Fourth Quarter 2022 Highlights
- Total revenue was $16.0 million,
compared to January 2023 guidance of
~$15 million
- Cryptocurrency datacenter revenue was $12.2 million, in line with January 2023 guidance
- Produced 683 bitcoins in the fourth quarter
- GAAP net loss from continuing operations of $135.0 million for the fourth quarter, including
a $104.8 million noncash impairment
charge and a $5.6 million charge for
the remeasurement of environmental liabilities
- Adjusted EBITDA loss of $4.9
million, in line with January
2023 guidance of a loss of $4
million to $6 million
- Adjusted net loss from continuing operations of $25.7 million
- Active Mining capacity of approximately 2.4 EH/s from 24,200
miners as of December 31, 2022
- Cash, short term investments and cryptocurrency
holdings of $15.7 million as of
December 31, 2022
Full Year 2022 Highlights
- Total revenue was $90.0
million
- Cryptocurrency datacenter revenue of $73.8 million
- Produced 2,731 bitcoins in 2022
- GAAP net loss from continuing operations of $269.7 million, including $176.3 million of noncash impairment charges and
$16.7 million charge for the
remeasurement of environmental liabilities
- Adjusted EBITDA loss of $1.1
million
- Adjusted net loss from continuing operations of $60.4 million
First Quarter 2023 Actions
- Restructured secured debt with NYDIG, reducing debt and accrued
interest obligations from $75.8
million to $17.3 million
- Restructured promissory note with B. Riley, reducing debt and
accrued interest obligations from $10.6
million to $8.7 million
- Entered into hosting arrangement with NYDIG affiliates with
gross profit-sharing component that allows Greenidge to participate
in bitcoin price appreciation
- Atlas and B. Riley each invested $1
million through purchases of class A common shares
- Raised additional $6.3 million of
cash from net proceeds from sales of equity under the ATM
program
- Completed sale of a portion of the Support.com business for
$2.6 million
- Expect to end the first quarter with ~$17 million of cash
- Executed an agreement for Conifex to host 750 of Greenidge's
owned miners
- Continuing to evaluate options for deployment of Greenidge's
over 9,000 remaining miners
- Actively pursuing sale of excess real estate
Adjusted net (loss) income from continuing operations and
adjusted EBITDA (loss) from continuing operations are non-GAAP
measures. See the tables attached to this press release for a
reconciliation from GAAP to non-GAAP measures and "Use of
Non-GAAP Information" below for more details.
FAIRFIELD, Conn., March 31,
2023 /PRNewswire/ -- Greenidge Generation Holdings
Inc. (NASDAQ: GREE) ("Greenidge" or the "Company"), a vertically
integrated cryptocurrency datacenter and power
generation company, today announced financial and operating results
for the fourth quarter and fiscal year ended December 31, 2022 and provided an update on
actions the Company has taken to date to improve liquidity during
the first quarter of 2023.
"Our results for the fourth quarter of 2022 are consistent with
the estimates we released in January," said Dave Anderson, Chief Executive Officer of
Greenidge. "We have effectively moved through a very challenging
time in the industry by restructuring our balance sheet during the
first quarter of 2023 and decreasing the risk profile of the
Company. In addition to the steps taken to date, our team is
evaluating opportunities designed to ensure we are in the best
position to participate in the potential recovery of
bitcoin, of which we have signs of in March 2023."
Fourth Quarter 2022 Financial Results
Greenidge's revenue for the fourth quarter was $16.0 million, down 55% compared to the prior
year. Cryptocurrency Datacenter revenue was
$12.2 million, down 64% versus the
prior year, and Power and Capacity revenue was $3.8 million, up 74% compared to the prior year.
Greenidge produced 683 bitcoins during the fourth quarter, compared
to 609 bitcoins in the fourth quarter of the prior year. For the
full year of 2022, Greenidge produced 2,731 bitcoins, which
compared to 1,866 bitcoins in 2021.
As of December 31, 2022, Greenidge
had approximately 24,200 active miners with an aggregate hash rate
capacity of approximately 2.4 EH/s.
Net loss from continuing operations was $135.0 million for the fourth quarter as compared
to a net income from continuing operations of $3.3 million in the fourth quarter of the prior
year. The fourth quarter of 2022 included a $104.8 million noncash impairment charge relating
to long-lived assets, $5.6 million of
remeasurement adjustments associated with environmental
liabilities, $0.7 million of
restructuring costs and $0.1 million
of expansion costs. Excluding these items, Adjusted net loss from
continuing operations was $25.7
million, compared to Adjusted net income of $7.6 million in the fourth quarter of 2021.
Adjusted EBITDA loss for the fourth quarter was $4.9 million compared to the prior year fourth
quarter Adjusted EBITDA of $18.2
million. The lower average bitcoin prices and
higher difficulty levels on the blockchain network in 2022 as
compared to 2021 more than offset the increased hash rate from the
expansion of our mining capacity.
As of December 31, 2022, Greenidge
had cash, short term investments and fair value of
cryptocurrency holdings of $15.7 million and expects to end the first
quarter of 2023 with approximately $17
million of cash.
First Quarter 2023 Actions
As previously disclosed, on January 30, 2023, Greenidge
entered into a number of agreements associated with its secured
debt with NYDIG, including a Membership Interest and Asset Purchase
Agreement, a Senior Secured Loan Agreement and a Debt Settlement
Agreement regarding its 2021 and 2022 Master Equipment Finance
Agreements with NYDIG. The effect of these agreements was to
transfer to NYDIG affiliates ownership
of bitcoin mining equipment and certain
credits and coupons that had accrued to Greenidge for previous
purchases of mining equipment with
a bitcoin miner manufacturer. The transfer
of these assets reduced Greenidge's principal and accrued interest
balance of the secured debt with NYDIG from approximately $76
million to approximately $17 million, for an aggregate
debt reduction of approximately $59 million. The Senior
Secured Loan Agreement allows for a voluntary prepayment of the
loan in kind of approximately $10 million by transferring
ownership of certain mining infrastructure assets if NYDIG enters
into a binding agreement, facilitated by Greenidge, securing rights
to a site for a future mining facility by April 30, 2023 (the "Post-Closing Covenant"),
which may further reduce the principal balance of the debt to
approximately $7 million.
Greenidge and NYDIG affiliates concurrently entered into
five-year hosting agreements, whereby Greenidge agreed to host,
power and provide technical support services, and other related
services, to NYDIG affiliates' mining equipment at Greenidge
facilities. The terms of such arrangements require NYDIG affiliates
to pay a hosting fee that covers the cost of power and direct costs
associated with management of the mining facilities, as well as a
gross profit-sharing arrangement.
Also, as disclosed, on January 30,
2023, Greenidge entered into an amendment (the "Amendment")
to its amended and restated bridge promissory note in favor
of B. Riley (the "Promissory Note") regarding
approximately $10.6 million of principal and accrued
interest. The Amendment modified the payment dates and principal
and interest payment amounts, requiring no principal or interest
payments until June 2023 and monthly payments thereafter
through November 2023. Under the Amendment, Greenidge's
mandatory monthly debt repayments from proceeds of sales under the
ATM Agreement or the equity purchase agreement have been reduced to
15% of the net proceeds, which significantly improves the Company's
ability to raise additional liquidity. In addition, Greenidge would
potentially reduce its monthly principal amortization payments from
approximately $1.5 million to $400,000 per
month, if it were to pay at least $6 million of principal
debt to B. Riley prior to June 20, 2023. Greenidge is actively
pursuing the sale of excess real estate that is not needed for the
mining operations at its South Carolina property. Under
the terms of the Promissory Note, if all or a portion of
the South Carolina property is sold, the net proceeds
from the sale are required to be used to repay the Promissory
Note.
Under the terms of the Amendment, each of B. Riley and
an affiliate of Atlas Holdings LLC purchased $1
million of Greenidge's class A common stock under the ATM
Agreement. Greenidge made a $1.9 million partial
payment of the Promissory Note from the net proceeds received from
the B. Riley and Atlas Holdings LLC's affiliate purchases. In
total, Greenidge repaid $2.8 million
of the Promissory Note during the first quarter of 2023 when
including mandatory repayments associated with proceeds from sales
under the ATM Agreement during the first quarter of 2023, reducing
the balance of the Promissory Note to $7.8
million.
Additionally, in January 2023,
Greenidge completed the sale of an end-user software that its
wholly-owned subsidiary, Support.com, marketed as a malware
protection and removal software product for net proceeds of
approximately $2.6 million. As previously disclosed, Greenidge
is considering various alternatives in connection with the
remainder of Support.com, including the disposition of assets and
other transactions. Greenidge now reports the results
of Support.com as discontinued operations, which requires
prior periods to be restated to be comparable.
As part of Greenidge's plans to deploy its remaining approximate
10,000 owned miners following the execution of the debt
restructuring with NYDIG, Greenidge executed a hosting agreement
with Conifex Timber Inc. ("Conifex"), whereby Conifex will host 750
miners on behalf of Greenidge. The hosting agreement includes
consideration for a potential expansion of 25MW of mining capacity
using renewable energy.
About Greenidge Generation Holdings Inc.
Greenidge
Generation Holdings Inc. (NASDAQ: GREE) is a vertically integrated
cryptocurrency datacenter and power generation
company.
Use of Non-GAAP Information
To provide investors and
others with additional information regarding Greenidge's financial
results, Greenidge has disclosed in this press release certain
non-GAAP operating performance measures of Adjusted EBITDA (loss)
from continuing operations, Adjusted net (loss) income from
continuing operations. Adjusted EBITDA (loss) from continuing
operations is defined as (loss) income from continuing operations
before taxes, interest and depreciation and amortization, which is
then adjusted for stock-based compensation, other special items
determined by management, including, but not limited to business
expansion costs, impairments of long-lived assets, remeasurement of
environmental liabilities and restructuring and other costs.
Adjusted net (loss) income from continuing operations is net (loss)
income from continuing operations adjusted for the after-tax
impacts of special items determined by management, including but
not limited to business expansion costs, impairments of long-lived
assets, remeasurement of environmental liabilities and
restructuring and other costs. These non-GAAP financial measures
are a supplement to and not a substitute for or superior to, the
Company's results presented in accordance with U.S. GAAP. The
non-GAAP financial measures presented by the Company may be
different from non-GAAP financial measures presented by other
companies. Specifically, the Company believes the non-GAAP
information provides useful measures to investors regarding the
Company's financial performance by excluding certain costs and
expenses that the Company believes are not indicative of its core
operating results. The presentation of these non-GAAP financial
measures is not meant to be considered in isolation or as a
substitute for results or guidance prepared and presented in
accordance with U.S. GAAP. A reconciliation of the non-GAAP
financial measures to U.S. GAAP results is included herein.
Forward-Looking Statements
This press release includes
certain statements that may constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact
are forward-looking statements for purposes of federal and state
securities laws. These forward-looking statements involve
uncertainties that could significantly affect Greenidge's financial
or operating results. These forward-looking statements may be
identified by terms such as "anticipate," "believe," "continue,"
"foresee," "expect," "intend," "plan," "may," "will," "would,"
"could," and "should," and the negative of these terms or other
similar expressions. Forward-looking statements are based on
current beliefs and assumptions that are subject to risks and
uncertainties and are not guarantees of future performance.
Forward-looking statements in this press release include, among
other things, statements regarding the business plan, business
strategy and operations of Greenidge in the future. In addition,
all statements that address operating performance and future
performance, events or developments that are expected or
anticipated to occur in the future, such as statements concerning
(i) the potential recovery of bitcoin, (ii) the sale
of excess real estate in South
Carolina, (iii) the ability to implement the Post-Closing
Covenant, (iv) the disposition of assets and other transactions
associated with Support.com and (v) potential expansion of mining
capacity, are forward-looking statements. Forward-looking
statements are subject to a number of risks, uncertainties and
assumptions. Matters and factors that could cause actual results to
differ materially from those expressed or implied in such
forward-looking statements include but are not limited to the
matters and factors described in Part I, Item 1A. "Risk Factors" of
Greenidge's Annual Report on Form 10-K, and its other filings with
the Securities and Exchange Commission. Consequently, all of the
forward-looking statements made in this press release are qualified
by the information contained under this caption. No assurance can
be given that these are all of the factors that could cause actual
results to vary materially from the forward-looking statements in
this press release. You should not put undue reliance on
forward-looking statements. No assurances can be given that any of
the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do occur, the actual results,
performance, or achievements of Greenidge could differ materially
from the results expressed in, or implied by, any forward-looking
statements. All forward-looking statements speak only as of the
date of this press release and Greenidge does not assume any duty
to update or revise any forward-looking statements included in this
press release, whether as a result of new information, the
occurrence of future events, uncertainties or otherwise, after the
date of this press release.
For further information, please contact:
Investor Relations
investorrelations@greenidge.com
MediaInquiries
media@greenidge.com
GREENIDGE GENERATION
HOLDINGS INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
FOR THE THREE MONTHS
ENDED DECEMBER 31, 2022 AND 2021
|
Amounts denoted in
thousands
|
|
|
Three Months Ended
December 31:
|
|
|
2022
|
|
2021
|
REVENUE:
|
|
|
|
|
Cryptocurrency
datacenter
|
|
$
12,238
|
|
$
33,680
|
Power and
capacity
|
|
3,774
|
|
2,173
|
Total
revenue
|
|
16,012
|
|
35,853
|
OPERATING COSTS AND
EXPENSES:
|
|
|
|
|
Cost of revenue -
cryptocurrency datacenter (exclusive of depreciation and
amortization)
|
|
11,138
|
|
7,655
|
Cost of revenue - power
and capacity (exclusive of depreciation and
amortization)
|
|
2,951
|
|
2,543
|
Selling, general and
administrative
|
|
9,057
|
|
12,249
|
Depreciation and
amortization
|
|
13,435
|
|
3,159
|
Gain on sale of
assets
|
|
(1,910)
|
|
-
|
Impairment of
long-lived assets
|
|
104,807
|
|
-
|
Remeasurement of
environmental liability
|
|
5,585
|
|
3,621
|
Total operating costs
and expenses
|
|
145,063
|
|
29,227
|
Loss from
operations
|
|
(129,051)
|
|
6,626
|
Other income (expense),
net:
|
|
|
|
|
Interest expense,
net
|
|
(5,882)
|
|
(2,305)
|
Gain on sale of digital
assets
|
|
-
|
|
116
|
Other (expense) income,
net
|
|
(150)
|
|
107
|
Total other expense,
net
|
|
(6,032)
|
|
(2,082)
|
(Loss) income from
continuing operations before taxes
|
|
(135,083)
|
|
4,544
|
(Benefit) provision for
income taxes
|
|
(35)
|
|
1,278
|
Net (loss) income from
continuing operations
|
|
(135,048)
|
|
3,266
|
Loss from discontinued
operations, net of tax
|
|
(4,533)
|
|
(44,647)
|
Net loss
|
|
$
(139,581)
|
|
$
(41,381)
|
|
|
|
|
|
Reconciliation of
Net (loss) income from continuing operations to Adjusted
EBITDA:
|
Net (loss) income from
continuing operations
|
|
$
(135,048)
|
|
$
3,266
|
(Benefit) provision for
income taxes
|
|
(35)
|
|
1,278
|
Interest expense,
net
|
|
5,882
|
|
2,305
|
Depreciation and
amortization
|
|
13,435
|
|
3,159
|
EBITDA (loss) from
continuing operations
|
|
$
(115,766)
|
|
$
10,008
|
Stock-based
compensation
|
|
1,606
|
|
2,296
|
Impairment of
long-lived assets
|
|
104,807
|
|
-
|
Remeasurement of
environmental liability
|
|
5,585
|
|
3,621
|
Expansion
costs
|
|
96
|
|
2,234
|
Restructuring and
other
|
|
729
|
|
-
|
Gain on sale of
assets
|
|
(1,910)
|
|
-
|
Adjusted EBITDA
(loss) from continuing operations
|
|
$
(4,853)
|
|
$
18,159
|
|
|
|
|
|
Reconciliation of
Net (loss) income from continuing operations to Adjusted Net (loss)
income from continuing operations:
|
Net (loss) income from
continuing operations
|
|
$
(135,048)
|
|
$
3,266
|
Impairment
charges
|
|
104,807
|
|
-
|
Remeasurement of
environmental liabilities, net of tax
|
|
5,585
|
|
2,654
|
Expansion costs, net of
tax
|
|
96
|
|
1,638
|
Restructuring and
other, net of tax
|
|
729
|
|
-
|
Gain on sale of assets,
net of tax
|
|
(1,910)
|
|
-
|
Adjusted Net (loss)
income from continuing operations
|
|
$
(25,741)
|
|
$
7,558
|
GREENIDGE GENERATION
HOLDINGS INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
FOR THE YEARS ENDED
DECEMBER 31, 2022 AND 2021
|
Amounts denoted in
thousands
|
|
|
For the Year Ended
December 31:
|
|
|
2022
|
|
2021
|
REVENUE:
|
|
|
|
|
Cryptocurrency
datacenter
|
|
$
73,809
|
|
$
87,897
|
Power and
capacity
|
|
16,170
|
|
9,428
|
Total
revenue
|
|
89,979
|
|
97,325
|
OPERATING COSTS AND
EXPENSES:
|
|
|
|
|
Cost of revenue -
cryptocurrency datacenter (exclusive of depreciation and
amortization)
|
|
45,933
|
|
19,159
|
Cost of revenue - power
and capacity (exclusive of depreciation and
amortization)
|
|
13,906
|
|
9,231
|
Selling, general and
administrative
|
|
36,946
|
|
23,989
|
Depreciation and
amortization
|
|
35,136
|
|
8,474
|
Gain on sale of
assets
|
|
(1,780)
|
|
-
|
Impairment of
long-lived assets
|
|
176,307
|
|
-
|
Remeasurement of
environmental liability
|
|
16,694
|
|
3,688
|
Total operating costs
and expenses
|
|
323,142
|
|
64,541
|
(Loss) income from
operations
|
|
(233,163)
|
|
32,784
|
Other income (expense),
net:
|
|
|
|
|
Interest expense,
net
|
|
(21,575)
|
|
(3,689)
|
Interest expense -
related party
|
|
-
|
|
(22)
|
(Loss) gain on sale of
digital assets
|
|
(15)
|
|
275
|
Other income,
net
|
|
14
|
|
153
|
Total other income
(expense), net
|
|
(21,576)
|
|
(3,283)
|
(Loss) income from
continuing operations before taxes
|
|
(254,739)
|
|
29,501
|
Provision for income
taxes
|
|
15,002
|
|
7,901
|
Net (loss) income from
continuing operations
|
|
(269,741)
|
|
21,600
|
Loss from discontinued
operations, net of tax
|
|
(1,326)
|
|
(66,080)
|
Net loss
|
|
$
(271,067)
|
|
$
(44,480)
|
|
|
|
|
|
Reconciliation of
Net (loss) income from continuing operations to Adjusted
EBITDA:
|
Net (loss) income from
continuing operations
|
|
$
(269,741)
|
|
$
21,600
|
Provision for income
taxes
|
|
15,002
|
|
7,901
|
Interest expense,
net
|
|
21,575
|
|
3,711
|
Depreciation and
amortization
|
|
35,136
|
|
8,474
|
EBITDA (loss) from
continuing operations
|
|
$
(198,028)
|
|
$
41,686
|
Stock-based
compensation
|
|
2,636
|
|
3,770
|
Impairment of
long-lived assets
|
|
176,307
|
|
-
|
Remeasurement of
environmental liability
|
|
16,694
|
|
3,688
|
Expansion
costs
|
|
2,315
|
|
2,362
|
Restructuring
|
|
729
|
|
-
|
Gain on sale of
assets
|
|
(1,780)
|
|
-
|
Adjusted EBITDA
(loss) from continuing operations
|
|
$
(1,127)
|
|
$
51,506
|
|
|
|
|
|
Reconciliation of
Net (loss) income from continuing operations to Adjusted Net (loss)
income from continuing operations:
|
Net (loss) income from
continuing operations
|
|
$
(269,741)
|
|
$
21,600
|
Impairment
charges
|
|
176,307
|
|
-
|
Remeasurement of
environmental liabilities, net of tax
|
|
16,694
|
|
2,703
|
Expansion costs, net of
tax
|
|
2,315
|
|
1,731
|
Restructuring, net of
tax
|
|
729
|
|
-
|
Loss on sale of assets,
net of tax
|
|
(1,780)
|
|
-
|
Tax charge for
valuation allowance
|
|
15,055
|
|
-
|
Adjusted Net (loss)
income from continuing operations
|
|
$
(60,421)
|
|
$
26,034
|
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SOURCE Greenidge Generation Holdings Inc.