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American Bitcoin Corp.

American Bitcoin Corp.ABTCEarnings & Financial Report

Nasdaq · Financials · Finance Services

Bitcoin is the first decentralized cryptocurrency. Based on a free-market ideology, bitcoin was invented in 2008 when an unknown person published a white paper under the pseudonym of Satoshi Nakamoto. Use of bitcoin as a currency began in 2009, with the release of its open-source implementation. From 2021 to 2025, El Salvador adopted it as legal tender currency before revoking it. As bitcoin is pseudonymous, its use by criminals has attracted the attention of regulators, leading to its ban by...

What changed in American Bitcoin Corp.'s 10-K — 2024 vs 2025

Top changes in American Bitcoin Corp.'s 2025 10-K

564 paragraphs added · 647 removed · 110 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

101 edited+310 added−384 removed1 unchanged
The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address the issues adequately or in a timely manner.
The lack of guaranteed financial incentives for contributors to maintain or develop the Bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address the issues adequately or in a timely manner.
Additionally, various governmental and regulatory bodies, including legislative and executive bodies, in the United States and in other countries may adopt new laws and regulations, the direction and timing of which may be influenced by changes in the governing administrations and major events in the crypto economy.
Additionally, various governmental and regulatory bodies, including legislative and executive bodies, in the United States, Canada, and in other countries may adopt new laws and regulations, the direction and timing of which may be influenced by changes in the governing administrations and major events in the economy.
Using alternate blocks, the malicious actor could “double-spend” its own digital assets (i.e., spend the same digital assets in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintains control.
Using alternate blocks, the malicious actor could "double-spend" its own digital assets (i.e., spend the same digital assets in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintains control.
However, Gryphon may not be able, or it may not be practical, to secure or realize the economic benefit of the new asset for various reasons.
However, we may not be able, or it may not be practical, to secure or realize the economic benefit of the new asset for various reasons.
Generally, a bitcoin miner’s chance of solving a block on the Bitcoin blockchain and earning a bitcoin reward is a function of the miner’s hash rate (i.e., the amount of computing power devoted to supporting the Bitcoin blockchain), relative to the global network hash rate.
Generally, a Bitcoin miner’s chance of solving a block on the Bitcoin blockchain and earning a Bitcoin reward is a function of the Bitcoin miner’s hashrate (i.e., the amount of computing power devoted to supporting the Bitcoin blockchain), relative to the global network hashrate.
The use of crypto assets to, among other things, buy and sell goods and services and complete other transactions is part of a new and rapidly evolving industry that employs crypto assets based upon a computer generated mathematical and/or cryptographic protocol.
The use of digital assets to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs digital assets, including Bitcoin, based upon a computer-generated mathematical and/or cryptographic protocol.
The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable.
The lack of an active market may impair your ability to sell your shares of Class A common stock at the time you wish to sell them or at a price that you consider reasonable.
Many digital asset exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate practices, or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, such digital asset exchanges, including prominent exchanges handling a significant portion of the volume of digital asset trading.
Furthermore, many Bitcoin exchanges do not typically provide the public with significant information regarding their ownership structure, management teams, corporate practices, or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, Bitcoin exchanges, including prominent exchanges handling a significant portion of the volume of Bitcoin trading.
For instance, Gryphon may determine that there is no safe or practical way to custody the new asset, that trying to do so may pose an unacceptable risk to Gryphon’s holdings in the old asset, or that the costs of taking possession and/or maintaining ownership of the new cryptocurrency exceed the benefits of owning the new cryptocurrency.
For instance, we may determine that there is no safe or practical way to custody the new asset, that trying to do so may pose an unacceptable risk to our holdings in the old asset, or that the costs of taking possession and/or maintaining ownership of the new digital asset exceed the benefits of owning the new digital asset.
Moreover, the complexity and evolving nature of Gryphon’s business and the significant uncertainty surrounding the regulation of the crypto economy requires Gryphon to exercise its judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with Gryphon’s conclusions.
Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the crypto industry requires us to exercise judgment as to whether certain laws, rules, and regulations apply to us and it is possible that governmental bodies and regulators may disagree with our conclusions.
Sales of a substantial number of shares of Gryphon’s common stock in the public market or the perception that these sales might occur could significantly reduce the market price of Gryphon’s common stock and impair Gryphon’s ability to raise adequate capital through the sale of additional equity securities.
Sales of a substantial number of shares of our Class A common stock or other securities or the perception that these sales might occur could significantly reduce the market price of our Class A common stock and impair our ability to raise adequate capital through the sale of additional equity securities.
A number of companies that engage in Bitcoin and/or other cryptocurrency-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services.
A number of companies that provide Bitcoin or other digital asset-related services have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services.
An inactive market may also impair Gryphon’s ability to raise capital by selling shares of common stock and may impair Gryphon’s ability to acquire other businesses or technologies using Gryphon’s shares of common stock as consideration, which, in turn, could materially adversely affect Gryphon’s business.
An inactive market may also impair our ability to raise capital by selling securities and may impair our ability to acquire other businesses or technologies using our securities as consideration, which, in turn, could materially adversely affect our business.
The emergence of other financial vehicles and exchange-traded funds have been scrutinized by regulators and such scrutiny and the negative impressions or conclusions resulting from such scrutiny could be applicable to Gryphon and impact Gryphon’s ability to successfully pursue its strategy or operate at all, or to establish or maintain a public market for Gryphon’s securities.
The emergence of other financial vehicles and ETPs have been scrutinized by regulators and such scrutiny and the negative impressions or conclusions resulting from such scrutiny could be applicable to us and impact our ability to successfully pursue our strategy or operate at all or to establish or maintain a market for our securities.
In many nations, particularly in China and Russia, it is illegal to accept payment in Bitcoin and other cryptocurrencies for consumer transactions and banking institutions are barred from accepting deposits of Bitcoin. Such restrictions may adversely affect Gryphon as the large-scale use of Bitcoin as a means of exchange is presently confined to certain regions globally.
In certain nations, it is illegal to accept payment in Bitcoin or other digital assets for consumer transactions and banking institutions are barred from accepting deposits of Bitcoin. Such restrictions may adversely affect us as the large-scale use of Bitcoin as a means of exchange is presently confined to certain regions.
Large-scale acceptance of Bitcoin as a means of payment has not, and may never, occur. The growth of this industry in general, and the use of Bitcoin in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably.
The growth of this industry in general, and the use of Bitcoin in particular, is subject to a high degree of uncertainty and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably.
The usefulness of Bitcoin as a payment system and the public perception of Bitcoin could be damaged if banks or financial institutions were to close the accounts of businesses engaging in Bitcoin and/or other cryptocurrency-related activities. This could occur as a result of compliance risk, cost, government regulation or public pressure.
Similarly, the usefulness of digital assets as a payment system and the public perception of digital assets could be damaged if banks or financial institutions were to close the accounts of businesses providing Bitcoin or other digital asset-related services. This could occur as a result of compliance risk, cost, government regulation, or public pressure.
These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another.
These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another and may conflict with one another. For example, the Clarity Act was passed by the U.S.
If a corresponding and proportionate increase in the trading price of Bitcoin or a proportionate decrease in mining difficulty does not follow these anticipated halving events, the revenue Gryphon earns from its bitcoin mining operations would see a corresponding decrease, which would have a material adverse effect on Gryphon’s business and the economics of Gryphon’s mining operations.
If a corresponding and proportionate increase in the trading price of Bitcoin or a proportionate decrease in mining difficulty does not follow these anticipated halving events, the revenue we earn from our Bitcoin mining operations would see a corresponding decrease, which would have a material adverse effect on our business, financial condition, and results of operations.
As new and more powerful miners are deployed, the global network hash rate will continue to increase, meaning a miner’s chance of earning bitcoin rewards will decline unless it deploys additional hash rate at pace with the industry.
As new and more powerful Bitcoin miners are deployed, the global network hashrate will continue to increase, meaning a Bitcoin miner’s percentage of the total daily rewards will decline unless it deploys additional hashrate at pace with the growth of global hashrate.
The difficulty that many businesses that provide Bitcoin and/or derivatives on other cryptocurrency-related activities have and may continue to have in finding banks and financial institutions willing to provide them services could decrease their usefulness and harm their public perception in the future and may be decreasing the usefulness of Bitcoin as a payment system and harming public perception of Bitcoin.
The difficulty that many businesses that provide Bitcoin or other digital asset-related services have, and may continue to have, in finding banks and financial institutions willing to provide them services may decrease the usefulness of digital assets as a payment system and harm public perception of digital assets.
To the extent Gryphon has not complied with such laws, rules, and regulations, it could be subject to significant fines, revocation of licenses, limitations on its products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect its business, operating results, and financial condition.
To the extent we have not complied or are deemed to have not complied, with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our operations, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, financial condition, and results of operations.
To the extent that such malicious actor or botnet does not yield its majority control of the processing power or the digital asset community does not reject the fraudulent blocks as malicious, reversing any changes made to the blockchain may not be possible. Such changes could adversely affect an investment in Gryphon.
To the extent that such malicious actor or botnet does not yield its control of the processing power on the Bitcoin or other network or the Bitcoin or other community does not reject the fraudulent blocks as malicious, reversing any changes made to the blockchain may not be possible.
The approach towards and possible crossing of the 50% threshold indicate a greater risk that a single mining pool could exert authority over the validation of digital asset transactions.
The possible crossing of the 50% threshold indicates a greater risk in that a single mining pool could exert authority over the validation of Bitcoin transactions.
If Gryphon is unable to raise the additional capital needed to fund its operations or execute future strategic growth initiatives, Gryphon may be less competitive in its industry and its results of operations and financial condition may suffer. The value of its securities may also be materially and adversely affected.
If we are unable to raise the additional capital needed to maintain our operations and execute on our growth initiatives, we may be less competitive in our industry and our business, financial condition, and results of operations may suffer, and the value of our securities may be materially and adversely affected.
Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, crypto assets, and related technologies. As a result, some applicable laws and regulations do not contemplate or address unique issues associated with the crypto economy, are subject to significant uncertainty, and vary widely across U.S. federal, state, and local and international jurisdictions.
As a result, some applicable laws and regulations do not contemplate or address unique issues associated with the crypto economy, are subject to significant uncertainty, and vary widely across U.S. and Canadian federal, state, provincial, and local and international jurisdictions.
As greater adoption of Bitcoin occurs, we expect the demand for Bitcoin will increase further, drawing more mining companies into the industry and thereby increasing the global network hash rate.
As demand for Bitcoin has increased, the global network hashrate has increased and to the extent more adoption of Bitcoin occurs, we would expect the demand for Bitcoin would increase, drawing more mining companies into the industry and further increasing the global network hashrate.
There is a possibility of Bitcoin mining algorithms transitioning to proof of stake validation and other mining related risks, which could make Gryphon less competitive and ultimately adversely affect Gryphon’s business. Proof of stake is an alternative method in validating Bitcoin transactions.
There is a possibility of Bitcoin mining algorithms transitioning to "proof of stake" validation, which could make us less competitive and adversely affect our business, financial condition, and results of operations. "Proof of stake" is an alternative method in validating digital asset transactions.
Pursuant to the 2024 Omnibus Incentive Plan (the “2024 Plan”), Gryphon’s board of directors is authorized to grant stock options and other equity-based awards to its employees, directors and consultants, which equity-based awards would also cause dilution to its stockholders.
Pursuant to the Amended and Restated American Bitcoin Corp. 2025 Omnibus Incentive Plan (the "2025 Plan"), the Board is authorized to grant stock options and other equity-based awards to our employees, directors, and consultants, which equity-based awards would also cause dilution to our stockholders.
A perceived lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to business failure, hackers or malware, government-mandated regulation, or fraud, may reduce confidence in digital asset networks and result in greater volatility in cryptocurrency values.
Furthermore, negative perception, a lack of stability in the broader Bitcoin markets, and the closure or temporary shutdown of Bitcoin exchanges due to fraud, business failure, hackers, malware, or government-mandated regulation may reduce confidence in Bitcoin and result in greater volatility in the prices of Bitcoin.
Bank Secrecy Act, Gryphon may be required to comply with FinCEN regulations, including those that would mandate Gryphon to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records. 32 To the extent that Gryphon’s activities cause Gryphon to be deemed a money transmitter or equivalent designation under state law in any state in which Gryphon operates, Gryphon may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, maintenance of certain records and other operational requirements.
To the extent that our activities would cause us to be deemed a "money transmitter" or equivalent designation under state law in any state in which we may operate, we may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, including implementing a know-your-counterparty program and transaction monitoring, maintenance of certain records, and other operational requirements.
If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated to mining on any digital asset network, including the Bitcoin network, it may be able to alter the blockchain by constructing alternate blocks if it is able to solve for such blocks faster than the remainder of the miners on the blockchain can add valid blocks.
If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated to mining on any digital asset network, including the Bitcoin network, it may be able to alter the blockchain by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner or at all.
Additionally, laws, regulations or other factors may prevent Gryphon from benefitting from the new asset even if there is a safe and practical way to custody and secure the new asset. 30 The impacts of climate change may result in additional costs or risks.
Additionally, laws, regulations, or other factors may prevent us from benefiting from the new asset even if there is a safe and practical way to custody and secure the new asset.
One or more countries such as China and Russia, which have taken harsh regulatory action in the past, may take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use these cryptocurrency assets or to exchange for fiat currency.
Although currently digital assets generally are not regulated or are lightly regulated in most countries, countries such as China have taken harsh regulatory action to curb the use of digital assets and may continue to take regulatory action in the future that could severely restrict the right to acquire, own, hold, sell, or use these digital assets or to exchange them for fiat currency.
If a court were to find the exclusive forum provision in Gryphon’s amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, Gryphon may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm Gryphon’s results of operations.
If a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations.
Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in Bitcoin-related activities or that accept bitcoin as payment, including financial institutions of investors in Gryphon’s common stock.
Banks and financial institutions may not provide banking services or may cut off services to businesses that provide digital asset-related services or that accept digital assets as payment.
The open-source structure of the Bitcoin network protocol means that the contributors to the protocol are generally not directly compensated for their contributions in maintaining and developing the protocol. A failure to properly monitor and upgrade the protocol could damage the Bitcoin network and an investment in Gryphon.
A failure to properly monitor and upgrade the Bitcoin network’s protocol could damage that network and an investment in our securities. As an open-source project, Bitcoin does not generate revenues for its contributors and contributors are generally not compensated for maintaining and updating the Bitcoin network protocol.
The market price of Gryphon’s common stock may fluctuate significantly in response to numerous factors, many of which are beyond Gryphon’s control, including: ● overall performance of the equity markets; ● Gryphon’s operating performance and the performance of other similar companies; ● the published opinions and third-party valuations by banking and market analysts; ● changes in Gryphon’s projected operating results that it provides to the public, Gryphon’s failure to meet these projections or changes in recommendations by securities analysts that elect to follow Gryphon’s common stock; ● regulatory or legal developments in the United States and other countries; ● the level of expenses related to operations; ● Gryphon’s failure to achieve its goals in the timeframe it announces; ● announcements of acquisitions, strategic alliances or significant agreements by Gryphon; ● recruitment or departure of key personnel; ● the economy as a whole and market conditions in Gryphon’s industry; ● trading activity by a limited number of stockholders who together beneficially own a majority of Gryphon’s outstanding common stock; ● the size of Gryphon’s market float; ● political uncertainty and/or instability in the United States; ● the ongoing and future impact of the COVID-19 pandemic and actions taken to slow its spread; and ● any other factors discussed in this Report. 39 In addition, the equity markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many data mining and cryptocurrency companies.
The market price of our Class A common stock has been, and is likely to continue to be, volatile and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • volatility in the price of Bitcoin • overall performance of the equity markets; • our operating performance and the performance of other similar companies; • the published opinions and third-party valuations by banking and market analysts; • changes in our projected operating results, if any, that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts; 28 Table of Contents • regulatory or legal developments; • the level of expenses related to operations; • our failure to achieve our goals in the timeframe we announce; • announcements of acquisitions, strategic alliances, or significant agreements by us; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry; • trading activity by stockholders who may own or transact in significant amounts of our Class A common stock, including upon the expiration of any contractual restrictions; • the size of our public float; • political uncertainty and/or instability in the United States; and • any other factors discussed in this Annual Report and our other filings with the SEC.
This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with Gryphon or its directors, officers or other employees, which may discourage lawsuits against Gryphon or its directors, officers and other employees.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees, or stockholders, which may discourage lawsuits with respect to such claims.
The factors include, but are not limited to: ● continued worldwide growth in the adoption and use of Bitcoin as a medium of exchange; ● governmental and quasi-governmental regulation of Bitcoin and its use, or restrictions on or regulation of access to and operation of the Bitcoin network or similar cryptocurrency systems; ● changes in consumer demographics and public tastes and preferences; ● the maintenance and development of the open-source software protocol of the network; ● the increased consolidation of contributors to the Bitcoin blockchain through mining pools; ● the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; ● the use of the networks supporting cryptocurrencies for developing smart contracts and distributed applications; ● general economic conditions and the regulatory environment relating to cryptocurrencies; and ● negative consumer sentiment and perception of Bitcoin specifically and cryptocurrencies generally.
Other factors that could affect further development and acceptance of digital asset networks and other digital assets include: • continued worldwide growth in the adoption and use of digital assets as a medium of exchange or store of value; • governmental regulation of Bitcoin and its use or restrictions on or regulation of access to and operation of the Bitcoin network or similar digital asset systems; 12 Table of Contents • limitations on financial institutions processing funds for Bitcoin transactions, processing wire transfers to or from Bitcoin exchanges, Bitcoin-related companies, or service providers, or servicing or maintaining accounts for persons or entities transacting in Bitcoin; • changes in consumer demographics and public tastes and preferences; • the maintenance and development of the open-source software protocol of the network, including software updates and changes to network protocols that could introduce bugs or security risks; • the increased consolidation of contributors to the Bitcoin blockchain through mining pools; • the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; • the use of the networks supporting digital assets for developing smart contracts and distributed applications; • general economic conditions and the regulatory environment relating to digital assets; • environmental and other regulatory restrictions on the use of power to mine Bitcoin and a resulting decrease in global Bitcoin mining operations; • an increase in Bitcoin transaction costs and a resultant reduction in the use of and demand for Bitcoin; and • negative consumer sentiment and perception of Bitcoin specifically and digital assets generally.
Furthermore, there can be no assurances that Gryphon will recognize, in a timely manner or at all, the benefits that Gryphon may expect as a result of implementing new technology into its operations. As a result, Gryphon’s business and operations may suffer.
Furthermore, there can be no assurances that we will recognize, in a timely manner or at all, the benefits that we may expect as a result of implementing new technology into our operations. For example, increasing use of AI may expose us to social and ethical issues, which may result in reputational harm and liability.
The occurrence of any of these events could have a material adverse effect on Gryphon’s business, financial condition and results of operations.
The measures we take to protect against these risks may not be sufficient. The occurrence of any of these events may have a material adverse effect on our business, financial condition, and results of operations.
Market and financial conditions, and other conditions beyond Gryphon’s control, may make it more attractive to invest in other financial vehicles, or to invest in Bitcoin directly.
Market and financial conditions and other conditions beyond our control may make it more attractive to invest in other financial vehicles or to invest in Bitcoin directly, which could limit the market for shares of our Class A common stock and reduce liquidity.
Gryphon may not be able to realize the economic benefit of a fork, either immediately or ever, which could adversely affect Gryphon’s business. If Gryphon holds bitcoin at the time of a hard fork into two cryptocurrencies, industry standards would dictate that Gryphon would be expected to hold an equivalent amount of the old and new assets following the fork.
It may be unclear following a fork which fork represents the original asset and which is the new asset. If we hold Bitcoin at the time of a hard fork into two digital assets, industry standards would dictate that we would be expected to hold an equivalent amount of the old and new assets following the fork.
If Gryphon were to become involved in securities litigation, it could subject Gryphon to substantial costs, divert resources and the attention of management from Gryphon’s business and adversely affect its business.
In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, financial condition, and results of operations.
However, Gryphon’s amended and restated certificate of incorporation contains a federal forum provision which provides that unless Gryphon consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Our Charter also provides that the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act of 1933, as amended (the "Securities Act").
Gryphon’s mining operations can only be successful and profitable if the costs of mining Bitcoin, including hardware and electricity costs, associated with mining Bitcoin are lower than the price of a bitcoin.
Our Bitcoin mining operations can only be profitable if the costs, inclusive of hardware and electricity costs, associated with mining Bitcoin are lower than the price of the Bitcoin mined at the time of sale. As the cost of obtaining new Bitcoin miners increases, the cost of producing Bitcoin also increases.
Department of Treasury (“OFAC”) requires Gryphon to comply with its sanction program and not conduct business with persons named on its specially designated nationals list. However, because of the pseudonymous nature of blockchain transactions, Gryphon may inadvertently and without Gryphon’s knowledge engage in transactions with persons named on OFAC’s specially designated nationals list.
However, because of the pseudonymous nature of blockchain transactions, we may inadvertently and without our knowledge engage in transactions with persons named on OFAC’s SDN list.
The expectation is that Gryphon will retain future earnings for the development, operation and expansion of Gryphon’s business and Gryphon does not anticipate declaring or paying any cash dividends for the foreseeable future.
We have never declared or paid any cash dividend on our Class A common stock. We expect we will retain future earnings for the development, operation, and expansion of our business and we do not anticipate declaring or paying any cash dividends for the foreseeable future.
Despite Gryphon’s efforts and processes to prevent breaches, Gryphon’s devices, as well as Gryphon’s miners, computer systems and those of third parties that Gryphon uses in its operations, are vulnerable to cybersecurity risks, including cyberattacks such as viruses and worms, phishing attacks, denial-of-service attacks, physical or electronic break-ins, employee theft or misuse, and similar disruptions from unauthorized tampering with Gryphon’s miners and computer systems or those of third parties that Gryphon uses in its operations.
Despite our efforts and processes in place to prevent them, our computer servers and systems may be vulnerable to cybersecurity risks, including denial-of-service attacks, physical or electronic break-ins, social engineering attacks, including phishing and business email compromise, employee theft or misuse, and similar disruptions from unauthorized tampering.
Gryphon’s amended and restated bylaws provide that, unless it consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of Gryphon, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Gryphon to Gryphon or Gryphon’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or the amended and restated certificate of incorporation or amended and restated bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine will be the Court of Chancery of the State of Delaware (or if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware, or if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
Our Charter provides that the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) is the sole and exclusive forum for (i) any derivative action, suit, or proceeding brought on behalf of us; (ii) any action, suit, or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (iii) any action, suit, or proceeding arising pursuant to the Delaware General Corporation Law (the "DGCL") or our Charter or our bylaws (the "Bylaws") (as any of the foregoing may be amended from time to time); (iv) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Chancery Court; or (v) any action, suit, or proceeding asserting a claim governed by the internal affairs doctrine.
While Bitcoin prices have historically increased around these halving events, which increases in price have correspondingly mitigated the decrease in mining reward, there is no guarantee that the price change would be favorable or would compensate for the reduction in mining reward.
While the Bitcoin price has had a history of price fluctuations around the halving of our rewards, there is no guarantee that in future periods when a halving occurs the price change will be favorable or would compensate for the reduction in mining reward.
For example, in the first half of 2022, each of Celsius Network LLC, et al. (“Celsius”), Voyager Digital Ltd., et al. (“Voyager”), and Three Arrows Capital (“Three Arrows”) declared bankruptcy, resulting in a loss of confidence among participants in the crypto asset ecosystem and negative publicity surrounding crypto assets more broadly. In November 2022, BlockFi Inc.
During 2022 and early 2023, some well-known digital asset market participants, including Celsius Network, Voyager Digital Ltd., Three Arrows Capital, and Genesis Global Holdco LLC, declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem, negative publicity surrounding digital assets more broadly, decreased liquidity, and extreme price volatility.
Gryphon may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner it determines from time to time. If Gryphon sells common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales.
If we sell common stock, convertible securities, or other equity securities in more than one transaction, investors are likely to be materially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders and new investors could gain rights superior to existing stockholders.
Gryphon does not currently intend to pay dividends on its common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of Gryphon’s common stock. Gryphon has never declared or paid any cash dividend on Gryphon’s common stock.
See " Description of Capital Stock " in Exhibit 4.1 to this Annual Report. We do not expect to pay dividends on our Class A common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our Class A common stock.
There is no guarantee that shares of Gryphon’s common stock will appreciate in value or even maintain the price at which stockholders have purchased their shares. 43 There can be no assurance that we will continue to be able to comply with the continued listing standards of Nasdaq.
There is no guarantee that shares of our Class A common stock will appreciate in value or even maintain the price at which stockholders have purchased their shares. Key members of our management team have limited experience managing a public company.
The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives. The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or an alternative to distributed ledgers altogether.
If the award of Bitcoin rewards for solving blocks and transaction fees are not sufficiently high, we may not have an adequate incentive to continue mining and may decrease or cease our Bitcoin mining operations. The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives.
To the extent that the digital assets ecosystems do not act to ensure greater decentralization of digital asset mining processing power, the feasibility of a malicious actor obtaining in excess of 50% of the processing power on any digital asset network (e.g., through control of a large mining pool or through hacking such a mining pool) will increase, which may adversely impact an investment in Gryphon.
To the extent that the Bitcoin or other digital asset ecosystems, including developers and administrators of mining pools, do not act to ensure greater decentralization of Bitcoin or other digital asset mining processing power, the feasibility of a malicious actor obtaining control of the processing power on the Bitcoin or other network will increase, which may adversely impact our business, financial condition, and results of operations. 15 Table of Contents Forks in the Bitcoin network may occur in the future, which may affect the value of Bitcoin held by us.
Such factors could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and harm investors. 35 It may be illegal now, or in the future, to acquire, own, hold, sell or use bitcoin, ether, or other cryptocurrencies, participate in blockchains or utilize similar cryptocurrency assets in one or more countries, the ruling of which would adversely affect Gryphon.
To the extent investors view our securities as linked to the value of our Bitcoin holdings, such a negative perception of Bitcoin exchanges could have a material adverse effect on the market price of our Class A common stock and our business, financial condition, and results of operations. 14 Table of Contents It may be illegal now, or in the future, to acquire, own, hold, sell, or use Bitcoin or other digital assets, participate in blockchains, or utilize similar digital assets in one or more countries.
Such circumstances could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue its strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any bitcoin that Gryphon mines or otherwise acquires or holds for its own account, and harm investors.
Such circumstances could have a material adverse effect on our business, financial condition, and results of operations, and potentially the value of any Bitcoin that we mine or otherwise acquire or hold for our own account, ultimately harming our investors.
Similarly, a number of companies and individuals or businesses associated with Bitcoin may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions in response to government action, particularly in China, where regulatory response to cryptocurrencies has been to exclude their use for ordinary consumer transactions within China.
A number of companies and individuals or businesses associated with digital assets have had, and may continue to have, their existing bank accounts closed, or services discontinued, with financial institutions. We also may be unable to maintain these services for our business.
The further development and acceptance of digital asset networks and other digital assets, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate.
The further development and acceptance of the Bitcoin network and other digital assets is subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of Bitcoin and other digital asset systems may adversely affect our business, financial condition, and results of operations.
Gryphon’s operations, investment strategies and profitability may be adversely affected by competition from other methods of investing in Bitcoin. Gryphon competes with other users and/or companies that are mining Bitcoin and other potential financial vehicles, including securities backed by or linked to Bitcoin through entities similar to Gryphon.
Our operations, investment strategies, and profitability may be adversely affected by competition from other methods of investing in Bitcoin.
Gryphon’s management and other personnel will need to devote a substantial amount of time to these requirements. Certain members of Gryphon’s management do not have significant experience in addressing these requirements. Moreover, these rules and regulations increase Gryphon’s legal and financial compliance costs and will make some activities more time-consuming and costly.
Moreover, these rules and regulations increase our legal and financial compliance costs and will make some activities more time-consuming and costly.
Should the algorithm shift from a proof of work validation method to a proof of stake method, mining would require less energy and may render any company that maintains advantages in the current climate (for example, from lower priced electricity, processing, real estate, or hosting) less competitive.
Should the Bitcoin network shift from the current "proof of work" validation method to a "proof of stake" validation method, mining would require less energy, which may render companies, such as us, less competitive.
Gryphon’s business utilizes presently existent digital ledgers and blockchains and Gryphon could face difficulty adapting to emergent digital ledgers, blockchains, or alternatives thereto. This may adversely affect Gryphon and Gryphon’s exposure to various blockchain technologies and prevent Gryphon from realizing the anticipated profits from its investments.
The development and acceptance of competing blockchain platforms or technologies may cause industry participants and consumers to abandon Bitcoin. As Bitcoin is the only digital asset we mine, we could face difficulty adapting to emergent digital ledgers, blockchains, or alternatives thereto. This could prevent us from realizing the anticipated profits from our investments.
Such circumstances could have a material adverse effect on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations and potentially the value of any Bitcoin that Gryphon mines or otherwise acquires or holds for its own account, and harm investors.
Such circumstances could have a material adverse effect on our business, financial condition, and results of operations and the value of any Bitcoin that we mine or otherwise acquire or hold for our own account.
The outcome of these factors could have negative effects on Gryphon’s ability to continue as a going concern or to pursue Gryphon’s business strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations as well as a potentially negative effect on the value of any bitcoin that Gryphon mines or otherwise acquires or holds for Gryphon’s own account, which would harm investors.
The outcome of these and other factors could have negative effects on our business, financial condition, and results of operations as well as potentially negative effects on the value of any Bitcoin that we mine or otherwise acquire or hold for our own account, which would harm investors in our securities and adversely affect the market price of our Class A common stock.
To the extent such private keys are lost, destroyed or otherwise compromised, Gryphon will be unable to access its bitcoin rewards and such private keys may not be capable of being restored by any network.
While we rely on third-party providers to safeguard private keys, to the extent a private key is lost, destroyed, or otherwise compromised and no backup is accessible, we will be unable to access the related Bitcoin, and such private key cannot be restored by the Bitcoin network.
Adverse changes to, or its failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on its reputation and brand and its business, operating results, and financial condition.
Adverse changes to, or our failure to comply with, any laws and regulations may have an adverse effect on our business, financial condition, and results of operations. The application of the CEA and the regulations promulgated thereunder by the CFTC to our business is unclear and is subject to change in a manner that is difficult to predict.
The stock price of the Company’s common stock may be volatile or may decline regardless of its operating performance and you may not be able to resell your shares at or above the purchase price. An active trading market for Gryphon’s common stock may not be sustained.
Risks Related to Ownership of Our Class A Common Stock The market price of our Class A common stock may be volatile or may decline regardless of our operating performance. Although our Class A common stock is listed on Nasdaq, an active trading market for our Class A common stock may never develop or be sustained.
As a result, the value of Bitcoin could decrease, which could have a material adverse effect on Gryphon’s business, prospects, financial condition, and operating results. 20 If a malicious actor or botnet obtains control in excess of 50% of the processing power active on any digital asset network, including the Bitcoin network, it is possible that such actor or botnet could manipulate the blockchain in a manner that adversely affects an investment in Gryphon.
If a malicious actor or botnet obtains control of a majority of the processing power active on any digital asset network, including the Bitcoin network, the blockchain may be manipulated in a manner that adversely affects us.
If our imported mining equipment is detained or seized in the future, we may not be able to obtain adequate replacement parts for our existing miners and other equipment or obtain additional miners and other equipment from manufacturers on a timely basis or at all, which could have a material adverse effect on our results of operations and financial condition.
If the Hut 8 Agreements are terminated or not renewed, we may not be able to find an alternative provider for such services on favorable terms or at all, which is likely to have a material adverse effect on our business, financial condition, and results of operations.
To the extent that a significant majority of users and miners on a cryptocurrency network install software that changes the cryptocurrency network or properties of a cryptocurrency, including the irreversibility of transactions and limitations on the mining of new cryptocurrency, the cryptocurrency network would be subject to new protocols and software.
Contributors can propose refinements or improvements to the Bitcoin network’s source code that alter the protocols and software that govern the Bitcoin network and the properties of Bitcoin, including the irreversibility of transactions and limitations on the mining of new Bitcoin.
Sales of a substantial number of shares of Gryphon’s common stock by Gryphon’s stockholders in the public market could cause Gryphon’s stock price to fall.
Pursuant to this automatic increase and subsequent issuances under the 2025 Plan, stockholders may experience additional dilution, which could cause the market price of our Class A common stock to fall. Sales of a substantial number of shares of Class A common stock or other securities by our stockholders could cause our Class A common stock price to fall.
Sales of these shares, or perceptions that they will be sold, could cause the trading price of Gryphon’s common stock to decline. 41 Future sales and issuances of Gryphon’s common stock or rights to purchase common stock, including in connection with pending acquisitions or pursuant to Gryphon’s equity incentive plan, could result in dilution of the percentage ownership of its stockholders and could cause Gryphon’s stock price to fall.
Future sales and issuances of our Class A common stock or rights to purchase Class A common stock, including pursuant to the 2025 Plan, could result in dilution and could cause the market price of our Class A common stock to fall. Additional capital will be needed to continue our planned operations and pursue our strategy.
Such a decrease in Bitcoin price may have a material and adverse effect on Gryphon’s results of operations and financial condition as the results of Gryphon’s operations are significantly tied to the price of Bitcoin.
In either case, this may have a negative effect on the trading price of Bitcoin or otherwise negatively impact our business, financial condition, and results of operations.
Furthermore, Gryphon and its service providers may not be capable of complying with certain federal or state regulatory obligations applicable to money service businesses and money transmitters. If Gryphon is deemed to be subject to and determined not to comply with such additional regulatory and registration requirements, Gryphon may act to dissolve and liquidate Gryphon.
Such additional federal or state regulatory obligations may cause us to incur extraordinary expenses. Furthermore, we may not be capable of complying with certain federal or state regulatory obligations applicable to "money services businesses" and "money transmitters," such as monitoring transactions and blocking transactions, because of the nature of the Bitcoin blockchain.
The most recent halving for Bitcoin happened on April 19, 2024, and the reward reduced to 3.125. This process will reoccur until the total amount of bitcoin currency rewards issued reaches 21 million, which is expected around 2140.
At a predetermined block, the mining reward is cut in half, hence the term "halving." For example, the mining reward for Bitcoin declined from 6.25 to 3.125 Bitcoin on April 19, 2024. This process is scheduled to occur once every 210,000 blocks, until the total amount of Bitcoin rewards issued reaches 21 million.
These risks may negatively affect our financial condition and results of operations. We may experience liquidity constraints and need additional capital, which may not be available to us on favorable terms, or at all. Liquidity risk is the possibility that we will be unable to meet our financial obligations as they come due.
" We expect to raise significant amounts of additional capital to execute our strategy. We may be unable to raise the additional capital needed to operate and grow our business. Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Item 1C. Cybersecurity. Information Security Program The mission of our information security organization is to design, implement, and maintain an information security program that protects our systems, services, and data against unauthorized access, disclosure, modification, damage, and loss. The information security organization is comprised of internal and external security and technology professionals.
Added
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy Given the inherent and growing risks of our business, we recognize the importance of incorporating, monitoring, and updating cybersecurity risk programs as part of operating, management, and governance practices. Through our Shared Services Agreement, we primarily leverage and rely on Hut 8’s cybersecurity program for risk management and strategy.
Removed
We continue to make investments in information security resources to mature, expand, and adapt our capabilities to address emerging cybersecurity risks and threats. 45 Cybersecurity Risk Management and Strategy Cybersecurity risk management is one component of our information security program that guides continuous improvement to, and evaluates the confidentiality, integrity, and availability of our critical systems, data, and operations.
Added
Hut 8’s Cybersecurity Program has been designed to monitor, manage, and mitigate cybersecurity risks across the enterprise, including those relevant to us.
Removed
Our approach to controls and risk management is based on guidance from the National Institute of Standards and Technology (“NIST”) and the Crypto Currency Security Standard (“CCSS”).
Added
The supporting Cyber Security Policy establishes a cybersecurity framework by defining security responsibilities, access controls, data protection standards, and required technical safeguards intended to protect systems, information, and digital assets. 34 Table of Contents Hut 8’s Cybersecurity Program and Policy are currently owned by its Chief Legal Officer and Corporate Secretary, working in coordination with its IT function and our management, as appropriate.
Removed
This does not mean that we meet any particular technical standards, specifications, or requirements, but rather that we use the NIST and CCSS as a guide to help us identify, assess, and manage cybersecurity controls and risks relevant to our business.
Added
Hut 8 leverages the insights and expertise of its retained Security Advisory Partner, who provides strategic and technical guidance to Hut 8’s internal team and supplements staffing to assist with day-to-day cybersecurity and related tasks, including services that support our operations.
Removed
Our cybersecurity risk management program includes: ● Identifying cybersecurity risks that could impact our facilities, third-party vendors/partners, operations, critical systems, information, and broader enterprise IT environment.
Added
Hut 8’s Security Advisory Partner is responsible for the design and implementation of Hut 8’s information security strategy and works in conjunction with Hut 8’s internal team to collaboratively spearhead cybersecurity efforts, focusing on standards, policy creation and implementation, architecture, and processes.
Removed
Risks are informed by threat intelligence, current and historical adversarial activity, and industry specify threats; ● Performing a cybersecurity risk assessment to evaluate our readiness if the risks were to materialize; and ● Ensuring risk is addressed and tracking any necessary remediation through an action plan.
Added
We believe that Hut 8’s internal team and its Security Advisory Partner, which collectively possess extensive experience and industry-recognized cybersecurity certifications, are qualified to address a wide range of complex cybersecurity demands, including risk assessments, security operations, and incident remediation. Hut 8’s internal team and Security Advisory Partner assess the enterprise security posture on a regular basis.
Removed
While we face a number of ongoing cybersecurity risks in connection with our business, such risks have not materially affected us to date, including our business strategy, results of operations, or financial condition.
Added
To the extent such assessments are relevant to our business, the results are communicated to our senior management and, as appropriate, to our Board or Audit Committee. Cybersecurity incidents affecting our business are addressed under Hut 8’s Incident Response Plan.
Removed
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated the oversight of cybersecurity and other information technology risks to the Board’s Audit Committee as well as hiring a third party vendor that specializes in cybersecurity to oversee and provide an assessment on the Company’s IT controls.
Added
Hut 8 maintains an Incident Response Team comprised of members of its internal teams and its Security Advisory Partner, which is responsible for leading the response to cybersecurity incidents, including those that may impact us.
Removed
The Audit Committee meets at least quarterly to discuss matters involving cybersecurity risks. The Audit Committee ultimately provides information to our board members regarding its activities, including those related to cybersecurity risks. The Audit Committee also receives a briefing and continuing education from a member of the third party vendor relating to our cyber risk management program at least annually.
Added
The Incident Response Plan outlines processes to identify, report, investigate, contain, and remediate cybersecurity incidents and is designed to facilitate the timely escalation of potentially material incidents to appropriate management and governance bodies to support compliance with applicable disclosure obligations under U.S. federal securities laws.
Removed
The third party vendor is responsible for notifying the Audit Committee of material cybersecurity incidents. Cybersecurity Incidents In 2023, a threat actor representing to be the Sphere 3D Corp.
Added
We, Hut 8, and our counterparties, along with other companies in our industry, have been subject to, and are likely to continue to be the target of, cyber-attacks, as discussed in more detail in " Item 1A.
Removed
(“Sphere 3D”) CFO inserted themselves into an email exchange between the Sphere 3D CFO and the Company’s former CEO, which also included Sphere 3D’s CEO, regarding the transfer of Sphere 3D’s BTC from the Company’s wallet to Sphere 3D’s wallet. The threat actor requested that the BTC be transferred to an alternate wallet.
Added
Risk Factors ." Through Hut 8’s Third Party Risk Management process, material risks, including cybersecurity threats, stemming from engagement with third-party service providers are assessed and monitored.
Removed
As a result, 26 BTC, with a value of approximately $560,000 at the time, was transferred to a wallet controlled by the threat actor. Via counsel, Gryphon engaged with US Federal law enforcement to recover the BTC. Despite these attempts by law enforcement to recover the BTC, recovery was not possible.
Added
This process is designed to ensure that vendors presenting material technology or cybersecurity risks are subjected to a rigorous privacy and security review prior to engagement and thereafter monitored continuously for compliance with applicable security standards. Despite the efforts and investments made, not all threats may be prevented.
Removed
Gryphon subsequently wired the commensurate amount in USD to Sphere 3D to make them whole for the stolen BTC. Gryphon also engaged a nationally recognized third-party firm to perform a forensic analysis. The analysis revealed that the threat actor did not enter the email exchange via Gryphon’s IT systems.
Added
To date, we have not identified any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect , our business, financial condition, or results of operations; however, there can be no assurance that future incidents will not have a material impact. See " Item 1A.
Removed
The Company has also subsequently modified its control systems to protect against any future attempted incursions. During the quarter ended June 30, 2023, the Company made a payment to Sphere 3D for $560,000, which was classified as a general and administrative expense on Gryphon’s consolidated statement of operations.
Added
Risk Factors ." Cybersecurity Governance Under the Shared Services Agreement, day-to-day identification, evaluation, and management of cybersecurity risks are conducted by Hut 8 in coordination with our management, under the oversight of our Board and Audit Committee.
Added
Our Audit Committee is responsible for overseeing our enterprise risk management processes, including our processes for risk assessment and risk management, which include cybersecurity.
Added
In addition, our Audit Committee is presented with information at its regularly scheduled and special meetings, including on risk and security posture, security initiatives and programs, and emerging conditions, and management may provide more frequent, informal communications to the Board or Audit Committee between regularly scheduled meetings, as appropriate.
Added
Our Board or Audit Committee, as applicable, reviews this information and delivers strategic feedback, offers recommendations, and, when necessary, grants authorization or directs management to mitigate specific risk exposures.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. The principal executive offices of Gryphon are located at 1180 N. Town Center Drive, Suite 100, Las Vegas, NV 89144, and its telephone number is (702) 945-2700. We consider our current office space adequate for our current operations. 46
Added
Item 2. Properties We do not own or lease any real property for our corporate offices. We currently operate out of facilities provided by Hut 8 at 1101 Brickell Avenue, Suite 1500, Miami, FL 33131.
Added
We believe that our office space is suitable for our current needs and, facilities, to the extent needed to meet future needs, may be obtained on commercially reasonable terms.
Added
We use Hut 8's facilities for our Bitcoin mining operations pursuant to a MCSA, under which we generally pay a monthly fee for the use, operation, and maintenance of the relevant facility. Pursuant to an Exclusivity Agreement, Hut 8 is the exclusive provider of hosting and colocation services with respect to our digital asset mining equipment.
Added
See " Our Business — Material Agreements. " We believe Hut 8's existing facilities are sufficient for our current needs and that, should it be needed, suitable additional or alternative facilities will be available from Hut 8 to accommodate our Bitcoin mining operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings. Sphere 3D Litigation On April 7, 2023, Sphere 3D filed an action against Gryphon in the U.S.
Added
Item 3. Legal Proceedings For a description of material legal proceedings in which we are involved, see Note 15. Commitments and contingencies to our combined financial statements included elsewhere in this Annual Report, which is incorporated herein by reference.
Removed
District Court for the Southern District of New York, alleging claims for breach of the Sphere MSA entered between the parties on August 19, 2021, and subsequently amended on December 29, 2021, as well as claims for breach of the implied covenant of good faith and fair dealing and breach of fiduciary duty.
Added
We are not presently a party to any other legal or regulatory proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, or results of operations.
Removed
On June 15, 2023, Sphere 3D filed an amended complaint in connection with the Sphere 3D Litigation, which clarified certain of Sphere 3D’s prior allegations.
Added
However, we are subject to regulatory oversight by numerous federal, state, provincial, local, and other regulators and we are, and we may become, subject to various legal proceedings, inquiries, investigations, and demand letters that arise in the course of our business. 35 Table of Contents See " Risk Factors—Risks Related to Certain Regulations and Laws, Including Tax Laws—We may be involved in legal proceedings from time to time, which could adversely affect us ." Item 4.
Removed
On June 28, 2023, Gryphon requested leave to file a motion to dismiss Sphere 3D’s claims for breach of fiduciary duty and breach of the implied covenant of good faith and fair dealing, which the Court granted on August 11, 2023.
Removed
On August 18, 2023, Gryphon filed: (i) its motion to dismiss Sphere 3D’s claims for breach of fiduciary duty and breach of the implied covenant of good faith and fair dealing; and (ii) its answer and counterclaims against Sphere 3D, asserting, among other things, that Sphere had breached the Sphere MSA, breached the implied covenant of good faith and fair dealing in connection with that contract, acted negligently in connection with a separate incident, and defamed Gryphon.
Removed
Gryphon’s answer and counterclaims further asserted the defamation counterclaim against Sphere 3D’s Chief Executive Officer, Patricia Trompeter, personally. On September 20, 2023, Sphere 3D filed a second amended complaint in connection with the Sphere 3D Litigation, which added a claim against Gryphon alleging that Gryphon’s counterclaim for defamation against Sphere 3D violated New York’s anti-SLAPP law.
Removed
On October 6, 2023, Sphere 3D delivered a purported termination notice to Gryphon (the “Sphere 3D MSA Termination”) regarding the Master Service Agreement (“MSA”) previously entered by the parties on August 19, 2021, and subsequently amended on December 29, 2021, largely on the basis of the deficient allegations made by Sphere 3D in the Sphere 3D Litigation.
Removed
On January 17, 2024, Gryphon filed an amended answer with fourth amended counterclaims to Sphere 3D’s second amended complaint, in which, among other things, Gryphon alleged that Sphere 3D’s attempted termination of the Sphere MSA was wrongful and ineffective because it violated the express terms of the MSA.
Removed
Gryphon is also seeking relief based on Sphere’s repeated breaches of the exclusivity terms of the MSA. Gryphon intends to continue to vigorously defend against the Sphere 3D Litigation, which it believes is without merit, and to aggressively pursue its counterclaims against Sphere 3D for Sphere 3D’s repeated violations of the MSA.
Removed
On February 1, 2024, Gryphon filed an amended answer and its own counterclaim against Sphere 3D.
Removed
Gryphon’s counterclaim alleges that Sphere 3D flagrantly and repeatedly breached the terms of the MSA, including, among other breaching conduct, entering into multiple bitcoin mining hosting agreements with third-parties in violation of the MSA’s exclusivity clause and improperly terminating the MSA on October 6, 2023.
Removed
On March 25, 2024, Gryphon filed a pre-motion letter with the Court seeking pre-judgment attachment of the equity shares in Core that Sphere 3D received as a result of the Core Settlement (as defined below) to secure a judgment against Sphere 3D.
Removed
On June 27, 2024, during a discovery conference, Sphere 3D agreed that it was not seeking to impose any liability against Gryphon for events that occurred in late February 2023 whereby a hostile actor impersonated Sphere 3D’s chief financial officer in an email sent to both Sphere 3D and Gryphon’s personnel and requested the transfer of bitcoin (worth approximately $560,000) from a Sphere 3D wallet controlled by Gryphon.
Removed
Subsequent to December 31, 2024, on March 7, 2025, Gryphon and Sphere 3D entered into a settlement and release agreement on mutually acceptable terms. The Settlement Agreement fully resolved all pending litigation between Gryphon and Sphere, and each party fully released the other party from any known or unknown and unsuspected claims.
Removed
The Settlement Agreement further provided that each party will bear its own costs in connection with the litigation. 47 PPP Loan On April 21, 2020, the Company obtained a loan in the principal aggregate amount of $2.2 million (the “PPP Loan”) pursuant to the Paycheck Protection Program under the CARES Act, which was forgiven in full, by the SBA, on September 3, 2021.
Removed
On February 5, 2024, the Company received a letter, dated January 25, 2024, from the SBA, on behalf of Key Bank, in which the SBA indicated that, notwithstanding its prior notification of forgiveness, in full, of repayment of the PPP Loan, it was reviewing its prior determination of forgiveness for potential reversal.
Removed
Specifically, the SBA indicated that based on its preliminary findings, the SBA is considering a full denial of the previously received forgiven amount based on the purported ineligibility of the Company to have received the PPP Loan under the SBA loan programs because the Company, operating as Akerna at the time of the PPP Loan, provided software support to the cannabis industry.
Removed
The Company responded to the SBA on February 6, 2024, providing reasons as to why it believes it was eligible for the PPP Loan, but has not received any further correspondence from the SBA, since that date, and the SBA has not made any financial demands. The Company plans to continue to cooperate with any further inquiry from the SBA.
Removed
In January 2024, the Company received a civil investigative demand from the DOJ seeking information and documents about the PPP Loan. The Company is cooperating with the inquiry. At this time, there has been no formal demand for return of the PPP Loan proceeds, and no formal claim or lawsuit has been initiated against the Company.
Removed
Former CEO Litigation As previously disclosed, on September 17, 2024, Robby Chang was terminated as Chief Executive Officer and President of Gryphon for cause, with immediate effect, by the Board. Mr. Chang remains a member of the Board.
Removed
On October 21, 2024, the Company received notice that both it and Ivy Crypto, Inc., a wholly owned direct subsidiary of the Company, have been named as defendants in a complaint filed by Mr. Chang in the Ontario Superior Court of Justice in Canada, alleging wrongful termination. The Company intends to defend this matter vigorously.
Removed
On October 22, 2024, the Board created a special committee to oversee the Company’s handling of the claim made by Mr. Chang, made up of Steve Gutterman, Jimmy Vaiopoulos, Dan Tolhurst and Jessica Billingsley.
Removed
The Company and Ivy Crypto, Inc. have served their Statement of Defense and the parties have agreed to proceed with a mediation of the dispute to be held on May 5, 2025. The potential outcome cannot be determined at this time. Item 4. Mine Safety Disclosures. Not applicable. 48 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Item 4. Mine Safety Disclosures 48 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuers Purchases of Equity Securities 49 Item 6. [Reserved] 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 50
Item 4. Mine Safety Disclosures 36 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 36 Item 6. [Reserved] 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. (a) Market Information Our shares of common stock are traded on the Nasdaq under the symbol “GRYP.” (b) Holders On March 31, 2025, there were 285 holders of record of shares of our common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our Class A common stock is listed on Nasdaq under the symbol "ABTC." Holders of Record As of March 25, 2026, there were 266 holders of record of our Class A common stock, 13 holders of record of our Class B common stock, and 0 holders of record of our Class C common stock.
Removed
(c) Dividends As of the date of this Report, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial position, the general economic conditions, and other pertinent conditions.
Added
Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. Dividend Policy We have never declared or paid dividends on our capital stock.
Removed
It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
Added
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and execute our strategic initiatives. As a result, we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future.
Removed
(d) Securities Authorized for Issuance Under Equity Compensation Plans Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 4,929,739 - 533,203 Equity compensation plans not approved by security holders - - - Total 4,929,739 - 533,203 (e) Recent Sales of Unregistered Securities There are no transactions that have not been previously disclosed in a Current Report on Form 8-K.
Added
Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will depend on, among other things, our business, financial condition, results of operations, cash requirements and availability, industry trends, and other factors that the Board may deem relevant.
Added
Any such decision also will be subject to compliance with contractual restrictions and covenants in the agreements governing our indebtedness. Issuer Purchases of Equity Securities None. Unregistered Sales of Equity Securities Except as previously reported in our Current Report on Form 8-K, there were no unregistered sales of equity securities by us during the year ended December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read together with our combined financial statements and the related notes and the other financial information included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties.
Critical Accounting Estimates The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our Combined Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Combined Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses.
We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable after taking into account our circumstances and expectations for the future based on available information. Our actual results could differ from these estimates.
We evaluate our estimates and assumptions on an ongoing basis and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for the judgments we make about the carrying value of assets and liabilities that are not readily apparent from other sources.
ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period.
Under ASU 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"), Bitcoin is revalued at its fair value at the end of each reporting period, with changes to fair value recognized in net (loss) income.
Impairment of digital assets Impairment of digital assets decreased to $0 for the year ended December 31, 2024 from $275,000 for the year ended December 31, 2023. The decrease was due to the implementation of ASU 2023-08 issued in December 2023.
The loss on digital assets for the year ended December 31, 2025 was primarily attributable to the decline in the price of Bitcoin, which decreased from approximately $93,354 as of December 31, 2024 to approximately $87,498 as of December 31, 2025.
Adjusted EBITDA is not a financial measure of performance under GAAP and, as a result, these measures may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP.
Because Adjusted EBITDA may be defined differently by other companies in our industry, its definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
Net cash provided by operating activities was approximately $3,011,000 for the year ended December 31, 2023, and consisted primarily of cash proceeds from the sale of digital assets of approximately $18,512,000, offset by cash expenditures for operating activities of approximately $15,501,000. 57 Net cash used in investing activities Net cash used in investing activities was approximately $2,747,000 for the year ended December 31, 2024, and consisted of (i) the purchase of mining equipment for approximately $1,075,000, (ii) cash disbursement of approximately $600,000 for co-location lease deposits, (iii) approximately $1,243,000 for a refundable deposit under assets acquisitions agreements and (iv) proceeds of $171,000 from the sale of miners.
Net cash used in investing activities totaled $66.6 million for the year ended December 31, 2024 and primarily reflects (i) $100.7 in purchases of digital assets, (ii) $29.1 million in deposits paid to purchase property and equipment, and (iii) $6.6 million in purchases of property and equipment, partially offset by $69.8 million in proceeds from Bitcoin sales.
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Information regarding market and industry statistics contained in this Report is included based on information available to the Company that the Company believes is accurate. It is generally based on industry and other publications that are not produced for purposes of securities offerings or economic analysis.
Added
Our actual business, financial condition, and results of operations could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report, particularly under "Item 1A. Risk Factors." See also "Cautionary Note Regarding Forward-Looking Statements" elsewhere in this Annual Report.
Removed
The Company has not reviewed or included data from all sources and cannot assure investors of the accuracy or completeness of the data included in this Report.
Added
Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Overview Our business objective is Bitcoin accumulation, and we aim to pursue that goal through a multi-pronged strategy that combines efficient Bitcoin mining, disciplined Bitcoin reserve expansion, and focused ecosystem engagement.
Removed
Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. The Company does not assume any obligation to update any forward-looking statement. As a result, investors should not place undue reliance on these forward-looking statements.
Added
We believe Bitcoin represents an emerging institutional-grade asset class that lacks a clear category leader in the form of a scaled, publicly traded platform purpose-built around Bitcoin accumulation, network participation, and ecosystem development. We are building American Bitcoin with the objective of becoming that platform. 2025 Highlights • Scaled Bitcoin Reserve.
Removed
The following discussion and analysis are intended as a review of significant factors affecting the Company’s financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with the Company’s consolidated financial statements and the notes presented herein.
Added
As of December 31, 2025, we accumulated approximately 5,401 Bitcoin in reserve, positioning us among the top 20 publicly traded Bitcoin treasury companies based on total Bitcoin holdings. As of March 25, 2026, we accumulated approximately 6,963 Bitcoin in reserve, positioning us among the top 16 publicly traded Bitcoin treasury companies based on total Bitcoin holdings.
Removed
Actual results could differ significantly from those expressed, implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the Securities and Exchange Commission. Business Overview Founded in October 2020, Gryphon has traditionally been a bitcoin mining company based in Las Vegas, Nevada.
Added
Our Bitcoin in reserve included 2,776 and 3,090 Bitcoin pledged for miner purchases as of December 31, 2025 and March 25, 2026, respectively. • Expansion of Mining Fleet. In August 2025, we purchased 16,299 Bitcoin miners, representing approximately 14.02 EH/s and in September 2025, we purchased an additional 981 Bitcoin miners, representing approximately 0.84 EH/s.
Removed
Gryphon launched its mining operations in September 2021 upon the receipt of the first of 12 batches of 600 Bitmain S19j Pro Antminers. Gryphon’s current revenue model is to mine and hold bitcoin, and then sell only the bitcoin that is necessary to pay its operating expenses and to reinvest in operational expansion.
Added
Subsequently, in February 2026, we purchased 11,298 Bitcoin miners, representing approximately 3.05 EH/s.
Removed
The bitcoin that is sold to pay operating expenses and to reinvest in operational expansion is typically sold within 24-hours of receipt. Gryphon operates approximately 9,660 bitcoin ASIC mining computers, referred to as “miners,” from Bitmain Technologies Limited (“Bitmain”) that Gryphon has installed at third-party hosted mining data centers located in New York and Pennsylvania.
Added
Upon the delivery and deployment of the recently purchased miners, our total owned fleet is expected to increase to approximately 89,000 miners, representing approximately 28.1 EH/s at an average fleet efficiency of 16.0 J/TH, and our operational fleet is expected to increase to approximately 59,000 miners, representing approximately 25.0 EH/s at an average efficiency of 14.1 J/TH. • Launch of 2025 At-The-Market Offering Program.
Removed
Revenue generated by the mining of bitcoin is measured on a dollar per megawatt-hour (“MWh”) basis and is variable based on the price of Bitcoin, the measure of difficulty, transaction volume and global hash rates. For the year ended December 31, 2024 and 2023, Gryphon mined approximately 334 and 739 bitcoins, respectively.
Added
On September 3, 2025, we entered into a Controlled Equity Offering Sales Agreement to establish an at-the-market equity program (the "2025 ATM"), allowing us to offer and sell up to $2.1 billion of our Class A common stock from time to time.
Removed
While Gryphon does not have any plans to acquire digital assets other than bitcoin, it may do so in the future.
Added
As of December 31, 2025, we issued and sold an aggregate of 65,485,198 shares of our Class A common stock under the 2025 ATM for gross proceeds of approximately $240.5 million. Issuance costs incurred under the 2025 ATM totaled approximately $2.8 million through December 31, 2025.
Removed
Breakeven Analysis Below is a breakeven analysis of Gryphon’s mining operations for years ended December 31, 2024 and 2023: 2024 2023 Mining revenues $ 20,539,000 $ 21,052,000 Bitcoin mined 334 739 Value of one mined bitcoin $ 61,494 $ 28,487 Cost of revenues (excluding depreciation) $ 15,818,000 $ 13,462,000 Cost to mine one bitcoin $ 47,359 $ 18,217 Total Bitcoin Equivalent Coins Generated (Total BTC Equivalent)* 334 771 Breakeven of Total BTC Equivalent $ 47,359 $ 17,460 * Amount represents Bitcoin plus MSA BTC Equivalent listed below in table 50 Bitcoin MSA BTC Total BTC Mined Equiv Equiv 23-Jan 80 2.8 83 23-Feb 64 2.8 67 23-Mar 68 3.2 71 23-Apr 60 3.8 64 23-May 69 5.5 74 23-Jun 58 3.8 62 23-Jul 61 3.8 65 23-Aug 61 2.8 64 23-Sep 54 2.2 56 23-Oct 47 0.4 47 23-Nov 57 0.6 58 23-Dec 60 0.0 60 24-Jan 52 0.0 52 24-Feb 45 0.0 45 24-Mar 45 0.0 45 24-Apr 40 0.0 40 24-May 22 0.0 22 24-Jun 22 0.0 22 24-Jul 21 0.0 21 24-Aug 21 0.0 21 24-Sept 19 0.0 19 24-Oct 20 0.0 20 24-Nov 17 0.0 17 24-Dec 10 0.0 10 The breakeven analysis is computed by taking the cost of revenues for the given period and dividing that sum by the number of Bitcoin Equivalent Coins Generated during the same period.
Added
From January 1, 2026 to March 25, 2026, we issued and sold an aggregate of 83,955,130 shares of our Class A common stock under the 2025 ATM for gross proceeds of approximately $110.8 million and incurred issuance costs of approximately $0.4 million. • Merger with Gryphon.
Removed
For instance, in (2024 the $15,818,000 cost of revenues is divided by the 334 Bitcoin Equivalent Coins Generated, resulting in an average of $47,359 per coin). The BTC Equivalent calculation labeled as “Total BTC Equiv” in the table, is determined by combining Gryphon’s bitcoin-mined during the period with the bitcoin equivalent amount of revenue earned from the Sphere MSA.
Added
On May 9, 2025, Gryphon, Merger Sub Inc., Merger Sub LLC, and Historical ABTC entered into the Merger Agreement. On September 3, 2025, in accordance with the terms of the Merger Agreement, among other things, the Mergers were completed and Gryphon was renamed to American Bitcoin Corp. after the Closing.
Removed
To calculate the latter, the revenue earned from the Sphere MSA during the period is divided by the average bitcoin price as quoted by the Principal Market for that same period (labeled as “MSA BTC Equiv” in the table). The breakeven analysis is an operational metric that does not take capital expenditures or financing mechanics into consideration.
Added
This transaction was accounted for under the acquisition method as a reverse acquisition with Historical ABTC identified as the accounting acquirer for financial statement reporting purposes.
Removed
The calculation only considers direct operational costs, such as electricity and hosting. The mining equipment was originally financed primarily through equity capital raises and cash flows resulting from the sale of bitcoin generating by mining operations. As of December 31, 2024, there were no financing agreements outstanding related to financing of mining equipment.
Added
Basis of Presentation References to "we," us," our," and similar terms herein refer to: (i) the “ASIC Compute” sub-segment of Hut 8’s “Compute” segment prior to the effectiveness of the Transactions on March 31, 2025; (ii) Historical ABTC following the effectiveness of the Transactions on April 1, 2025 until the consummation of the Mergers on September 3, 2025; and (iii) American Bitcoin Corp.
Removed
The breakeven analysis is a non-GAAP measure, similar to the way the gold industry reports gold-equivalent ounces to provide uniform measure of various revenue streams from different commodities (such as gold, copper, nickel, etc.).
Added
(formerly known as Gryphon Digital Mining, Inc.) following the consummation of the Mergers on September 3, 2025. 37 Table of Contents On March 31, 2025, Hut 8, ADC, and the stockholders of ADC entered into a Contribution and Stock Purchase Agreement, pursuant to which Hut 8 contributed to ADC substantially all of Hut 8’s wholly-owned ASIC miners, in exchange for newly issued Class B Common Stock of ADC, representing 80% of the total and combined voting power and 80% of the issued and outstanding equity interests of ADC after giving effect to the issuance.
Removed
Much like the gold industry, the purpose of this calculation is to offer the reader a bitcoin-equivalent datapoint for Gryphon’s two revenue streams within the context of its primary revenue stream. This enables readers to easily compare Gryphon’s operations with other bitcoin mining companies.
Added
In connection with the Transactions, ADC was renamed American Bitcoin Corp. and became a majority-owned subsidiary of Hut 8.
Removed
By dividing the total cost of revenues by the number of bitcoin-equivalent coins generated, one arrives at the breakeven point for total BTC equiv. Therefore, if Gryphon sells a bitcoin at the same price, it would have achieved a breakeven. The breakeven cost of mining bitcoin is influenced primarily by two factors.
Added
Until the effectiveness of the Transactions on March 31, 2025, we historically operated as the “ASIC Compute” sub-segment of Hut 8’s “Compute” segment and not as a standalone company; therefore, separate financial statements had not historically been prepared for us prior to April 1, 2025.
Removed
First, the cost of electricity sourced from Gryphon’s hosting providers, which encompasses a combination of pass-through market electricity prices and profit-sharing arrangements. Second, it is affected by the global hashrate of the Bitcoin network.
Added
Our Combined Financial Statements represent the historical assets, liabilities, operations, and cash flows directly attributable to us starting April 1, 2025; the prior periods have been prepared on a carveout basis through the use of a management approach from Hut 8’s Consolidated Financial Statements and accounting records and are presented on a standalone basis as if the operations had been conducted independently from Hut 8.
Removed
Over the twelve-month period through the fourth quarter of 2024, the cost of electricity plus the profit-sharing arrangement in place with the hosting provider has fluctuated due to seasonality from $0.0720 per kilowatt hour in the fourth quarter of 2023 to $0.0447 per kilowatt hour in the fourth quarter of 2024, reaching a high of $0.0905 per kilowatt hour during Q1 of 2024.
Added
Following the effectiveness of the Transactions on March 31, 2025, we began operating as a standalone entity with our own accounting and financial records; therefore, starting April 1, 2025, our results of operations are the results directly attributed to our standalone operations rather than the Bitcoin mining operations of Hut 8.
Removed
In addition, the global hashrate of the Bitcoin network has shown a consistent upward trend, with sequential increases of 21.6%, 19.0%, 6.8% and 4.3% over the last four quarters ending December 31, 2024. This increase in the global hashrate has led to fewer bitcoins being mined for the same amount of energy consumption.
Added
Our Combined Balance Sheets as of December 31, 2025 reflects the assets and liabilities that we directly own or are legally obligated to satisfy post-Transactions.
Removed
The combined effect of these changes in the two key cost drivers has resulted in an increase in the overall breakeven level as of December 31, 2024 compared to December 31, 2023. Recent Developments Blockfusion Agreement On December 1, 2024, Gryphon entered into a Co-Location Mining Services Agreement (the “Blockfusion Agreement”), with Blockfusion USA, Inc.
Added
Prior to the effectiveness of the Transactions on March 31, 2025, all revenues and costs, as well as assets and liabilities directly associated with Hut 8’s Bitcoin mining sub-segment activities were included in our Combined Financial Statements, including Hut 8’s strategic Bitcoin reserve (which remained with Hut 8 following the effectiveness of the Transactions).
Removed
(“Blockfusion”) for hosting 3,780 of its bitcoin miners at Blockfusion’s facility in Niagara Falls, New York. Pursuant to the Blockfusion Agreement, the Company is entitled to 12 MW of power at a cost of $156,000 per month, as well as certain other fees set forth in the agreement. At signing, the Company paid an initial $156,000 facility fee.
Added
Additional costs allocated to us include corporate general and administrative expenses, which consisted of various categories, including but not limited to: employee compensation and benefits, professional services, facilities and corporate office expenses, information technology, interest expenses, and stock-based compensation.
Removed
In addition, the Company will be required to (i) by January 31, 2025, maintain a cash deposit or (ii) by January 27, 2025, an irrevocable standby letter of credit with Blockfusion’s energy provider, in each case in the amount of $1,200,000. As of the filing date, the Company has not completed this payment and the amount is currently outstanding.
Added
The corporate and general administrative expenses allocated were primarily based on a percentage of revenue basis that was considered to be a reasonable reflection of the utilization of the services provided or benefit received during the periods presented, depending on the nature of the service received.
Removed
The Blockfusion Agreement has a term of twelve months and automatically renews for subsequent one-month terms, until terminated on thirty days’ notice.
Added
Management believes the assumptions underlying our Combined Financial Statements, including the expense methodology and resulting allocation, are reasonable for all periods presented.
Removed
Subsequent to December 31, 2024, the Company has delivered 3,996 bitcoin miners to Blockfusion. 51 Mawson Agreement On January 3, 2025, Gryphon entered into a Master Co-Location Agreement (the “Mawson Agreement”) with Mawson Hosting LLC (“Mawson”) with a right to host up to 5,880 miners in Mawson’s facility in Midland, Pennsylvania.
Added
However, the allocations may not include all of the actual expenses that would have been incurred by us had we operated as a standalone entity during such periods and may not reflect our results of operations, financial position, and cash flows had we been a standalone company during the periods presented.
Removed
Pursuant to the Mawson Agreement, the Company is entitled to 20 MW of power at a cost of approximately $23.50 per MW/hour paid monthly with a minimum fee of approximately $165,521 per month, as well as certain other fees set forth in the agreement.
Added
Actual costs that might have been incurred had we been a standalone company would depend on a number of factors, including our organizational structure, what corporate functions we might have performed directly or outsourced, and strategic decisions we might have made in areas such as executive management, legal, and other professional services, and certain corporate overhead functions.
Removed
The Mawson Agreement has an initial term of one year and may be terminated on sixty days’ notice. Subsequent to December 31, 2024, the Company has delivered 6,719 bitcoin miners to Mawson.
Added
These costs also may not be indicative of the expenses that we may incur in the future or would have incurred if we had obtained these services from a third party. All intracompany transactions within our operations prior to the effectiveness of the Transactions on March 31, 2025 have been eliminated.
Removed
Anchorage Loan Agreement On May 25, 2022, Anchorage entered into the Anchorage Loan Agreement with Gryphon Opco, an indirect wholly owned subsidiary of the Company, pursuant to which Anchorage loaned Gryphon Opco the principal amount of 933.333333 bitcoin.
Added
All intercompany transactions between us and Hut 8 on or before March 31, 2025 are considered to be effectively settled in our Combined Financial Statements at the time the transactions are recorded.
Removed
Gryphon Opco’s obligations under the Anchorage Loan Agreement were secured by certain equipment and software rights of Gryphon Opco and were guaranteed by Gryphon. On October 25, 2024, Gryphon, its direct and indirect subsidiaries, as applicable, and Anchorage entered into the New Anchorage Agreements to restructure the Anchorage Loan and terminate the existing the Anchorage Loan Agreement.
Added
The total net effect of these intercompany transactions considered to be settled are reflected in our Combined Statement of Cash Flows within financing activities and in our Combined Balance Sheets as net Hut 8 investment. At March 31, 2025, as described in the description of the Transactions above, the total net Hut 8 investment has been settled.
Removed
Pursuant to the New Anchorage Agreements, (i) approximately $9.1 million of the Anchorage Loan was converted into shares of Common Stock, at an ascribed value of $1.10 per share, resulting in the issuance of 8,287,984 shares of Common Stock to Anchorage in a private placement pursuant to Section 4(a)(2) of the Securities Act, (ii) approximately $3.9 million of the Anchorage Loan was converted into warrants to purchase 3,530,198 shares of Common Stock, which warrants are exercisable immediately, have an unlimited term and an exercise price of $0.01 per shar e(the “Pre-Funded Warrants”), in a private placement pursuant to Section 4(a)(2) of the Securities Act and (iii) the remaining $5 million of the Anchorage Loan was exchanged for a new $5 million loan (the “Restructured Loan”) pursuant to the New Loan Agreement.
Added
Prior to the effectiveness of the Transactions on March 31, 2025, our equity balance in our Combined Financial Statements represents the excess of total liabilities over assets. Net Hut 8 investment is primarily impacted by contributions from Hut 8 that are the result of net funding provided by or distributed to Hut 8.
Removed
Pursuant to the New Loan Agreement: ● the outstanding principal and interest are denominated in dollars; ● the interest rate is 4.25% payable monthly; ● Anchorage has been given a first priority lien on all of Gryphon and its subsidiaries’ assets; ● covenants related to mining machine locations and covenant ratios in the Anchorage Loan Agreement have been removed; and ● Anchorage may convert half of the outstanding principal at a price of $1.10 per share of Common Stock and the remaining half at a price of $1.50 per share of Common Stock. 52 The New Loan Agreement contains customary representations, warranties and agreements by Gryphon, customary conditions to closing, indemnification obligations of the Company and the purchasers, including for liabilities arising under the Securities Act, other obligations of the parties and termination provisions.
Added
Prior to the effectiveness of the Transactions on March 31, 2025, cash was managed through bank accounts controlled and maintained by Hut 8. We did not have legal ownership of any bank accounts containing cash balances prior to March 31, 2025.
Removed
The representations, warranties and covenants contained in the Loan Agreement were made only for the purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties. Pursuant to the New Anchorage Agreements, Gryphon also issued Anchorage the Warrants.
Added
As such, cash held in commingled accounts with Hut 8 is presented within net Hut 8 investment on our Combined Balance Sheets. Subsequent to March 31, 2025, we have set up our own legally separate bank accounts to appropriately directly settle our liabilities and to manage our own cash.
Removed
The Restructured Loan and the Warrants cannot be converted or exercised, respectively, if Anchorage (together with its affiliates) would beneficially own in excess of 19.99% of the number of shares of Common Stock outstanding as of the date of the New Anchorage Agreements after giving effect to such conversion or exercise without the approval of Gryphon’s stockholders.
Added
Prior to the effectiveness of the Transactions on March 31, 2025, we were not a co-obligor on Hut 8’s third-party, long-term debt obligations nor were we expected to pay any portion of Hut 8's third-party, long-term debt.
Removed
Gryphon has agreed to seek such approval at its next annual meeting of stockholders.
Added
However, proceeds from Hut 8’s third-party debts were used to finance our purchase of Bitcoin miners or directly used for our Bitcoin mining-related activities and were therefore included in our Combined Financial Statements. While we are not a legal obligor, certain Bitcoin mining assets of ours were pledged as collateral as disclosed in Note 5. Digital Assets .
Removed
Results of Operations Year ended December 31, 2024 compared to the year ended December 31, 2023 The following table shows the Company’s results of operations for the year ended December 31: Change 2024 2023 Dollar Percentage Revenues Mining revenues $ 20,539,000 $ 21,052,000 $ (513,000 ) (2.4 )% Management services - 873,000 (873,000 ) (100.0 ) Total revenues 20,539,000 21,925,000 (1,386,000 ) (6.3 ) Operating cost Cost of revenues (excluding depreciation) 15,818,000 13,462,000 2,356,000 17.5 General and administrative expenses 11,267,000 4,760,000 6,507,000 136.7 Stock-based compensation expense (benefit) 1,588,000 (152,000 ) 1,740,000 1,144.7 Depreciation expense 11,179,000 14,958,000 (3,779,000 ) (25.3 ) Impairment of digital assets - 275,000 (275,000 ) (100.0 ) Impairment of miners - 8,335,000 (8,335,000 ) (100.0 ) Unrealized gain on digital assets (1,566,000 ) - (1,566,000 ) (100.0 ) Realized gain on sale of digital assets - (535,000 ) (535,000 ) (100.0 ) Total operating expenses 38,286,000 41,103,000 (2,817,000 ) (6.8 ) Loss from operations (17,747,000 ) (19,178,000 ) (1,431,000 ) (7.5 ) Other expenses (3,553,000 ) (9,597,000 ) (6,044,000 ) (63.0 ) Loss before provision for income taxes $ (21,300,000 ) $ (28,775,000 ) $ (7,475,000 ) (26.0 )% Mining revenues Mining revenues decreased to $20,539,000 for the year ended December 31, 2024 from $21,052,000 for the year ended December 31, 2023.
Added
Following the effectiveness of the Transactions on March 31, 2025, we are no longer connected to any of Hut 8's third-party debt obligations. 38 Table of Contents The Combined Financial Statements included in this Annual Report have been prepared in accordance with generally accepted accounting principles, in the United States ("GAAP").
Removed
The decrease in mining revenues of $513,000 is due to a combination of factors. The average value of bitcoin mined for the year ended December 31, 2024 was $66,000 compared to $29,000 for the year ended December 31, 2023, an increase of $37,000, or 128%.
Added
Bitcoin Mining We generate revenue from Bitcoin rewards by providing computation services to third-party mining pool operators, which combine the computing power of Bitcoin miners to increase the chance of solving a block and getting paid by the network.
Removed
As of December 31, 2024, the Company had approximately 8,800 miners compared to approximately 8,300 as of December 31, 2023. However, these increases in operational miners and revenue recognized per bitcoin earned were offset by the increase in global hashrate as well as the 50% reduction in block rewards due to the halving event in April 2024. .
Added
We provide the service of performing computations of our Bitcoin miners to these mining pool operators and receive in return a payout of Bitcoin based on a contractual formula which primarily calculates the computing power provided to the mining pool as a percentage of the total computing power of the network, regardless of whether the mining pool actually receives the Bitcoin award from the network.
Removed
During the years ended December 31, 2024 and 2023, the average daily global hashrate was 633.4 exahash and 381.4 exahash, respectively, an increase of 66%. 53 Management services Management services revenue decreased to $0 for the year ended December 31, 2024, from $873,000 for the year ended December 31, 2023.

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