EH/S of combined capacity for both datacenter hosting and cryptocurrency mining, of which 18,100 miners or 1.8 EH/s, is associated with datacenter hosting and 10,700 miners, or 1.2 EH/s is associated with our cryptocurrency mining.

Recent Developments

On February 12, 2024, we entered into a securities purchase agreement (the “SPA”) with Armistice Capital Master Fund Ltd. (“Armistice”). Pursuant to the SPA, Armistice purchased (i) 450,300 shares of our Class A common stock (the “SPA Shares”), and (ii) a pre-funded warrant (the “Pre-Funded Warrant”) to purchase 810,205 shares of our Class A common stock (the “Pre-Funded Warrant Shares”). The per share purchase price of the SPA Shares and the Pre-Funded Warrant Shares was $4.76, resulting in proceeds of $6.0 million. In addition, we issued to Armistice a five-year warrant (the “5-Year Warrant”) to purchase up to 1,260,505 shares of Class A common stock (the "Warrant Shares"), exercisable commencing on August 14, 2024 at an exercise price of $5.25 per share.

Pursuant to the SPA, filed a resale registration statement with the SEC covering the SPA Shares, the Pre-Funded Warrant Shares, and the Warrant Shares.

The SPA Shares and the shares of Class A common stock issuable pursuant to the Pre-Funded Warrant and the 5-Year Warrant were offered and sold in a transaction exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act. Armistice represented to the Company in the SPA that it is an “accredited investor,” as defined in Rule 501(a) of Regulation D under the Securities Act.

after the closing, This property provides us with access to 32.5 MW of additional power capacity. The transaction closed in April 2024 and we deployed 7 MW of miners on the property in the second quarter of 2024. We have also deployed additional miners in conjunction with a 7.5 MW mining capacity lease in North Dakota, which has a term of five years and provides us with energy to power mining.

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 mining, datacenter hosting and power generation operations. See Note 3, "Discontinued Operations" of our unaudited condensed consolidated financial statements for additional information.

Growth Opportunities

We view our growth opportunities as primarily related to the following areas:

•Acquisition of properties with low-cost power

•Development of owned properties for artificial intelligence ("AI")/graphics processing unit ("GPU") data center, bitcoin self-mining and bitcoin hosting

•Sale of owned properties for AI/GPU data center construction

•Infrastructure services and development for AI and high-performance computing ("HPC")

•Purchase and deployment of GPUs for AI and HPC

•Engineering Procurement and Construction Management (“EPCM”) contracts

•Purchase and deployment of high efficiency bitcoin mining rigs

•Hosting services for bitcoin mining

•Acquisition of private bitcoin mining companies

The Company is actively pursuing the acquisition of additional properties with access to low-cost power and appropriate size to allow for efficient expansion of AI/GPU data centers and/or bitcoin mining facilities, such as the Columbus property. The growth of AI and HPC will provide significant demand for development of future data centers utilizing large amounts of energy. We currently have significant infrastructure on hand to reduce the cost of site development for various future projects. All current and future properties will be simultaneously evaluated for internal development or outright sales.

The Company is in the process of purchasing GPUs for a pilot program related to the rental of computing power for AI and HPC. We are utilizing the pilot program to ensure our investments in the AI/GPU data center space efficiently utilize capital to align with the anticipated growth and demand for our offerings.

The Company is continuing to develop and market its EPCM services in order to provide greater short-term growth. We believe feedback from previous and current clients has shown that we offer a superior product with respect to the development of bitcoin mining facilities.

We will also continue to evaluate the benefits of finding accretive acquisitions, specifically in the bitcoin mining sector.

Title V Air Permit

In late June 2022, the New York State Department of Environmental Conservation (“NYSDEC”) announced its denial of the Title V Air Permit renewal for our New York Facility. We filed a notice with NYSDEC in July 2022 requesting a hearing on NYSDEC’s decision. In September 2023, the administrative law judge presiding over the hearing issued a ruling with respect to the status of the parties and certain issues to be adjudicated in the hearing. We submitted an interim appeal with NYSDEC thereafter challenging such ruling with a motion to stay the broader appeals process while the interim appeal was being resolved. On May 8, 2024, our interim appeal to NYSDEC and request for an adjudicatory hearing were ultimately denied, and the June 2022 non-renewal of our Title V Air Permit was affirmed by NYSDEC's Regional Director for Region 7, which rendered NYSDEC's decision final for purposes of seeking judicial review. We have four months from May 8, 2024 to continue to operate the New York Facility uninterrupted under a State Administrative Procedures Act extension, in full compliance with our existing Title V Air Permit, and to bring an action challenging the denial of our permit renewal application. While no further adjudication proceedings have been scheduled to date, we intend to

challenge the June 2022 non-renewal and simultaneously bring a request for temporary restraining order/preliminary injunction to allow the New York Facility to continue operating during the pendency of the litigation. This challenge will cause us to incur additional costs and result in the diversion of management attention, which could adversely affect our business, financial condition and results of operations. We expect that the judicial proceedings related to the challenge of NYSDEC's denial of our Title V Air Permit renewal application may take a number of years to fully resolve, and there can be no assurance that our efforts will be successful. Our inability to secure a temporary restraining order or preliminary injunction to allow the New York Facility to continue operating during the pendency of the litigation or to otherwise succeed in securing a renewal of our Title V Air Permit for the New York Facility could have a material adverse effect on us and our ability to continue operating as a going concern. See Note 2, “Summary of Significant Accounting Policies,” in the Notes to Condensed Consolidated Financial Statements.

Results from Continuing Operations - Three Months Ended March 31, 2024

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 March 31, 2024 versus the three months ended March 31, 2023, unless otherwise specified.


	Three Months Ended March 31,						Variance
	2024			2023			$		%
REVENUE:
Datacenter hosting	$	9,112		$	6,944		$	2,168	31	%
Cryptocurrency mining revenue	6,999			6,451			548		9	%
Power and capacity	3,037			1,762			1,275		72	%
EPCM consulting services	185			—			185		N/A
Total revenue	19,333			15,157			4,176		28	%
OPERATING COSTS AND EXPENSES:
Cost of revenue (exclusive of depreciation)	12,318			9,735			2,583		27	%
Selling, general and administrative	5,487			9,013			(3,526)		(39)	%
Depreciation	3,234			3,820			(586)		(15)	%

Impairment of long-lived assets	169			—			169		N/A
Gain on sale of assets	—			(1,744)			1,744		(100)	%

Total operating costs and expenses	21,208			20,824			384		2	%
Operating loss	(1,875)			(5,667)			3,792		(67)	%
OTHER INCOME (EXPENSE), NET:
Interest expense, net	(1,802)			(3,573)			1,771		(50)	%
Gain on sale of digital assets	59			398			(339)		(85)	%
Change in fair value of warrant asset	(420)			—			(420)		N/A

Total other expense, net	(2,163)			(3,175)			1,012		(32)	%
Loss from continuing operations before income taxes	(4,038)			(8,842)			4,804		(54)	%
Benefit from income taxes	—			—			—		N/A
Net loss from continuing operations	$	(4,038)		$	(8,842)		$	4,804	(54)	%

Adjusted Amounts (a)
Adjusted operating (loss) income from continuing operations	$	(1,286)		$	(5,794)		$	4,508	(78)	%
Adjusted operating margin from continuing operations	(6.7)		%	(38.2)		%
Adjusted net loss from continuing operations	$	(3,449)		$	(8,969)		$	5,520	(62)	%
Other Financial Data (a)
EBITDA (loss) from continuing operations	$	998		$	(1,449)		$	2,447	(169)	%
as a percent of revenues	5.2		%	(9.6)		%
Adjusted EBITDA (loss) from continuing operations	$	2,657		$	(1,095)		$	3,752	(343)	%
as a percent of revenues	13.7		%	(7.2)		%

(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 March 31, 2024 and 2023.


	Three Months Ended March 31,						Variance
$ in thousands, except $ per MWh and average bitcoin price	2024			2023			$		%
Revenue
Datacenter hosting revenue	$	9,112		$	6,944		$	2,168	31	%
Cryptocurrency mining revenue	$	6,999		6,451			548		8	%
Power and capacity	3,037			1,762			1,275		72	%
EPCM consulting services	185			—			185		N/A
Total revenue	$	19,333		$	15,157		$	4,176	28	%
Components of revenue as % of total
Datacenter hosting	47		%	46		%
Cryptocurrency mining	36		%	42		%
Power and capacity	16		%	12		%
EPCM consulting services	1		%	—		%
Total revenue	100		%	100		%
MWh
Datacenter hosting	110,315			90,979			19,336		21	%
Cryptocurrency mining	46,902			59,633			(12,731)		(21)	%
Power and capacity	47,435			30,192			17,243		57	%
Revenue per MWh
Datacenter hosting	$	83		$	76		$	7	9	%
Cryptocurrency mining	$	149		$	108		$	41	38	%
Power and capacity	$	64		$	58		$	6	10	%
Cost of revenue (exclusive of depreciation)
Datacenter hosting	$	7,018		$	4,671		$	2,347	50	%
Cryptocurrency mining	$	3,671		$	3,248		$	423	13	%
Power and capacity	$	1,546		$	1,816		$	(270)	(15)	%
EPCM consulting services	$	83		$	—		$	83	N/A
Cost of revenue per MWh (exclusive of depreciation)
Datacenter hosting	$	64		$	51		$	13	25	%
Cryptocurrency mining	$	78		$	54		$	24	44	%
Power and capacity	$	33		$	60		$	(27)	(45)	%
Cryptocurrency Mining Metrics
Bitcoins produced:
Datacenter hosting	275			393			(118)		(30)	%
Cryptocurrency mining	134			305			(171)		(56)	%
Total bitcoins produced	409			698			(289)		(41)	%

Average bitcoin price	$	53,260		$	22,877		$	30,383	133	%



Average active hash rate (EH/s) Company-owned miners	846,840			998,702			(151,862)		(15)	%
Average active hash rate (EH/s) Hosted miners	1,736,730			1,429,225			307,505		22	%
Average difficulty	77.4 T			40.2 T			37.2 T		93	%

Revenue

On January 30, 2023, upon entering into the NYDIG Hosting Agreement, we transitioned the 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. At March 31, 2024, Greenidge datacenter operations consisted of approximately 28,800 miners with approximately 3.0 EH/s of combined capacity for both datacenter hosting and cryptocurrency mining, of which 18,100 miners, or 1.8 EH/s, is associated with datacenter hosting and 10,700 miners, or 1.2 EH/s, is associated with Greenidge's cryptocurrency mining.

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 or leased by the Company. Our cryptocurrency mining revenue increased $0.5 million, or 9%, to $7.0 million. We estimate that approximately 69% of the increase was due to the increase in the average price of bitcoin, which was partially offset by 52% as a result of the decrease in the global bitcoin mining difficulty factor and 9% as a result of the decline in the Greenidge mining hashrate due to the transition of capacity to hosting during the course of Q1 2023. Bitcoin mining difficulty was 93% higher compared to the prior year 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 133% higher and our average hash rate decreased 15% primarily related to the reallocation of our mining equipment to datacenter hosting services.

The miners associated with Greenidge’s cryptocurrency mining were comprised as follows:


Vendor and Model									Number of Miners
Bitmain S19									4,000
Bitmain S19 Pro									2,000
Bitmain S19j Pro									900
Bitmain S19 XP									3,600
Bitmain S19 Hydro									200
									10,700

As of March 31, 2024, our fleet of miners ranged in age from 1.0 to 2.6 years and had an average age of approximately 1.85 years. We do not have scheduled downtime for our miners. When we have unscheduled downtime, we may from time to time replace a miner with a substitute miner in order to minimize overall fleet downtime. As of March 31, 2024, our fleet of miners ranged in efficiency from approximately 22.0 to 34.0 joules per terahash (“J/TH”) and had an average efficiency of 28.7 J/TH.

The table below presents the average cost of mining each bitcoin for the year ended March 31, 2024:


Cost of Mining - Analysis of Costs to Mine One Bitcoin	Three Months Ended March 31, 2024
Cost to mine one bitcoin(1)	$	27,396
Value of each bitcoin mined(2)	$	52,231
Cost to mine one bitcoin as % of value of bitcoin mined	52.5		%

(1) Computed as cost of revenue of cryptocurrency mining divided by number of bitcoins produced from cryptocurrency mining.

(2) Computed as cryptocurrency mining revenue divided by number of bitcoins produced from 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 Agreement, 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 substantially all of our current mining capacity at the New York Facility and South Carolina Facility. We generated revenue of $9.1 million for the first three months of 2024 and $6.9 million for the first three months of 2023. This increase of $2.2 million was mainly due to datacenter hosting services not starting until the very end of January in 2023. In addition, we managed approximately 1.7 EH/s of average active hash rate in our hosting services, of which produced approximately 275 bitcoins.

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 increased $1.3 million, or 72%, to $3.0 million during the three months ended March 31, 2024. We estimate that higher power and capacity sales volume due to our decreased behind-the-meter consumption and higher average power and capacity prices caused revenue increases of approximately 57% and 15%, respectively, as compared to the prior period.

Cost of revenue (exclusive of depreciation)


	Three Months Ended March 31,						Variance
	2024			2023			$		%
Datacenter hosting	$	7,018		$	4,671		$	2,347	50	%
Cryptocurrency mining	3,671			3,248			423		13	%
Power and capacity	1,546			1,816			(270)		(15)	%
EPCM consulting services	83			—			83		N/A
Total cost of revenue (exclusive of depreciation)	$	12,318		$	9,735		$	2,583	27	%
As a percentage of total revenue	63.7		%	64.2		%

Total cost of revenue, exclusive of depreciation, increased $2.6 million, or 27%, to $12.3 million during the three months ended March 31, 2024 as compared to the prior year period. We estimate the increase is comprised of approximately 20% due to monthly hosting fees paid to third parties for hosting company owned miners, which was an expense that did not occur for the full first quarter of 2023, and further increased by 14% for natural gas costs due to forward purchases of gas at fixed prices for Datacenter Hosting. This was partially offset by 7% due to decreases in sales tax on gas.

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 declined due to lower natural gas costs, while MWh utilized by cryptocurrency mining declined due to the transition to the Hosting Agreements during the three months ended March 31, 2024.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased $3.5 million, or 39%, to $5.5 million for the three months ended March 31, 2024 as compared to the prior year period. The main drivers of the decrease in selling, general and administrative expenses were:

•Decrease of approximately $2.1 million due to reductions in professional fees and consulting expenses caused by reductions in discretionary costs and higher regulatory costs in the prior year period associated with permit renewals and environmental matters at the New York plant; and

•Total payroll and benefits and other employee costs decreased approximately $1.1 million in first quarter of 2024 compared to the prior year period, as a result of declines in employee expenses including incentive compensation; and

•Total insurance expense decreased approximately $0.4 million in the first quarter of 2024 compared to the prior year period, as a result of declines in coverage costs related to umbrella, property, and liability policies

Depreciation

Depreciation expense decreased $0.6 million, or 15%, to $3.2 million for the three months ended March 31, 2024 as compared to the prior year period, due to a lower asset base resulting from impairments recognized in 2023 and the sale of miners in during the first quarter of 2023.

Operating (loss) income from continuing operations

We reported an operating loss for the three months ended March 31, 2024 of $1.9 million compared with an operating loss of $5.7 million in the three months ended March 31, 2023. The favorable variance of $3.8 million is primarily related to higher revenue, in the aggregate, from hosting, mining, and power operations, along with additional cost savings related to selling, general, and administrative expenses. These favorable variances were partially offset by increases in cost of revenue, exclusive of depreciation.

Adjusted loss from operations was $1.3 million for the three months ended March 31, 2024 as compared to adjusted loss from operations of $5.8 million in the three months ended March 31, 2023. The adjusted loss from operations was driven by the same factors described above impacting loss from operations. A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliations" section of this MD&A.

Total other expense, net

During the three months ended March 31, 2024, Greenidge incurred a decrease of $1.0 million, or 32%, to $2.2 million of other expense due to a reduction in interest expense of $1.8 million, partially offset by a lower gain on sale of digital assets of $0.3 million and a change in fair value of warrant asset of $0.4 million.

Benefit from income taxes

Our effective tax rate for the three months ended March 31, 2024 was 0.0% which was lower than the statutory rate of 21% because we have a full valuation allowance on deferred tax assets. We recorded and will continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. Our effective tax rate for the three months ended March 31, 2023 was 0.0%, which was lower than the statutory rate of 21% primarily due to state income taxes and tax benefits associated with stock-based compensation.

Net loss from continuing operations

As a result of the factors described above, Greenidge incurred a net loss of $4.0 million for the three months ended March 31, 2024 as compared to a net loss of $8.8 million for the three months ended March 31, 2023.

On an adjusted basis, excluding the impact of a gain on sale of assets, debt restructure costs and expansions costs, adjusted net loss during the three months ended March 31, 2024 would have been $3.4 million as compared to $9.0 million in the same period in 2023. Adjusted net loss is a non-GAAP performance measure. A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliations" section of this MD&A.

Income from discontinued operations

We have reported the Support.com business as discontinued operations in the consolidated financial statements. Income from discontinued operations, net of tax decreased $0.6 million, or 86%, to $0.1 million for the three months ended March 31, 2024. The decrease is primarily related to lower operating income caused by the loss of Support.com's largest customer and the winding down of operations.

Non-GAAP Measures and Reconciliations

The following non-GAAP measures are intended to supplement investors’ understanding of our financial information by providing measures which investors, financial analysts and management use to help evaluate our operating performance. Items which we do not believe to be indicative of ongoing business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies. These results should be considered in addition to, not as a substitute for, results reported in accordance with United States Generally Accepted Accounting Principals ("U.S. GAAP").

EBITDA (loss) from continuing operations and Adjusted EBITDA (loss) from continuing operations

"EBITDA from continuing operations" is defined as earnings from continuing operations before taxes, interest, and depreciation and amortization. "Adjusted EBITDA from continuing operations" is defined as EBITDA from continuing operations adjusted for stock-based compensation and other special items determined by management, including, but not limited to business expansion costs, gain on sale of assets and debt restructuring costs as they are not indicative of business operations. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, U.S. GAAP. Management believes that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating EBITDA and Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same fashion.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss (income) to EBITDA (loss) and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. The reported amounts in the table below are from our Unaudited Condensed Consolidated Statements of Operations in our Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.


	Three Months Ended March 31,						Variance
	2024			2023			$		%
Adjusted operating (loss) income from continuing operations
Operating (loss) income from continuing operations	$	(1,875)		$	(5,667)		$	3,792	(67)	%
Impairment of long-lived assets	169			—			169		N/A
Gain on sale of assets	—			(1,744)			1,744		(100)	%
Change in fair value of warrant asset	420			—			$	420	N/A
Debt restructuring costs	—			1,617			(1,617)		(100)	%
Adjusted operating (loss) income from continuing operations	$	(1,286)		$	(5,794)		$	4,508	(78)	%
Adjusted operating margin	(6.7		%)	(38.2		%)

Adjusted net loss from continuing operations
Net loss from continuing operations	$	(4,038)		$	(8,842)		$	4,804	(54)	%
Impairment of long-lived assets, after tax	169			—			169		N/A
Gain on sale of assets, after tax	—			(1,744)			1,744		(100)	%

Change in fair value of warrant asset, after tax	420			—			420		N/A
Debt restructuring costs, after tax	—			1,617			(1,617)		(100)	%
Adjusted net loss from continuing operations	$	(3,449)		$	(8,969)		$	5,520	(62)	%

EBITDA (loss) and Adjusted EBITDA (loss) from continuing operations
Net loss from continuing operations	$	(4,038)		$	(8,842)		$	4,804	(54)	%

Interest expense, net	1,802			3,573			(1,771)		(50)	%
Depreciation	3,234			3,820			(586)		(15)	%
EBITDA (loss) from continuing operations	998			(1,449)			2,447		(169)	%
Stock-based compensation	1,070			481			589		122	%
Gain on sale of assets	—			(1,744)			1,744		(100)	%

Change in fair value of warrant asset	420			—			420		N/A
Debt restructuring costs	—			1,617			(1,617)		(100)	%
Impairment of long-lived assets	169			—			169		N/A
Adjusted EBITDA (loss) from continuing operations	$	2,657		$	(1,095)		$	3,752	(343)	%

Revenue per MWh for datacenter hosting, cryptocurrency mining and power and capacity are used by management to consider the extent to which we may generate electricity to either produce cryptocurrency or sell power to the New York wholesale power market. Cost of revenue (excluding depreciation) per MWh represents a measure of the cost of natural gas, emissions credits, payroll and benefits and other direct production costs associated with the MWhs produced to generate the respective revenue category for each MWh utilized. Depreciation expense is excluded from the cost of revenue (exclusive of depreciation) per MWh metric; therefore, not all cost of revenues for datacenter hosting, cryptocurrency mining and power and capacity are fully reflected. To the extent any other cryptocurrency datacenters are public or may go public, the cost of revenue (exclusive of depreciation) per MWh metric may not be comparable because some competitors may include depreciation in their cost of revenue figures.

Liquidity and Capital Resources

On March 31, 2024, we had cash and cash equivalents of $14.3 million. To date, we have primarily relied on debt and equity financing to fund our operations, including meeting ongoing working capital needs. Our management took certain actions during 2023 and during the first quarter of 2024 to improve the Company's liquidity.

As discussed in Item 1, "Business—Corporate History and Structure" of our Annual Report on Form 10-K filed on April 10, 2023, we entered into a debt restructuring agreement with our primary lender, NYDIG. We restructured our debt by

transferring ownership of miners, previously secured by the MEFAs, under the Purchase Agreement along with the rights to credits and coupons to NYDIG and reduced our debt and accrued interest balance with NYDIG from $75.8 million to $17.3 million.

We also entered into the NYDIG Hosting Agreement with NYDIG affiliates. The terms of the NYDIG Hosting Agreement 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.

Additionally, we entered into the Promissory Note Amendment with B. Riley Commercial, which adjusted payments so that no principal and interest payments were required until June 2023, except for a requirement to repay principal using a portion of net proceeds from sales of equity, which was reduced from 65% to 15% of the net proceeds received. B. Riley Commercial and Atlas Holdings LLC each purchased $1 million of our Class A common stock pursuant to the ATM Agreement. In addition to the net proceeds from the sale of Class A common stock to B. Riley Commercial and Atlas Holdings LLC, during 2023, we received net proceeds of $20.6 million from sales of Class A common stock pursuant to the ATM Agreement. We repaid all $6.8 million of principal on the Secured Promissory Note during the year ended December 31, 2023.

In March 2023, we entered into the Conifex Hosting Agreement, in which Conifex agreed to provide hosting services to Greenidge utilizing renewable power. In April 2023, we entered into the Core Hosting Agreement with Core, in which Core agreed to host and operate Greenidge-owned bitcoin miners at its facilities. In addition, we installed approximately 2,200 of additional company-owned miners at our existing facilities. The installation of these miners at Conifex and Core facilities along with our facilities improved our profits and liquidity during the remainder of 2023 and beginning of 2024, and we expect these improvements to continue.

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, we completed an electrical upgrade at the South Carolina Facility increasing the capacity to 44 MW. Upon completion of this expansion, on August 10, 2023, we and NYDIG amended the NYDIG Hosting Agreement to increase the number of miners being hosted by Greenidge utilizing all of the expansion. The NYDIG Hosting Agreement was 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 22 acres of land on which the facilities are located. This deleveraging transaction with NYDIG closed on November 9, 2023. In exchange for the sale to NYDIG of the upgraded South Carolina mining facilities and the subdivided approximate 22 acres of land, Greenidge received total consideration of approximately $28 million:

•The remaining principal of approximately $17.7 million on our Senior Secured Loan with NYDIG, which we entered into on January 30, 2023, was extinguished;

•The remaining principal of approximately $4.1 million as of September 30, 2023, on our Secured Promissory Note in favor of B. Riley Commercial Capital, LLC, which we issued on March 18, 2022 and NYDIG purchased from B. Riley Commercial on July 20, 2023 at par, was extinguished;

•A cash payment of approximately $4.5 million; and

•A bonus payment of approximately $1.6 million as a result of the completion of the expansion of the upgraded mining facility and the facility's uptime performance.

In conjunction with the sale, the Company and NYDIG terminated the South Carolina Hosting Order. As a result, at the time of closing the Company returned NYDIG's security deposit, resulting in a cash outflow of $2.2 million. As a result of the sale, the Company received a cash inflow of $3.5 million from the return of its security deposit held by the local utility.

Additionally, the Company paid the remaining accrued interest on the Senior Secured Loan and Secured Promissory Note of $0.9 million. The Company also settled certain third party transaction costs and Greenidge's share of local taxes of $0.5 million.

Prior to the closing of the South Carolina Facility sale, the Company had a cash outflow of approximately $0.9 million related to the settlement of accounts payable related to the facility upgrade.

Following the completion of the South Carolina Facility sale, the Company continues to own approximately 153 acres of land in South Carolina, and is assessing potential uses of the remaining site, which may include the development or sale of the property. The NYDIG Hosting Agreement related to the New York Facility was not impacted by this transaction.

On December 11, 2023, we entered into an Equity Exchange Agreement (the “Equity Exchange Agreement”) with Infinite Reality, Inc. (“Infinite Reality”), pursuant to which, among other things, (i) we issued to Infinite Reality a one-year warrant to purchase 180,000 shares of our Class A common stock at an exercise price of $7.00 per share, the proceeds of which, upon exercise, are required to be used for the development of a proposed new data center contemplated by a Master Services Agreement entered into between us and Infinite Reality on December 11, 2023, and (ii) we issued 180,000 shares of our Class A common stock to Infinite Reality, which shares for purposes of the Equity Exchange Agreement, were valued at $8.33 per share, or an aggregate value of approximately $1.5 million. In addition, Infinite Realty issued to Greenidge a one-year common stock purchase warrant, pursuant to which we have the right to purchase up to 235,754 shares of common stock of Infinite Reality, par value $0.001 per share (“Infinite Reality Common Stock”), at an exercise price of $5.35 per share, and Infinite Reality issued to us 280,374 shares of Infinite Reality Common Stock.

We continued to improve our liquidity position in the first three months of 2024. On February 12, 2024, we entered into a securities purchase agreement (the “Armistice SPA”) with Armistice Capital Master Fund Ltd. (“Armistice”). Pursuant to the Armistice SPA, Armistice purchased (i) 450,300 shares of Class A common stock (the “SPA Shares”), and (ii) a pre-funded warrant (the “Pre-Funded Warrant”) to purchase 810,205 shares of Class A common stock (the “Pre-Funded Warrant Shares”). The per share purchase price of the SPA Shares and the Pre-Funded Warrant Shares was $4.76, resulting in aggregate gross proceeds of $6.0 million, and after giving effect to the exercise price of $0.0001 per Pre-Funded Warrant Share, we received net proceeds of $6.0 million. In addition, we issued to Armistice a five-year warrant to purchase up to 1,260,505 shares of Class A common stock, exercisable commencing on August 14, 2024 at an exercise price of $5.25 per share.

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 working capital needs and remaining debt servicing requirements. Management continues to assess different options to improve the Company's liquidity which include, but are not limited to:

•lowering the operating cost and increasing the profitability of the Company’s fleet of bitcoin mining, hosting, and power generation assets;

•monetizing the Company's remaining real estate in South Carolina via a development or sale arrangement;

•a sale of a portion of the Company’s unused electrical and mining infrastructure equipment assets; and

•issuances of equity.

Our operating cash flows generated by mining, hosting, and power are affected by several factors including the price of bitcoin, bitcoin mining difficulty, and the costs of electricity, natural gas, and emissions credits. While bitcoin prices began to recover during 2023 from the significant declines experienced in 2022, and have continued to rise in the first quarter of 2024, management cannot predict the future price of bitcoin, nor can we predict the volatility of energy costs. While the Company continues to work to implement options to improve liquidity, we can provide no assurance that these efforts will be successful and our liquidity could be negatively impacted by factors outside of our 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 Item 1A, "Risk Factors" in our Annual Report for the year ended December 31, 2023.

Given this uncertainty regarding our financial condition over the next 12 months from the date these financial statements were issued, we have concluded that there is substantial doubt about our 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.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations and other commitments at March 31, 2024, and the years in which these obligations are due:


$ in thousands	Total		2024		2025-2026		2027-2028		Thereafter
Debt payments	$	89,077	$	4,603	$	84,474	$	—	$	–
Leases	78		78		—		—		—

Environmental obligations	30,229		363		10,940		10,923		8,003
Natural gas transportation	12,324		1,422		3,792		3,792		3,318
Total	$	131,708	$	6,466	$	99,206	$	14,715	$	11,321

The debt payments included in the table above include the principal and interest amounts due. The lease payments include fixed monthly rental payments and exclude any variable payments. Environmental obligations are based on estimates subject to 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.

Summary of Cash Flow

The following table provides information about our net cash flow for the three months ended March 31, 2024 and 2023.


	Three Months Ended March 31,
$ in thousands	2024		2023
Net cash used for operating activities from continuing operations	$	(4,990)	$	(607)
Net cash used for investing activities from continuing operations	(952)		(5,867)
Net cash provided by financing activities from continuing operations	7,038		4,813
Increase (Decrease) in cash and cash equivalents from discontinued operations	(71)		3,490
Net change in cash, cash equivalents and restricted cash	1,025		1,829
Cash, cash equivalents and restricted cash at beginning of year	13,312		15,217
Cash, cash equivalents and restricted cash at end of period	$	14,337	$	17,046

Operating Activities

Net cash used for was $5.0 million for the three months ended March 31, 2024, as compared to net cash used of $0.6 million for the three months ended March 31, 2023. The variance in the operating cash flow during the first three months of 2024 as compared to 2023 was driven primarily by the purchase of additional Regional Greenhouse Gas Initiative ("RGGI") credits, as well as the advantageous change in net loss.

Investing Activities

Net cash used in investing activities was $1.0 million for the three months ended March 31, 2024, as compared to $5.9 million for the three months ended March 31, 2023. The decrease is primarily related to $5.1 million of lower purchases of and deposits for property and equipment as compared to the prior year due to the significant expansion of our miner fleet and infrastructure for cryptocurrency datacenter operations that was occurring during the prior year.

Financing Activities

Net cash provided by financing activities was $7.0 million for the three months ended March 31, 2024, as compared to $4.8 million for the three months ended March 31, 2023. The increase is primarily related to the increase of $6.0 million of proceeds from the issuance of common stock and pre-funded warrant, along with the $3.3 million elimination of

principal payments on debt due to its restructuring. These increases were partially offset by a $7.1 million reduction in sales of Class A common stock under the Company's ATM Agreement.

Financing Arrangements

See Note 5, "Debt," and Note 9, "Stockholder's Deficit" in the Notes to our Unaudited Condensed Consolidated Financial Statements for details regarding our financing arrangements for further details regarding our financing arrangements.

Critical Accounting Policies and Estimates

The most significant accounting estimates involve a high degree of judgment or complexity. Management believes the estimates and judgments most critical to the preparation of our condensed consolidated financial statements and to the understanding of our reported financial results include those made in connection with environmental obligations. Management evaluates its policies and assumptions on an ongoing basis.

Our significant accounting policies related to these accounts in the preparation of our condensed consolidated financial statements are described under the heading “Management Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023. As of the date of this filing, there were no significant changes to any of the critical accounting policies and estimates previously described in our Annual Report on Form 10-K for the year ended December 31, 2023 with the exception of those described below.

Revenue Recognition

Cryptocurrency Mining Revenue

Datacenter Hosting Revenue

We generate 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. We recognize variable hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to our customer, and our customer utilizes the hosting service (the customer simultaneously receives and consumes the benefits of our performance). Our performance obligation related to these services is satisfied over time. We recognize 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. We bill our 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. We recognize revenue based on actual consumption in the period.

Power and capacity revenue

Greenidge recognizes power revenue at a point in time when the electricity is delivered to the NYISO and its performance obligation is met. Greenidge recognizes revenue on capacity agreements over the life of the contract as its series of performance obligations are met as capacity to provide power is maintained.

Sales tax, value-added tax, and other taxes Greenidge collects concurrent with revenue-producing activities are excluded from revenue. Incidental contract costs that are not material in the context of the delivery of goods and services are recognized as expense. There is no significant financing component in these transactions.

Engineering Procurement and Construction Management ("EPCM")

Valuation of Long-Lived Assets

In accordance with ASC 360-10, 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.

During 2022, we determined that triggering events had occurred as of June 30, 2022 and December 31, 2022 due to the negative impact on our cash flows resulting from the significant market declines in the price of bitcoin and increases in natural gas and energy costs during those periods. For the purposes of performing the recoverability test we consider all the long-lived assets of the Company to be a single asset group as we operate as an integrated power and crypto datacenter operations business and this grouping represents the lowest level of identifiable independent cash flows. We

concluded that projected undiscounted cash flows did not support the recoverability of the long-lived assets as of June 30, 2022 and December 31, 2022; therefore, a valuation was performed using the market approach in order to determine the fair value of the asset grouping. The carrying value exceeded the fair value of the asset group and impairment loss was recorded for the difference in the carrying value and fair value. The Company recognized a noncash impairment charge of $176.3 million for the year ended December 31, 2022.

In determining the fair value of long-lived assets under the market approach, we relied on the guideline public company method, which considered the market capitalization of Greenidge, as well as the market capitalizations of other publicly traded companies and determined their revenue and hash rate multiples to compare to the market capitalization of Greenidge. Estimates using the guideline public company method is subject to uncertainties caused by potential differences in outlook caused by differing facts and circumstances surrounding the comparable companies, such as susceptibility to fluctuations in energy prices, liquidity of each company, environmental liabilities and any market perceptions of the companies in the peer group that may not apply across the industry. Valuing the Company under the market value approach changed significantly during 2022 as market perceptions of the cryptocurrency mining industry changed as bitcoin prices continued to decline and remained depressed for the latter part of 2022. We analyzed the estimates using this market approach by estimating the values using a cost approach, which resulted in similar asset values as of December 31, 2022. Considering the estimates from these different approaches, we believe the fair value of the asset group would have been within an approximate 15% to 20% range.

The Company is evaluating future uses of the remaining real estate assets in South Carolina, which includes the land and the original building which was classified as construction in process as it was not used in cryptocurrency mining. The impairment assessment was performed using a market approach by obtaining third party appraisals for the value of the site. An impairment charge of $4.0 million was recorded for the year ended December 31, 2023, which is the remaining value of the building which was determined to no longer be recoverable through a sale transaction. An impairment charge of $0.2 million was recorded for the three months ended March 31, 2024, which is the remaining value of a group of miners which were determined to no longer be recoverable through sale or repairs.

Remeasurement of Environmental Liabilities

We recognize environmental liabilities in accordance with ASC 410-30, Asset Retirement and Environmental Obligations. As of December 31, 2023 we have recognized environmental liabilities for a coal ash pond and landfill which were inherited due to the legacy coal operations at the Company's property in the Town of Torrey, New York. These costs are considered to be both probable and estimable. We have recorded a total environmental liability of $30.2 million as of both March 31, 2024 and December 31, 2023, for the remediation of these sites. The Company recognized no charges for the remeasurement of environmental liabilities for both the three months ended March 31, 2024 and 2023.

The Company has estimated the cost of remediation by developing a remediation plan in consultation with environmental engineers, periodically obtaining quotes for estimated construction costs and adjusting estimates for inflationary factors based on the expected timing of the remediation work. Estimates include anticipated post-closure costs including monitoring and maintenance of the site. Estimates are based on various assumptions that are sensitive to changes including, but not limited to, closure and post-closure cost estimates, timing of expenditures, escalation factors, and requirements of granted permits. Additional material adjustments to the environmental liability may occur in the future due to required changes to the scope and timing of the remediation, changes to regulations governing the closure and remediation of CCR sites and changes to cost estimates due to inflationary or other economic factors.

Off-Balance Sheet Arrangements

None.

Emerging Growth Company Status

We qualify as an “emerging growth company” under the Jumpstart our Business Startups Act ("JOBS Act"). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

•have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

•comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

•submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency” and pay ratio; and

•disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Its financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1.235 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Class A common stock that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of March 31, 2024, that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this Quarterly Report on Form 10-Q has been recorded, processed, summarized and reported when required and the information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have not been any changes in the Company’s internal control over financial reporting that occurred during the first quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become 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 our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. For information on legal proceedings, refer to Note 10, "Commitments and Contingencies—Legal Matters" in our unaudited condensed consolidated financial statements included elsewhere in this report.

Item 1A. Risk Factors

In evaluating our company and our business, you should carefully consider the risks and uncertainties described in Part I, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K together with updates to those risk factors or new risk factors contained in this Quarterly Report on Form 10-Q below and any other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, reputation, revenue, financial condition, results of operations and future prospects, in which case the market price of our common stock could decline. Unless otherwise indicated, reference in this section and elsewhere in this Quarterly Report on Form 10-Q to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, our business, reputation, financial condition, results of operations, revenue and our future prospects. The material and other risks and uncertainties included in our Annual Report on Form 10-K, summarized above in this Quarterly Report on Form 10-Q and described below are not intended to be exhaustive and are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. Certain statements in the Risk Factors below are forward-looking statements. See the section titled “Cautionary Statement Regarding Forward-Looking Statements”.

Our business is subject to numerous risks and uncertainties, which illuminate challenges that we face in connection with the successful implementation of our strategy and the growth of our business. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. There have been no material changes to the risk factors identified in our most recent Annual Report on Form 10-K, other than as set forth below.

The bitcoin reward for successfully uncovering a block most recently halved in April 2024 and will halve again several times in the future, and bitcoin value may not adjust to compensate us for the reduction in the rewards we receive from our bitcoin mining efforts.

Halving is a process designed to control the overall supply and reduce the risk of inflation in cryptocurrencies using a proof of work consensus algorithm. At a predetermined block, the bitcoin mining reward is cut in half, hence the term "halving." For bitcoin, the reward was initially set at 50 bitcoin currency rewards per block, which was cut in half to 25 on November 28, 2012 at block 210,000, then to 12.5 on July 9, 2016 at block 420,000, and then again to 6.25 on May 11, 2020 at block 630,000. The most recent halving for bitcoin occurred on April 19, 2024 at block 840,000 and the reward was reduced to 3.125. The next halving is expected to occur in spring 2028. This process will reoccur until the total amount of bitcoin currency rewards issued reaches 21 million, which is expected to occur around the year 2140.

Bitcoin has had a history of price fluctuations around the halving of its rewards, and we can provide no assurance that any price change will be favorable or would compensate for the reduction in bitcoin mining reward in connection with a halving. If the award of bitcoin or a proportionate decrease in bitcoin mining difficulty does not follow these anticipated halving events, the revenue we earn from our cryptocurrency datacenter operations would see a corresponding decrease, and we may not have an adequate incentive to continue bitcoin mining.

We have material environmental liabilities, and costs of compliance with existing and new environmental laws could have a material adverse effect on us.

We and our affiliates are subject to extensive environmental regulation by governmental authorities, including the United States Environmental Protection Agency (the "EPA"), and state environmental agencies such as the NYSDEC and/or attorneys general, and have material environmental liabilities, including a coal combustion residual liability of $17.3 million as of December 31, 2023 associated with the closure of a coal ash point located on the New York Facility property and an environmental liability of $12.9 million as of December 31, 2023 associated with the Lockwood Hills Landfill. See "Business—Governmental Regulation—Environmental Liability" and Note 10, "Commitments and Contingencies—Environmental Liabilities", in the Notes to Consolidated Financial Statements. We may incur significant additional costs beyond those currently contemplated to comply with these regulatory requirements. If we fail to comply with these regulatory requirements, we could be forced to reduce or discontinue operations or become subject to administrative, civil, or criminal liabilities and fines.

Existing environmental regulations could be revised or reinterpreted, new laws and regulations could be adopted or become applicable to us or our facilities, and future changes in environmental laws and regulations could occur, including potential regulatory and enforcement developments related to air emissions, all of which could result in significant additional costs beyond those currently contemplated to comply with existing requirements. Any of the foregoing could have a material adverse effect on our results of operations and financial condition.

The EPA has recently finalized or proposed several regulatory actions establishing new requirements for control of certain emissions from certain sources, including electricity generation facilities. In the future, the EPA may also propose and finalize additional regulatory actions that may adversely affect our existing generation facilities or our ability to cost-effectively develop new generation facilities. We can provide no assurance that the currently installed emissions control equipment at the natural gas-fueled generation facilities owned and operated by us will satisfy the requirements under any future EPA or state environmental regulations. Future federal and/or state regulatory actions could require us to install significant additional emissions control equipment, resulting in potentially material costs of compliance for our generation units, including capital expenditures, higher operating and fuel costs, and potential production curtailments. These costs could have a material adverse effect on our results of operations and financial condition.

We may not be able to obtain or maintain all required environmental regulatory approvals. For example, in June 2022, NYSDEC denied our application to renew a Title V Air Permit for the continued operation of our natural gas power generation facility in the Town of Torrey, New York. In July 2022, we appealed the denial and requested an administrative adjudicatory hearing with NYSDEC, however, in May 2024, our appeal to NYSDEC and request for an adjudicatory hearing were ultimately denied and the June 2022 non-renewal of our Title V Air Permit was affirmed by NYSDEC's Regional Director for Region 7. We intend to take further legal action in a court of competent jurisdiction to challenge NYSDEC's denial of our permit renewal application and to continue to operate the facility as normal pending a final, non-appealable outcome regarding our permit renewal application, however there can be no assurance that our efforts will be successful. If there is a delay in obtaining any required environmental regulatory approvals, if we fail to obtain, maintain, or comply with any such approval, or if an approval is retroactively disallowed or adversely modified, the operation of our generation facilities could be stopped, disrupted, curtailed, or modified or become subject to additional costs. Any such stoppage, disruption, curtailment, modification, or additional costs could have a material adverse effect on our results of operations and financial condition.

In addition, we may be responsible for any on-site liabilities associated with the environmental condition of facilities that we have acquired, leased, developed, or sold, regardless of when the liabilities arose and whether they are now known or unknown. In connection with certain acquisitions and sales of assets, we may obtain, or be required to provide, indemnification against certain environmental liabilities. Another party could, depending on the circumstances, assert an environmental claim against us or fail to meet its indemnification obligation to us. Such event could have an adverse effect on our results of operations and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Vendor Payment. In May 2023, Greenidge issued 54,348 unregistered shares of its Class A common stock to a vendor as payment for services provided to us during the first quarter of 2023. This issuance was not registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) thereof and Regulation D promulgated thereunder, which exempts transactions by an issuer not involving any public offering.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The exhibits listed on the Exhibit Index are filed or furnished as part of this Quarterly Report.

Exhibit Index


Exhibit No.						Description
10.1						Securities Purchase Agreement, dated February 12, 2024, between Greenidge Generation Holdings Inc. and Armistice Capital Master Fund Ltd. (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on February 16, 2024).
10.2						Pre-Funded Common Stock Purchase Warrant, dated February 14, 2024, issued by Greenidge Generation Holdings Inc. to Armistice Capital Master Fund Ltd. (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K filed on February 16, 2024).
10.3						Common Stock Purchase Warrant, dated February 14, 2024, issued by Greenidge Generation Holdings Inc. issued to Armistice Capital Master Fund Ltd. (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed on February 16, 2024).
10.4						Commercial Purchase and Sale Agreement, dated March 6, 2024, between Greenidge Mississippi LLC and Janesville, LLC (incorporated by reference to Exh ibit 10.46 of the Company 's 10-K filed on April 10, 2024).
31.1						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows and (iv) the Notes to Unaudited Condensed Interim Consolidated Financial Statements.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

_______________________________


*			Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Greenidge Generation Holdings Inc.

Date: May 15, 2024	By:	/s/ Jordan Kovler
		Jordan Kovler
		Chief Executive Officer
		(Principal Executive Officer)

Date: May 15, 2024	By:	/s/ Christian Mulvihill
		Christian Mulvihill
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Greenidge Generation (GREE) 10-Q2024 Q1 Quarterly report

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