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What changed in Greenidge Generation Holdings Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Greenidge Generation Holdings Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+584 added−442 removedSource: 10-K (2024-04-10) vs 10-K (2023-03-31)

Top changes in Greenidge Generation Holdings Inc.'s 2023 10-K

584 paragraphs added · 442 removed · 323 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

79 edited+39 added−9 removed107 unchanged
Biggest changeSubsequent to the Merger, our shares of class A common stock were listed on the Nasdaq Global Select Market and currently trade under the symbol "GREE." On December 13, 2022, we received a letter from the listing qualifications department of the Nasdaq Stock Market ("Nasdaq") notifying us that for the prior 30 consecutive business days the bid price of our common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq listing rules.
Biggest changeOn December 13, 2022, we received a letter from the listing qualifications department of Nasdaq notifying us that for the prior 30 consecutive business days the bid price of our common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq listing rules, and we regained compliance with Nasdaq’s continued listing standards by effecting a one-for-ten reverse stock split on our Class A common stock and Class B common stock on May 16, 2023.
Although the number of miners deployed provides a sense of scale of cryptocurrency datacenter operations as compared to our peers, management believes that hash rate, or the number of hashes a miner can perform in each second, typically expressed in EH/s or terahash per second ("TH/s") and used as a measure of computational power or mining capacity used to mine and process transactions on a blockchain such as bitcoin, provides a more comparable measure of a cryptocurrency datacenter fleet’s ability to process cryptocurrency transactions as compared to other bitcoin mining operations.
Although the number of miners deployed provides a sense of scale of cryptocurrency datacenter operations as compared to our peers, 12 management believes that hash rate, or the number of hashes a miner can perform in each second, typically expressed in EH/s or terahash per second ("TH/s") and used as a measure of computational power or mining capacity used to mine and process transactions on a blockchain such as bitcoin, provides a more comparable measure of a cryptocurrency datacenter fleet’s ability to process cryptocurrency transactions as compared to other bitcoin mining operations.
The public may obtain a copy of our filings, free of charge, through our corporate internet website as soon as reasonably practicable after we have electronically filed such material with, or furnished it to, the SEC. Additionally, these materials, including this Annual Report and the accompanying exhibits are available from the SEC’s website http://www.sec.gov.
The public may obtain a copy of our filings, free of charge, through our corporate internet website as soon as reasonably practicable after we have 20 electronically filed such material with, or furnished it to, the SEC. Additionally, these materials, including this Annual Report and the accompanying exhibits are available from the SEC’s website http://www.sec.gov.
Because Greenidge Pipeline operates exclusively as a provider of delivery services for gas supplies owned by others, it is not a "gas utility company" under the Public Utility Holding Company Act of 2005 which expands the authority of FERC to 16 oversee transactions and other financial activities of public utility holding companies through grants of access to those companies’ books and records.
Because Greenidge Pipeline operates exclusively as a provider of delivery services for gas supplies owned by others, it is not a "gas utility company" under the Public Utility Holding Company Act of 2005 which expands the authority of FERC to oversee transactions and other financial activities of public utility holding companies through grants of access to those companies’ books and records.
We are authorized to participate in all of these markets, where our bids are evaluated along with bids from numerous other generating facilities in or near New York State. In each of these markets, the NYISO sets the market price, which is paid to all bidders, based on the highest priced bid accepted to meet demand.
We are authorized to participate in all of these markets, where our bids are evaluated along with bids from numerous other generating facilities in or near New York State. In each of these 13 markets, the NYISO sets the market price, which is paid to all bidders, based on the highest priced bid accepted to meet demand.
We continue to remit credits in accordance with RGGI under the current three-year control period (i.e., the Fifth Control Period being January 1, 2021 to December 31, 2023). We recognize expense on a per ton basis, where one ton is equal to one RGGI credit. RGGI credits 13 are recorded on a first in, first out basis.
We continue to remit credits in accordance with RGGI under the current three-year control period (i.e., the Fifth Control Period being January 1, 2021 to December 31, 2023). We recognize expense on a per ton basis, where one ton is equal to one RGGI credit. RGGI credits are recorded on a first in, first out basis.
Environmental, Social, Governance We are committed to making progress on the issues that matter in the environmental, social, and governance areas, and more specifically to serving as a community partner in the locations in which we operate. This is a critical part of our plan for growth and value creation as we develop our business.
Environmental, Social, Governance We are committed to making progress on the issues that matter in the ESG areas, and more specifically to serving as a community partner in the locations in which we operate. This is a critical part of our plan for growth and value creation as we develop our business.
The bitcoin network has grown to the point where it is generally no longer economical to mine bitcoin without ASIC computers with strong computing abilities and energy efficiency. Operating a fleet of ASIC bitcoin miners on a commercial scale currently requires a significant amount of electricity.
The bitcoin network has grown to the point where it is generally no longer economical to mine bitcoin without ASIC computers with strong computing abilities and energy efficiency. 11 Operating a fleet of ASIC bitcoin miners on a commercial scale currently requires a significant amount of electricity.
It is exempt from regulation by the FERC, under the National Gas Act ("NGA") pursuant to Section 1(c) of the NGA , due to the fact 14 that all of the gas transmitted through the pipeline is delivered within the State of New York and the rates for delivery are regulated by the PSC.
It is exempt from regulation by the FERC, under the National Gas Act ("NGA") pursuant to Section 1(c) of the NGA , due to the fact that all of the gas transmitted through the pipeline is delivered within the State of New York and the rates for delivery are regulated by the PSC.
This permit establishes effluent limitations and sampling frequency for both stormwater and leachate discharges from the Landfill and specifies a monitoring and reporting structure to the NYSDEC. This permit is valid until June 2027. Waste The Landfill is also subject to a Part 360 Solid Waste Management Facility permit issued by NYSDEC.
This permit establishes effluent limitations and sampling frequency for both stormwater and 19 leachate discharges from the Landfill and specifies a monitoring and reporting structure to the NYSDEC. This permit is valid until June 2027. Waste The Landfill is also subject to a Part 360 Solid Waste Management Facility permit issued by NYSDEC.
As a result of our strategic geographic location, we have access to a regular 10 supply of relatively lower-cost natural gas to power our electricity generation. We entered into a contract for firm gas transportation on the Empire Pipeline, ensuring we have uninterrupted access to fuel.
As a result of our strategic geographic location, we have access to a regular supply of relatively lower-cost natural gas to power our electricity generation. We entered into a contract for firm gas transportation on the Empire Pipeline, ensuring we have uninterrupted access to fuel.
The bitcoin network is decentralized, meaning that no single entity owns or operates the bitcoin network, and that no governmental authority, financial institution, or financial intermediary is required to create, transmit or determine the value of bitcoin. Instead, the infrastructure of the bitcoin network is owned and maintained by a decentralized user base.
The bitcoin network is decentralized, meaning that no single entity owns or operates the bitcoin 10 network, and that no governmental authority, financial institution, or financial intermediary is required to create, transmit or determine the value of bitcoin. Instead, the infrastructure of the bitcoin network is owned and maintained by a decentralized user base.
The PSC has established a rebuttable presumption that a third party that is not itself an electric or gas corporation may purchase up to 10% of the ownership interests in an electric corporation without: (1) requiring PSC approval; or (2) 15 becoming an electric corporation itself.
The PSC has established a rebuttable presumption that a third party that is not itself an electric or gas corporation may purchase up to 10% of the ownership interests in an electric corporation without: (1) requiring PSC approval; or (2) becoming an electric corporation itself.
Issuances of any such instruments by Greenidge Generation do not require the PSC’s prior approval, as long as the power generating assets held by Greenidge Generation are not pledged as security under those instruments. Currently these power generating assets are not pledged as a security under any of our outstanding debt agreements.
Issuances of any such instruments by Greenidge Generation do not require the PSC’s prior approval, as long as the power generating assets held by Greenidge Generation are not pledged as security under those instruments. Currently these power generating assets are not pledged as security under any of our outstanding debt agreements.
Requires FERC approval before a holding company in a system which includes an electric transmission or generation company may acquire any security with a value in excess of $10 million of an electric transmission or generation company or a holding company with a value in excess of $10 million. 6.
Requires FERC approval before a holding company in a system which includes an electric transmission or generation company may acquire any security with a value in excess of $10 million of an electric transmission or generation company or a holding company with a value in excess of $10 million. 17 6.
See "Risk Factors—Risks Related to Our Business—Risks Related to our Power Generation Operations" for further details. The New York State Independent System Operator So long as Greenidge Generation remains the owner of the New York facility, we expect that no approvals from the NYISO should be required for any restructuring of the ownership of us or Greenidge Generation.
See "Risk Factors—Risks Related to Our Business—Risks Related to our Datacenter and Power Generation Operations" for further details. The New York State Independent System Operator So long as Greenidge Generation remains the owner of the New York facility, we expect that no approvals from the NYISO should be required for any restructuring of the ownership of us or Greenidge Generation.
Under the Hosting Agreements, NYDIG affiliates are required to provide Greenidge an upfront security deposit, pay a configuration fee for the setup of new or relocated miners, and pay for repairs and parts consumed in non-routine maintenance (i.e., units that are out of service for more than 12 hours).
Under the NYDIG Hosting Agreement, NYDIG affiliates are required to provide Greenidge an upfront security deposit, pay a configuration fee for the setup of new or relocated miners, and pay for repairs and parts consumed in non-routine maintenance (i.e., units that are out of service for more than 12 hours).
Each block takes approximately 10 minutes to be solved and as a result, rewards are halved approximately every four years. Currently, the fixed reward for solving a new block is 6.25 bitcoin per block and this number is expected to decrease by half to become 3.125 bitcoin sometime in 2024.
Each block takes approximately 10 minutes to be solved and as a result, rewards are halved approximately every four years. Currently, the fixed reward for solving a new block is 6.25 bitcoin per block and this number is expected to decrease by half to become 3.125 bitcoin in April 2024.
At the effective time of the Merger, we issued 2,960,731 shares of class A common stock in exchange for all shares of common stock, par value $0.0001, of Support.com and all outstanding stock option and restricted stock units of Support.com. Support.com’s results of operations and balance sheet have been consolidated effective with the Merger.
At the effective time of the Merger, we issued 2,960,731 shares of Class A common stock in exchange for all shares of common stock, par value $0.0001, of Support.com and all outstanding stock options and restricted stock units of Support.com. Support.com’s results of operations and balance sheet have been consolidated effective with the Merger.
The terms of such arrangements requires NYDIG affiliates to pay a reimbursement fee that covers the cost of power and direct costs associated with management of the mining facilities, a hosting fee as well as a gross profit-sharing arrangement.
The terms of such arrangements require NYDIG affiliates to pay a reimbursement fee that covers the cost of power and direct costs associated with management of the mining facilities, a hosting fee as well as a gross profit-sharing arrangement.
Our goal is to maintain our website as a portal through which investors can easily find or navigate to pertinent information about us, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and any other reports, after we file them with the Securities and Exchange Commission (the "SEC").
Our goal is to maintain our website as a portal through which investors can easily find or navigate to pertinent information about us, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and any other reports, after we file them with the SEC.
Pursuant to this restructuring, Greenidge was incorporated in the State of Delaware on January 27, 2021 and on January 29, 2021, we entered into an asset contribution and exchange 8 agreement with the owners of GGH, pursuant to which we acquired all of the ownership interests in GGH in exchange for 7,000,000 shares of our common stock.
Pursuant to this restructuring, Greenidge was incorporated in the State of Delaware on January 27, 2021 and on January 29, 2021, we entered into an asset contribution and exchange agreement with the owners of GGH, pursuant to which we acquired all of the ownership interests in GGH in exchange for 700,000 shares of our common stock.
We incurred emissions expenses of $4.5 million and $2.6 million for the years ended December 31, 2022 and 2021, respectively, which was allocated between cost of revenue - cryptocurrency datacenter and cost of revenue - power and capacity, based on the relative percentage of MWH consumed for each, in the accompanying consolidated statements of operations.
We incurred emissions expenses of $6.5 million and $4.5 million for the years ended December 31, 2023 and 2022, respectively, which was allocated between cost of revenue - cryptocurrency datacenter and cost of revenue - power and capacity, based on the relative percentage of MWh consumed for each, in the accompanying consolidated statements of operations.
Additionally, when market conditions dictate shutting down mining and making market sales of energy, Greenidge shall pay NYDIG the expected value that it would have received as if the cryptocurrency datacenter had operated and a portion of gross margin from energy sales above normal mining requirements.
Additionally, when market conditions dictate shutting down mining and making market sales of energy, Greenidge is required to pay NYDIG the expected value that it would have received as if the cryptocurrency datacenter had operated and a portion of gross margin from energy sales above normal mining requirements.
The terms of our hosting arrangements require NYDIG to pay a hosting fee that covers the cost of power and a hosting fee associated with direct costs of mining facilities management, as well as a gross profit-sharing arrangement.
The terms of the NYDIG Hosting Agreement require NYDIG to pay a hosting fee that covers the cost of power and a hosting fee associated with direct costs of mining facilities management, as well as a gross profit-sharing arrangement.
("Support.com"), with Support.com continuing as the surviving corporation (the "Merger") and a wholly owned subsidiary of Greenidge, pursuant to the Agreement and Plan of Merger, dated March 19, 2021 (the "Merger Agreement"), among Greenidge, Support.com and Merger Sub.
("Merger Sub"), a wholly owned subsidiary of Greenidge, merged with and into Support.com, Inc. ("Support.com"), with Support.com continuing as the surviving corporation (the "Merger") and a wholly owned subsidiary of Greenidge, pursuant to the Agreement and Plan of Merger, dated March 19, 2021 (the "Merger Agreement"), among Greenidge, Support.com and Merger Sub.
Workplace Health and Safety The safety and health of our employees is a top priority for us. We are committed to maintaining an effective safety culture and to stressing the importance of our employees’ role in identifying, mitigating and communicating safety risks.
We believe our relationship with our employees is satisfactory. Workplace Health and Safety The safety and health of our employees is a top priority for us. We are committed to maintaining an effective safety culture and to stressing the importance of our employees’ role in identifying, mitigating, and communicating safety risks.
With regards to our coal ash pond, in accordance with federal law and Accounting Standards Codification ("ASC") 410-20, Environmental Liabilities, we have an environmental liability of $17.5 million as of December 31, 2022.
With regards to our coal ash pond, in accordance with federal law and Accounting Standards Codification ("ASC") 410-20, Environmental Liabilities, we have an environmental liability of $17.3 million as of December 31, 2023.
During the year ended December 31, 2022, we recognized a charge of $16.7 million for the remeasurement of environmental liabilities as a result of an update in the cost estimates associated to CCR liabilities related to the Lockwood landfill and the CCR impoundment as part of our continuing evaluation of the site. Available Information Our website is located at www.greenidge.com.
During the year ended December 31, 2023, we recognized a charge of $2.4 million for the remeasurement of environmental liabilities as a result of an update in the cost estimates associated to CCR liabilities related to the Lockwood landfill and the CCR impoundment as part of our continuing evaluation of the site. Available Information Our website is located at www.greenidge.com.
As a result of this development, management and the Board of Directors decided to strictly focus on its cryptocurrency datacenter and power generation operations and made the determination to consider various strategic alternatives for the Support.com segment, including but not limited to the potential disposition of assets.
As a result of this development, management and the Board of Directors decided to strictly focus on our cryptocurrency datacenter and power generation operations and made the determination to consider various strategic alternatives for the Support.com segment, including the potential disposition of assets.
Concurrently, we entered into bitcoin mining hosting agreements with NYDIG's affiliates to host, power and provide technical support services, and other related services, to NYDIG's mining equipment at data centers operated by us for a period of five years, unless earlier terminated in accordance with the terms of the Hosting Agreements.
Concurrently, we entered into the NYDIG Hosting Agreement to host, power and provide technical support services, and other related services, to NYDIG's mining equipment at data centers operated by us for a period of five years, unless earlier terminated in accordance with the terms of such agreement.
From time to time we have purchased voluntary carbon offsets from a portfolio of U.S. greenhouse gas reduction projects as one method to reduce our carbon footprint. During the year ended December 31, 2022, we purchased $1.0 million of voluntary carbon offset credits. Seasonality Our business is not generally subject to seasonality.
From time to time we have purchased voluntary carbon offsets from a portfolio of U.S. greenhouse gas reduction projects as one method to reduce our carbon footprint. No voluntary carbon offset credits were purchased during the year ended December 31, 2023. Seasonality Our business is not generally subject to seasonality.
Greenidge shall pay NYDIG a portion of capacity revenue, as well as a portion of the gross margin from any energy sales in excess of mining requirement.
Greenidge is required to pay NYDIG a portion of capacity revenue, as well as a portion of the gross margin from any energy sales in excess of mining requirement.
We compete against all other NYISO generation resources, which as of Summer 2022 included approximately 41,000 MW of installed capacity consisting of gas and oil-fired thermal generation, as well as nuclear, hydro, wind, and other renewable generation.
We compete against all other NYISO generation resources, which as of Summer 2023 included approximately 40,262 MW of installed capacity consisting of gas and oil-fired thermal generation, as well as nuclear, hydro, wind, and other renewable generation.
As of December 31, 2022, the letter of credit amount was approximately $5.0 million, which guaranteed 18 the payment of a portion of the landfill liability. During 2023, Greenidge expects to contribute $1.3 million into a trust established with NYSDEC as the beneficiary to cover the remainder of the landfill surety requirement. CCRs are subject to federal and state regulations.
As of December 31, 2023, the letter of credit amount was approximately $5 million, which guaranteed the payment of a portion of the landfill liability. In 2024, Greenidge plans to contribute $1.1 million into a trust established with NYSDEC as the beneficiary to cover the remainder of the landfill surety requirement. CCRs are subject to federal and state regulations.
In accordance with the requirements of the CCR Rule, Lockwood has drafted required plans and documents and hosts a publicly available website that makes certain documents available to the public. Greenidge Generation is also subject to the CCR Rule, which requires that the onsite CCR surface impoundment associated with previous coal-fired operation of the facility, be closed.
Greenidge Generation is also subject to the CCR Rule, which requires that the onsite CCR surface impoundment associated with previous coal-fired operation of the facility, be closed. Greenidge Generation has also drafted the CCR Rule documents associated with closure, and has a publicly available website that makes certain documents available to the public as required by the rule.
We launched a commercial data center for bitcoin mining and blockchain services in January 2020, and as of December 31, 2022, we had approximately 24,200 miners deployed on our two sites capable of producing an aggregate hash rate capacity of approximately 2.4 EH/s.
We launched a commercial data center for bitcoin mining and blockchain services in January 2020, and as of December 31, 2023, we had approximately 28,800 miners deployed [on our two sites] capable of producing an aggregate hash rate capacity of approximately 3.0 EH/s.
Performance Metrics—Network Hash Rate and Difficulty In bitcoin mining, the processing speed of a bitcoin miner is measured by its "hash rate" or "hashes per second." "Hash rate" is the speed at which a miner can take any set of information and process it via the algorithm used on the bitcoin network, also known as a "hash." Therefore, a miner’s hash rate refers to how many algorithmic computations the miner can perform per second on the bitcoin network. 9 An individual mining company like ours has a hash rate measured across the total number of the miners it deploys in its datacenter operations.
Performance Metrics—Network Hash Rate and Difficulty In bitcoin mining, the processing speed of a bitcoin miner is measured by its "hash rate" or "hashes per second." "Hash rate" is the speed at which a miner can take any set of information and process it via the algorithm used on the bitcoin network, also known as a "hash." Therefore, a miner’s hash rate refers to how many algorithmic computations the miner can perform per second on the bitcoin network.
RGGI allowances are offered in quarterly auctions and are available from third parties. In 2019, New York State passed the Climate Leadership and Community Protection Act ("CLCPA"), which requires the NYSDEC and PSC to promulgate regulations and programs for the state to meet greenhouse gas emission reduction requirements and targets. NYSDEC and PSC have not fully implemented the CLCPA.
In 2019, New York State passed the Climate Leadership and Community Protection Act ("CLCPA"), which requires the NYSDEC and PSC to promulgate regulations and programs for the state to meet greenhouse gas emission reduction requirements and targets. NYSDEC and PSC have not fully implemented the CLCPA.
We believe that our business benefits from the following additional competitive advantages: • Vertical integration . We believe there are relatively few other public companies in the United States with cryptocurrency datacenter operations of scale in the United States currently using power generated from their own power plants. • Hosting arrangements .
We believe there are relatively few other public companies in the United States with cryptocurrency datacenter operations of scale in the United States currently using power generated from their own power plants. • Hosting arrangements .
We have classified the Support.com business as held for sale and discontinued operations in these consolidated financial statements as a result of a strategic shift at the parent level to strictly focus on our cryptocurrency datacenter and power generation operations, including pursuant to the Hosting Agreements.
We have classified the 8 Support.com business as held for sale and discontinued operations in our consolidated financial statements as a result of this decision to strictly focus on our cryptocurrency datacenter and power generation operations, including pursuant to our hosting agreements. See Note 3, " Discontinued Operations ", in the Notes to Consolidated Financial Statements.
As of December 31, 2022, our owned ASICs at the New York Facility had the capacity to consume approximately 56 MW of electricity. We have approval from NYISO to utilize 64 MW of electricity behind-the-meter. Support Services. On September 14, 2021, GGH Merger Sub, Inc. ("Merger Sub"), a wholly owned subsidiary of Greenidge, merged with and into Support.com, Inc.
As of December 31, 2023, our owned and customer hosted miners at the New York Facility had the capacity to consume approximately 60 MW of electricity. We have approval from NYISO to utilize 64 MW of electricity behind-the-meter. Support Services. On September 14, 2021, GGH Merger Sub, Inc.
Regulations Applicable to Power Generation Business We operate our electricity generating business subject to the following regulatory regimes: The New York State Public Service Commission Greenidge, GGH LLC and Greenidge Generation are each defined as "electric corporations" subject to regulation by the PSC under New York’s Public Service Law.
For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see " Risk Factors — Risks Related to Our Business" herein. 16 Regulations Applicable to Power Generation Business We operate our electricity generating business subject to the following regulatory regimes: The New York State Public Service Commission Greenidge, GGH LLC and Greenidge Generation are each defined as "electric corporations" subject to regulation by the PSC under New York’s Public Service Law.
The Support Services segment operated primarily in the United States, but maintained international operations that included staff providing support services. Support.com’s largest customer elected to not renew their contract with Support.com upon its expiration on December 31, 2022.
The Support Services segment also earned revenues for end-user software products provided through direct customer downloads and sale via partners. The Support Services segment operated primarily in the United States, but maintained international operations that included staff providing support services. Support.com’s largest customer elected to not renew their contract with Support.com upon its expiration on December 31, 2022.
On January 30, 2023, Greenidge entered into the Hosting Agreements, which resulted in a material change to our business strategy with us largely operating miners owned by NYDIG affiliates.
On January 30, 2023, we entered into hosting services agreements and related orders with affiliates of NYDIG (collectively as in effect from time to time, the "NYDIG Hosting Agreement"), which resulted in a material change to our business strategy with us largely operating miners owned by NYDIG affiliates.
On December 31, 2022, we classified the Support.com business as held for sale and discontinued operations. On January 30, 2023, we entered into a debt restructuring agreement with our primary lender NYDIG, which included the transfer of approximately 2.8 EH/S of bitcoin mining equipment to NYDIG.
On January 30, 2023, we entered into a debt restructuring agreement with our primary lender NYDIG, which included the transfer of approximately 2.8 EH/S of bitcoin mining equipment to NYDIG.
The aforementioned debt restructuring did not alter our ownership of this facility and we plan to continue to operate such facility. We sell electricity to the NYISO at all times when the plant is running and we increase or decrease the amount of electricity sold based on prevailing prices in the wholesale electricity market and demand for electricity.
We sell electricity to the NYISO at all times when the plant is running and we increase or decrease the amount of electricity sold based on prevailing prices in the wholesale electricity market and demand for electricity.
This allows us to participate in the upside as bitcoin prices rise, but reduces our downside risk of bitcoin price deterioration and cost increases related to natural gas. The arrangement covers all of our current mining capacity at the New York and South Carolina facilities.
This allows us to participate in the 7 upside as bitcoin prices rise, but reduces our downside risk of bitcoin price deterioration and cost increases related to natural gas.
As of the year ended December 31, 2022 and through the signing of Hosting Agreements (as defined below) on January 30, 2023, our cryptocurrency datacenter operations generated revenue in the form of bitcoin by earning bitcoin as rewards and transaction fees for supporting the global bitcoin network with application-specific integrated circuit computers ("ASICs" or "miners") owned or leased by us.
Cryptocurrency Datacenters . As of the year ended December 31, 2023, our cryptocurrency datacenter operations generated revenue in the form of bitcoin by earning bitcoin as rewards and transaction fees for supporting the global bitcoin network with application-specific integrated circuit computers ("ASICs" or "miners") owned or leased by us. We converted substantially all of our earned bitcoin into U.S. dollars.
As the regulatory and legal environment evolves, we may become subject to new laws, further regulation by the SEC and other federal or state agencies, which may affect our cryptocurrency datacenter and other related activities. For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see " Risk Factors" herein.
As the regulatory and legal environment evolves, we may become subject to new laws, further regulation by the SEC and other federal or state agencies, which may affect our cryptocurrency datacenter and other related activities.
Under these agreements, we agreed to host, power and provide technical support services, and other related services, to NYDIG affiliates’ mining equipment at certain Greenidge facilities for a term of five years.
Under the NYDIG Hosting Agreement, we agreed to host, power, and provide technical support services, and other related services, to NYDIG affiliates’ mining equipment at the New York Facility and the South Carolina Facility for a term of five years.
If the block formation time for the preceding 2,016 blocks exceeds the 10-minute average goal, the network automatically reduces the degree of difficulty and vice versa.
At each interval of 2,016 blocks (which takes roughly two weeks), the network re-analyzes the interval and revises the difficulty index, if needed. If the block formation time for the preceding 2,016 blocks exceeds the 10-minute average goal, the network automatically reduces the degree of difficulty and vice versa.
See " Risk Factors—Risks Related to the Ownership of Our Securities—Our class A common stock is subject to delisting proceedings from the Nasdaq Global Select Market ." Throughout 2021, we increased our datacenter capacity from 0.4 EH/s to approximately 1.4 EH/s, and in 2022, we increased our active mining capacity to 2.4 EH/s, with a total fleet capacity with a nameplate of 3.9 EH/s as of December 31, 2022.
Subsequent to the Merger, our shares of Class A common stock were listed on the Nasdaq Global Select Market and currently trade under the symbol "GREE." Throughout 2021, we increased our datacenter capacity from 0.4 EH/s to approximately 1.4 EH/s, and in 2022, we increased our active mining capacity to 2.4 EH/s, with a total fleet capacity with a nameplate of 3.9 EH/s as of December 31, 2022.
However, coin generation from our mining operations may vary depending on our total hash rate at a given point in time relative to the total hash rate of bitcoin. Our power revenue may vary due to external factors impacting supply and demand of electricity in the region including demand due to seasonal weather.
However, coin generation from our mining operations may vary depending on our total hash rate at a given point in time relative to the total hash rate of bitcoin.
With respect to wholesale sales of electricity, generators bid into the market the quantity of electricity that they are prepared to produce for each hour of the following day and the corresponding price.
The Power Generation Industry in New York State Wholesale markets for energy, capacity and ancillary services in New York State are administered by the NYISO. With respect to wholesale sales of electricity, generators bid into the market the quantity of electricity that they are prepared to produce for each hour of the following day and the corresponding price.
Applications for modification of the SPDES and Part 360 permits to reflect the implementation of the consent order, which are the final requirements of the consent order, were timely submitted to NYSDEC. Lockwood Hills is subject to EPA’s Coal Combustion Residuals Rule (the "CCR Rule"), as a coal combustion residual ("CCR") landfill.
Applications for modification of the SPDES and Part 360 permits to reflect the implementation of the consent order, which are the final requirements of the consent order, were timely submitted to NYSDEC.
See Note 3, " Merger with Support.com ", in the Notes to Consolidated Financial Statements for a further discussion of the Merger. Effective September 14, 2021, following the completion of the Merger, Support.com began operating as a separate operating and reporting segment. Our Support Services segment provided solutions and technical programs to customers delivered by home-based employees.
Effective September 14, 2021, following the completion of the Merger, Support.com began operating as a separate operating and reporting segment. Our Support Services segment provided solutions and technical programs to customers delivered by home-based employees. The Support Services segment provided customer service, sales support, and technical support primarily to large corporations, businesses and professional services organizations.
On January 30, 2023, we signed the Hosting Agreements and will generate revenue through hosting fees, which include a profit sharing component. As of January 30, 2023, we continue to own approximately 10,000 miners with a capacity of approximately 1.1 EH/s, and we will be evaluating options to install these miners at facilities that are hosted by third parties.
On January 30, 2023, we signed the NYDIG Hosting Agreement and generate revenue through hosting fees, which include a profit sharing component. As of December 31, 2023, we continue to own approximately 10,700 miners with a capacity of approximately 1.2 EH/s.
We have evaluated the impact of the CCR Rule on our consolidated financial position, results of operations, or cash flows and have accrued environmental liabilities under the rule based on current estimates. Environmental Liability As required by the NYSDEC, landfills are required to establish and maintain financial assurance mechanism to cover closure, post-closure care, and related expenses.
We have evaluated the impact of the CCR Rule on our consolidated financial position, results of operations, or cash flows and have accrued environmental liabilities under the rule based on current estimates.
Consent of the Yates County Industrial Development Agency would be required for both Greenidge Generation and Greenidge Pipeline for any type of merger, consolidation or change of control, which consent must be obtained prior to completion of such transaction.
Consent of the Yates County Industrial Development Agency would be required for both Greenidge Generation and Greenidge Pipeline for any type of merger, consolidation or change of control, which consent must be obtained prior to completion of such transaction. 18 The New York State Department of Environmental Conservation The operations of each of Greenidge Generation and the landfill owned by another subsidiary of Greenidge, Lockwood Hills LLC ("Lockwood Hills"), are subject to numerous NYSDEC and EPA regulations and requirements.
Permits Greenidge Generation’s operations are subject to the following NYSDEC-issued permits: Clean Air Act Title IV and Title V permits, Clean Water Act SPDES, and New York State Water Withdrawal Permit. Greenidge Generation also holds a Petroleum Bulk Storage registration issued by NYSDEC, which includes requirements applicable to the petroleum storage tanks located at the facility.
Greenidge Generation also holds a Petroleum Bulk Storage registration issued by NYSDEC, which includes requirements applicable to the petroleum storage tanks located at the facility. The Landfill is subject to the following NYSDEC-issued permits: SPDES Permit and Part 360 Solid Waste Management Permit.
These permits regulate air emissions associated with our operations and include all applicable Clean Air Act and New York State requirements. Greenidge Generation is also subject to the RGGI, which is a multi-state cap and trade program for carbon dioxide emissions that requires Greenidge Generation to purchase one RGGI allowance for every ton of CO2 emitted from the 17 facility.
Greenidge Generation is also subject to the RGGI, which is a multi-state cap and trade program for carbon dioxide emissions that requires Greenidge Generation to purchase one RGGI allowance for every ton of CO2 emitted from the facility. RGGI allowances are offered in quarterly auctions and are available from third parties.
The Landfill is subject to the following NYSDEC-issued permits: SPDES Permit and Part 360 Solid Waste Management Permit. Air The Clean Air Act Title IV and Title V permits authorize Greenidge Generation to fire natural gas (with up to 19% biomass co-firing) to produce electricity in accordance with the requirements of these permits.
Air The Clean Air Act Title IV and Title V permits authorize Greenidge Generation to fire natural gas (with up to 19% biomass co-firing) to produce electricity in accordance with the requirements of these permits. These permits regulate air emissions associated with our operations and include all applicable Clean Air Act and New York State requirements.
Further, the Millennium Pipeline price hub is a liquid market that allows us to hedge our purchases of this natural gas fuel opportunistically, mitigating the risk to our business from price fluctuations. Our data center in South Carolina is set on a 175-acre site which currently has approximately 20 MW of mining capacity.
Further, the Millennium Pipeline price hub is a liquid market that allows us to hedge our purchases of this natural gas fuel opportunistically, mitigating the risk to our business from price fluctuations. On November 9, 2023, we closed the sale of the South Carolina Facility as part of a deleveraging transaction.
Generally, an individual miner’s expected success rate in solving blocks and realizing bitcoin rewards over time is correlated with its proportion of the total network hash rate over the same period. "Difficulty" is a measure of the relative complexity of the algorithmic solution required to create a block and receive a bitcoin award.
An individual mining company like ours has a hash rate measured across the total number of the miners it deploys in its datacenter operations. Generally, an individual miner’s expected success rate in solving blocks and realizing bitcoin rewards over time is correlated with its proportion of the total network hash rate over the same period.
Through these sales, we generate three revenue streams: ◦ Energy revenue : When dispatched by the NYISO, we receive energy revenue based on the hourly price of power. ◦ Capacity revenue : We receive capacity revenue for committing to sell power to the NYISO when dispatched. ◦ Ancillary services revenue : When selected by the NYISO, we receive compensation for the provision of operating reserves. 7 Our datacenter operations in New York are powered by electricity generated directly by our power plant, which is referred to as "behind-the-meter" power as it is not subject to transmission and distribution charges from local utilities.
Through these sales, we generate three revenue streams: ◦ Energy revenue : When dispatched by the NYISO, we receive energy revenue based on the hourly price of power. ◦ Capacity revenue : We receive capacity revenue for committing to sell power to the NYISO when dispatched. ◦ Ancillary services revenue : When selected by the NYISO, we receive compensation for the provision of operating reserves.
We have contracts with Emera Energy covering both the purchase of natural gas and the bidding and sale of electricity through the NYISO.
We have contracts with Emera Energy covering both the purchase of natural gas and the bidding and sale of electricity through the NYISO. These sales accounted for approximately 9% and 18% of our total revenue for the years ended December 31, 2023 and 2022, respectively.
The bitcoin network protocol adjusts the network difficulty periodically based on the aggregate amount of hashing power deployed by the network with a goal of it requiring 10 minutes, on average, to create a new bitcoin block. At each interval of 2,016 blocks (which takes roughly two weeks), the network re-analyzes the interval and revises the difficulty index, if needed.
"Difficulty" is a measure of the relative complexity of the algorithmic solution required to create a block and receive a bitcoin award. The bitcoin network protocol adjusts the network difficulty periodically based on the aggregate amount of hashing power deployed by the network with a goal of it requiring 10 minutes, on average, to create a new bitcoin block.
Most of the EPA requirements that Greenidge Generation and Lockwood Hills are subject to are delegated to the NYSDEC and are regulated through permits issued by NYSDEC. Future laws or regulations may require the addition of environmental controls or impose restrictions on Greenidge Generation and Lockwood Hills operations, which could affect our operations.
Future laws or regulations may require the addition of environmental controls or impose restrictions on Greenidge Generation and Lockwood Hills operations, which could affect our operations. Complying with environmental laws often involves significant capital and operating expenses.
Intellectual Property We do not currently own any patents, trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights in connection with our existing and planned bitcoin mining related operations.
Our controlling stockholder, Atlas, is affiliated with an investment firm with more than $6.8 billion of assets under management and prior experience owning and operating more than 2,000 MW of power generation assets. 14 Intellectual Property We do not currently own any patents, trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights in connection with our existing and planned bitcoin mining related operations.
We converted substantially all of our earned bitcoin into U.S. dollars. On January 30, 2023, as part of an overall debt restructuring, Greenidge transferred ownership of miners with capacity of approximately 2.8 EH/s to its lender, NYDIG ABL LLC ("NYDIG"), in exchange for a reduction of debt.
On January 30, 2023, as part of an overall debt restructuring, we transferred ownership of miners with capacity of approximately 2.8 EH/s to our lender, NYDIG, in exchange for a reduction of debt. We host, power, and provide technical support services and other related services to miners owned by NYDIG's affiliates under a hosting services agreement and related orders.
We purchase power from a supplier of approximately 60% zero-carbon sourced energy, which results in a relatively stable energy and cost environment. Mining Pool Participation As part of our mining operations, we currently contribute our hash rate to certain mining pools, subject to their terms of service.
Mining Pool Participation As part of our mining operations, we currently contribute our hash rate to certain mining pools, subject to their terms of service.
The capacity market is designed to incentivize generation additions when reserve margins (excess capacity relative to peak demand) are low and to reduce capacity payments made to generators when reserve margins are high and there is excess capacity. 12 Competitive Advantages Electricity is the largest input cost for most cryptocurrency datacenter operations, and we believe owning a power generation facility provides us with a competitive advantage in our cryptocurrency datacenter operations.
The capacity market is designed to incentivize generation additions when reserve margins (excess capacity relative to peak demand) are low and to reduce capacity payments made to generators when reserve margins are high and there is excess capacity.
The adjudicatory hearing process is in its early stages, with no ruling yet on party status or the issues to be adjudicated. While no adjudicatory proceedings have been scheduled to date, we expect that the appeals process may take a number of years to fully resolve.
We timely submitted an interim appeal challenging such ruling with a motion to stay the broader appeals process while the interim appeal is being resolved. No further adjudicatory proceedings have been scheduled to date and we expect that the appeals process may take a number of years to fully resolve.
The New York State Department of Environmental Conservation The operations of each of Greenidge Generation and the landfill owned by another subsidiary of Greenidge, Lockwood Hills LLC ("Lockwood Hills"), are subject to numerous NYSDEC and EPA regulations and requirements. Lockwood Hills operates a landfill and leachate management facility (the "Landfill").
Lockwood Hills operates a landfill and leachate management facility (the "Landfill"). Most of the EPA requirements that Greenidge Generation and Lockwood Hills are subject to are delegated to the NYSDEC and are regulated through permits issued by NYSDEC.
ITEM 1. BUSINESS. Overview Greenidge is a vertically integrated cryptocurrency datacenter and power generation company that owns and operates facilities at two locations with a mining capacity of 76 MW: the Town of Torrey, New York (the "New York Facility") and Spartanburg, South Carolina (the "South Carolina Facility, together with our New York Facility, the "facilities").
ITEM 1. BUSINESS. Overview We own cryptocurrency datacenter operations in the Town of Torrey, New York (the "New York Facility") and owned and operated a facility in Spartanburg, South Carolina (the "South Carolina Facility" and, together with the New York Facility, the "facilities").
Greenidge expects to deploy its approximately 10,000 miners, with capacity of approximately 1.1 EH/s, disclosed above at third-party hosted facilities during 2023. Independent Electric Generation . We own and operate a 106 MW power generation facility that is connected to the New York Independent Systems Operator (the "NYISO"), which operates New York state’s power grid.
We own and operate a 106 MW power generation facility that is connected to the New York Independent Systems Operator (the "NYISO"), which operates New York state’s power grid. The aforementioned deleveraging transaction did not alter our ownership of this facility and we plan to continue to operate such facility.
Greenidge Generation has also drafted the CCR Rule documents associated with closure, and has a publicly available website that makes certain documents available to the public as required by the rule.
In accordance with the requirements of the CCR Rule, Lockwood has drafted required plans and documents and hosts a publicly available website that makes certain documents available to the public. Our communications with EPA with respect to the Landfill and continued CCR compliance requirements continued in January 2024 and remain ongoing.
Human Capital Management As of December 31, 2022, we had 347 employees, of which Greenidge employed 65 and Support.com employed 282. We had 132 employees based outside of the United States. None of our employees are covered by collective bargaining agreements. We believe our relationship with our employees is satisfactory.
Our power revenue may vary due to external factors impacting supply and demand of electricity in the region including demand due to seasonal weather. 15 Human Capital Management As of December 31, 2023, Greenidge had 40 employees. We had no employees based outside of the United States. None of our employees are covered by collective bargaining agreements.
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In 2022, our continuing operations were comprised of two primary revenue sources. Cryptocurrency Datacenters .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeProvisions in our restated certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management, including provisions that: • establish a dual-class common stock structure with ten (10) votes per share for the class B common stock; • vest solely in our board the power to fix the board and fill any vacancies and newly created directorships; • provide that directors may only be removed by the majority in voting power of the shares of stock then outstanding and entitled to vote thereon; • establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by our stockholders at annual stockholder meetings; and • require, among other things, advance board approval or subsequent approval by the board and holders of 66 2/3% of the outstanding voting stock not owned by the interested stockholder for any business combination with an interested stockholder, which is defined as a person or entity owning 15% or more of our outstanding voting stock or an affiliate or associate of us that owned 15% or more of the voting power of the outstanding voting stock at any time within a period of three years prior to the date of such determination, subject to certain exceptions. 43 These provisions may frustrate or prevent any attempts by our stockholders to effect a change in control, or to replace or remove our current management by making it more difficult for our stockholders to replace members of the board of directors, which is responsible for appointing the members of management.
Biggest changeProvisions in our second amended and restated certificate of incorporation, as amended, and our amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management, including provisions that: • establish a dual-class common stock structure with ten (10) votes per share for the Class B common stock and one (1) vote per share for the Class A common stock; 48 • vest solely in our board the power to fix the size of the board and fill any vacancies and newly created directorships; • provide that directors may only be removed by the majority in voting power of the shares of stock then outstanding and entitled to vote thereon, voting together as a single class; • establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by our stockholders at annual stockholder meetings; and • require, among other things, advance board approval or subsequent approval by the board and holders of 66 2/3% of the outstanding voting stock not owned by the interested stockholder for any business combination with an interested stockholder, which is defined as a person or entity owning 15% or more of our outstanding voting stock or an affiliate or associate of us that owned 15% or more of the voting power of the outstanding voting stock at any time within a period of three years prior to the date of such determination, subject to certain exceptions.
Risks Related to Bitcoin and Cryptocurrency Industry As the aggregate amount of computing power, or hash rate, in the bitcoin network increases, the amount of bitcoin earned per unit of hash rate decreases; as a result, in order to maintain our market share, we may have to incur significant capital expenditures in order to expand our fleet of miners.
Risks Related to Bitcoin and Cryptocurrency Industry As the aggregate amount of computing power, or hash rate, in the bitcoin network increases, the amount of bitcoin earned per unit of hash rate decreases; as a result, in order to maintain our market share, we may have to incur significant capital expenditures to expand our fleet of miners.
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 engage in bitcoin 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.
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 may diminish the usefulness of bitcoin as a payment system and harm public perception of bitcoin.
The difficulty that many businesses that provide bitcoin or derivatives on other cryptocurrency-related activities have and may continue to have in finding banks and financial institutions willing to provide them services may diminish the usefulness of bitcoin as a payment system and harm public perception of bitcoin.
The cryptomining industry is subject to various risks which could adversely affect our current customer’s ability to continue to operate their businesses, including, but not limited to: • ongoing and future government or regulatory actions that could effectively prevent mining operations, with little to no access to policymakers and lobbying organizations in many jurisdictions; • a high degree of uncertainty about cryptoassets’ status as a "security," a "commodity" or a "financial instrument" in any relevant jurisdiction which may subject cryptomining industry to regulatory scrutiny, investigations, fines, and other penalties; • banks or financial institutions may close the accounts of businesses engaging in cryptoasset- related activities as a result of compliance risk, cost, government regulation or public pressure; • use of cryptoassets in the retail and commercial marketplace is limited; • extreme volatility in the market price of cryptoassets that may harm our customers financial resources, ability to meet their contractual obligations to us or cause them to reduce or cease mining operations; • use of a ledger-based platform may not necessarily benefit from viable trading markets or the rigors of listing requirements for securities creating higher potential risk for fraud or the manipulation of the ledger due to a control event; • concentrated ownership, large sales of cryptoassets, or distributions or redemptions by vehicles invested in cryptoassets could have an adverse effect on the demand or, and market price of, such cryptoasset; • the cryptomining industry could face difficulty adapting to emergent digital ledgers, blockchains, or alternatives thereto, rapidly changing technology or methods of, rules of, or access to, platforms; • the number of cryptoassets awarded for solving a block in a blockchain could decrease which may adversely affect the incentive to expend processing power to solve blocks and/or continue mining and miners may not have access to resources to invest in increasing processing power when necessary in order to in order to maintain the continuing revenue production of their mining operations; • intellectual property claims or claims relating to the holding and transfer of cryptoassets and source code, which, regardless of the merit of any such action, could reduce confidence in some or all cryptoasset networks’ long-term viability or the ability of end-users to hold and transfer cryptoassets; • contributors to the open-source structure of the cryptoasset network protocols are generally not directly compensated for their contributions in maintaining and developing the protocol and may lack incentive to properly monitor and upgrade the protocols; • a disruption of the Internet on which mining cryptoassets is dependent; • decentralized nature of the governance of cryptoasset systems, generally by voluntary consensus and open competition with no clear leadership structure or authority, may lead to ineffective decision making that slows development or prevents a network from overcoming emergent obstacles; and • security breaches, hacking, or other malicious activities or loss of private keys relating to, or hack or other compromise of, digital wallets used to store cryptoassets could adversely affect the ability to access or sell cryptoassets or effectively utilize impacted platforms.
The cryptomining industry is subject to various risks which could adversely affect our customer’s ability to continue to operate their businesses, including, but not limited to: • ongoing and future government or regulatory actions that could effectively prevent mining operations, with little to no access to policymakers and lobbying organizations in many jurisdictions; 23 • a high degree of uncertainty about cryptoassets’ status as a "security," a "commodity," or a "financial instrument" in any relevant jurisdiction which may subject cryptomining industry to regulatory scrutiny, investigations, fines, and other penalties; • banks or financial institutions may close the accounts of businesses engaging in cryptoasset- related activities as a result of compliance risk, cost, government regulation, or public pressure; • use of cryptoassets in the retail and commercial marketplace is limited; • extreme volatility in the market price of cryptoassets that may harm our customers financial resources, ability to meet their contractual obligations to us, or cause them to reduce or cease mining operations; • use of a ledger-based platform may not necessarily benefit from viable trading markets or the rigors of listing requirements for securities, creating higher potential risk for fraud or the manipulation of the ledger due to a control event; • concentrated ownership, large sales of cryptoassets, or distributions or redemptions by vehicles invested in cryptoassets could have an adverse effect on the demand for, and market price of, such cryptoasset; • the cryptomining industry could face difficulty adapting to emergent digital ledgers, blockchains, or alternatives thereto, rapidly changing technology or methods of, rules of, or access to, platforms; • the number of cryptoassets awarded for solving a block in a blockchain could decrease which may adversely affect the incentive to expend processing power to solve blocks and/or continue mining, and miners may not have access to resources to invest in increasing processing power when necessary in order to maintain the continuing revenue production of their mining operations; • intellectual property claims or claims relating to the holding and transfer of cryptoassets and source code, which, regardless of the merit of any such action, could reduce confidence in some or all cryptoasset networks’ long-term viability or the ability of end-users to hold and transfer cryptoassets; • contributors to the open-source structure of the cryptoasset network protocols are generally not directly compensated for their contributions in maintaining and developing the protocol and may lack incentive to properly monitor and upgrade the protocols; • a disruption of the Internet on which mining cryptoassets is dependent; • decentralized nature of the governance of cryptoasset systems, generally by voluntary consensus and open competition with no clear leadership structure or authority, may lead to ineffective decision making that slows development or prevents a network from overcoming emergent obstacles; and • security breaches, hacking, or other malicious activities or loss of private keys relating to, or hack or other compromise of, digital wallets used to store cryptoassets could adversely affect the ability to access or sell cryptoassets or effectively utilize impacted platforms.
The factors include, but are not limited to: • continued worldwide growth in the adoption and use of bitcoin as a medium to 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 bitcoin mining pools; • the availability and popularity of other cryptocurrencies and 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; • environmental restrictions on the use of electricity 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 cryptocurrencies generally.
The factors include, but are not limited to: • continued worldwide growth in the adoption and use of bitcoin as a medium to 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 bitcoin mining pools; • the availability and popularity of other cryptocurrencies and 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; 41 • general economic conditions and the regulatory environment relating to cryptocurrencies; • environmental restrictions on the use of electricity 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 cryptocurrencies generally.
We may not be able to attract customers to our hosting capabilities for a number of reasons, including if: • there is a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate; • we fail to provide competitive pricing terms or effectively market them to potential customers; • we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations and connectivity; • businesses decide to host internally as an alternative to the use of our services; • we fail to successfully communicate the benefits of our services to potential customers; • we are unable to strengthen awareness of our brand; • we are unable to provide services that our existing and potential customers desire; or 22 • our customers are unable to secure an adequate supply of new generation digital asset mining equipment to host with us.
We may not be able to attract customers to our hosting capabilities for a number of reasons, including if: • there is a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate; • we fail to provide competitive pricing terms or effectively market them to potential customers; • we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations, and connectivity; • businesses decide to host internally as an alternative to the use of our services; • we fail to successfully communicate the benefits of our services to potential customers; • we are unable to strengthen awareness of our brand; • we are unable to provide services that our existing and potential customers desire; or • our customers are unable to secure an adequate supply of new generation digital asset mining equipment to host with us.
As a result, they may be more likely to 39 fluctuate in value due to changing investor confidence in future appreciation (or depreciation) in their market prices, which could adversely affect the value of bitcoin mined by us, which could lead to an adverse effect on our results of operations and financial condition.
As a result, they may be more likely to fluctuate in value due to changing investor confidence in future appreciation (or depreciation) in their market prices, which could adversely affect the value of bitcoin mined by us, which could lead to an adverse effect on our results of operations and financial condition.
Our current strategy will continue to expose us to the numerous risks and volatility associated with the cryptocurrency datacenter and power generation sectors, including fluctuating bitcoin to U.S. dollar prices, the profitability of our hosting arrangement, the number of market participants mining bitcoin, the availability of other power generation facilities to expand operations and regulatory changes.
Our current strategy will continue to expose us to the numerous risks and volatility associated with the cryptocurrency datacenter and power generation sectors, including fluctuating bitcoin to U.S. dollar prices, the profitability of our hosting arrangement with NYDIG, the number of market participants mining bitcoin, the availability of other power generation facilities to expand operations and regulatory changes.
If there is a delay in obtaining any required environmental regulatory approvals, if we fail to obtain, maintain or comply with any such approval or if an approval is retroactively disallowed or adversely modified, the operation of our generation facilities could be stopped, 31 disrupted, curtailed or modified or become subject to additional costs.
If there is a delay in obtaining any required environmental regulatory approvals, if we fail to obtain, maintain, or comply with any such approval, or if an approval is retroactively disallowed or adversely modified, the operation of our generation facilities could be stopped, disrupted, curtailed, or modified or become subject to additional costs.
If a malicious actor or botnet, a collection of computers controlled by networked software coordinating the actions of the computers, obtains over 50% of the processing power dedicated to mining bitcoin, such actor may be able to construct fraudulent blocks or prevent certain transactions from completing in a timely manner, or at all.
If a malicious actor or botnet, a collection of computers controlled by networked software coordinating the actions of the computers, obtains control over 50% of the processing power dedicated to mining bitcoin, such actor may be able to construct fraudulent blocks or prevent certain transactions from completing in a timely manner, or at all.
In addition, this concentrated control will have the effect of delaying, preventing or deterring a change in control of Greenidge, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of Greenidge, and might have a negative effect on the market price of shares of our class A common stock.
In addition, this concentrated control will have the effect of delaying, preventing or deterring a change in control of 45 Greenidge, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of Greenidge, and might have a negative effect on the market price of shares of our Class A common stock.
Any requirements imposed by the CFTC related to our cryptocurrency datacenter activities or our transactions in bitcoin could cause us to incur additional extraordinary, nonrecurring expenses, thereby adversely affecting our results of operations. In addition, changes in the classification of bitcoins could subject us, as a result of our cryptocurrency datacenter operations, to additional regulatory oversight by the agency.
Any requirements imposed by the CFTC related to our cryptocurrency datacenter activities or our transactions in bitcoin could cause us to incur additional extraordinary, nonrecurring expenses, thereby adversely affecting our results of operations. 37 In addition, changes in the classification of bitcoins could subject us, as a result of our cryptocurrency datacenter operations, to additional regulatory oversight by the agency.
We are unable to predict the nature or extent of new and proposed legislation and regulation affecting the cryptocurrency industry, or the potential impact of the use of cryptocurrencies by specially designated nationals or other blocked or 40 sanctioned persons, which could have material adverse effects on our business and our industry more broadly.
We are unable to predict the nature or extent of new and proposed legislation and regulation affecting the cryptocurrency industry, or the potential impact of the use of cryptocurrencies by specially designated nationals or other blocked or sanctioned persons, which could have material adverse effects on our business and our industry more broadly.
Future issuances of equity or debt securities may adversely affect the value of our common stock. We may need to raise additional capital in the future, including to expand our operations and pursue our growth strategies, to respond to competitive pressures or to meet capital needs in response to operating losses or unanticipated working capital requirements.
Future issuances of equity or debt securities may adversely affect the value of our common stock. We may need to raise additional capital in the future, including to expand our operations and pursue our growth strategies, to respond to competitive pressures or to meet capital needs in response to operating losses or unanticipated 21 working capital requirements.
These alternative energy sources could result in a decline to the dispatch and capacity factors of our power plant located in the town of Torrey, New York. As a result of these factors, we may experience material declines in our power generation revenue. 28 We sell capacity, energy and ancillary services to the wholesale power grid managed by the NYISO.
These alternative energy sources could result in a decline to the dispatch and capacity factors of our power plant located in the town of Torrey, New York. As a result of these factors, we may experience material declines in our power generation revenue. We sell capacity, energy, and ancillary services to the wholesale power grid managed by the NYISO.
If we incur any additional debt that is secured, the holders of that debt will be entitled to share in the proceeds distributed in connection with any enforcement against the collateral or an insolvency, liquidation, reorganization, dissolution or other winding-up of the applicable obligor prior to applying any such proceeds to the notes.
If we incur any additional debt that is secured, the holders of that debt will be entitled to share in the proceeds distributed in connection with any enforcement against the collateral or an insolvency, liquidation, reorganization, dissolution, or other winding-up of the applicable obligor prior to applying any such proceeds to the Senior Notes.
This may increase the likelihood of a subsequent price decrease as crisis-driven purchasing behavior dissipates, adversely affecting the value of our inventory following such downward adjustment. Such risks are similar to the risks of purchasing commodities in general uncertain times, such as the risk of purchasing, holding or selling gold.
This may also increase the likelihood of a subsequent price decrease as crisis-driven purchasing behavior dissipates, adversely affecting the value of our inventory following such downward adjustment. Such risks are similar to the risks of purchasing commodities in general uncertain times, such as the risk of purchasing, holding, or selling gold.
Delays in actions that require the assistance of such third parties, in receiving required permits and approvals or in mediations with 23 local communities, if any, may negatively impact our construction timelines and budget or result in any new datacenters not being completed at all.
Delays in actions that require the assistance of such third parties, in receiving required permits and approvals or in mediations with local communities, if any, may negatively impact our construction timelines and budget or result in any new datacenters not being completed at all.
To the extent that any transaction processors cease to record transactions on a network, such transactions will not be recorded on the blockchain of the network until a block is solved by a transaction processor that does not require the payment of 35 transaction fees or other incentives.
To the extent that any transaction processors cease to record transactions on a network, such transactions will not be recorded on the blockchain of the network until a block is solved by a transaction processor that does not require the payment of transaction fees or other incentives.
In this respect, bitcoin may be particularly affected as it relies on the "proof of work" validation, which due to its inherent characteristics may be particularly hard to scale to allow simultaneous processing of multiple daily transactions by users.
In this respect, bitcoin may be particularly affected as it relies on the "proof of work" validation, which due to its inherent characteristics may be particularly hard to scale to allow simultaneous 42 processing of multiple daily transactions by users.
We may not have the adequate capital or other resources to fix or otherwise address these factors or issues in a timely manner or at all, and we 25 may not have access to the necessary parts or equipment that are required to fix or otherwise address such factors or issues.
We may not have the adequate capital or other resources to fix or otherwise address these factors or issues in a timely manner or at all, and we may not have access to the necessary parts or equipment that are required to fix or otherwise address such factors or issues.
In addition, new environmental legislation or regulations, if enacted, or changed interpretations of existing laws, may cause activities at our facilities to need to be changed to avoid violating applicable laws and regulations or eliciting claims that historical activities at our facilities violated applicable laws and regulations.
In addition, new environmental legislation or regulation, if enacted, or changed interpretations of existing laws, may cause activities at our facilities to need to be changed to avoid violating applicable laws and regulations or eliciting claims that historical activities at our facilities violated applicable laws and regulations.
Our operations and financial performance generally may be impacted by changes in the supply of fuel and other required products, price fluctuations in the wholesale power and natural gas markets, and other market factors beyond our control.
Our operations and financial performance generally may be impacted by changes 30 in the supply of fuel and other required products, price fluctuations in the wholesale power and natural gas markets, and other market factors beyond our control.
We have put in place training and security measures designed to protect against cyberattacks, phishing, security breaches and misappropriation or corruption of our systems, intentional or unintentional disclosure of confidential information, or disruption of our operations.
We have put in place training and security measures designed to protect against cyberattacks, phishing, security breaches, and misappropriation or corruption of our systems, intentional or unintentional disclosure of confidential 26 information, or disruption of our operations.
If we do not adapt to or comply with investor, lender or other industry shareholder expectations and standards and potential government regulations, which are evolving but may relate to the suitable deployment of electric power, or which are perceived to have not responded appropriately to the growing concern for ESG issues, our reputation may suffer, which would have a material adverse effect on our business, financial condition and results of operations.
If we do not adapt to or comply with investor, lender, or other industry stakeholder expectations and standards and potential government regulations, which are evolving but may relate to the suitable deployment of electric power, or which are perceived to have not responded appropriately to the growing concern for ESG issues, our reputation may suffer, which would have a material adverse effect on our business, financial condition, and results of operations.
The cost of such compliance would result in us incurring 33 substantial additional expenses, and the failure to register if required would have a materially adverse impact on our operations.
The cost of such compliance would result in us incurring substantial additional expenses, and the failure to register if required would have a materially adverse impact on our operations.
These regulations, and any further changes thereto, or adoption of additional regulations, including any regulations relating to position limits on futures and other derivatives or margin for derivatives, could negatively impact our ability to hedge our portfolio in an 30 efficient, cost-effective manner by, among other things, potentially decreasing liquidity in the forward commodity and derivatives markets or limiting our ability to utilize non-cash collateral for derivatives transactions.
These regulations, and any further changes thereto, or adoption of additional regulations, including any regulations relating to position limits on futures and other derivatives or margin for derivatives, could negatively impact our ability to hedge our portfolio in an efficient, cost-effective manner by us, among other things, potentially decreasing liquidity in the forward commodity and derivatives markets or limiting our ability to utilize non-cash collateral for derivatives transactions.
We have little means of recourse against the mining pool operator if we determine the proportion of the reward paid out to us by the mining pool operator is incorrect, other than leaving the pool.
We have little means of recourse against the mining pool operator if we determine the proportion of the reward paid out to us by the mining pool operator is incorrect, other than leaving the 43 pool.
We could incur large losses to modify our operations to avoid the need to register as an investment company or could incur significant expenses to register as an investment company or could terminate operations altogether.
We could incur large losses to modify our 36 operations to avoid the need to register as an investment company or could incur significant expenses to register as an investment company or could terminate operations altogether.
There is currently significant uncertainty about the future relationship between the United States and various other countries, including China, the European Union, Canada, and Mexico, with respect to trade policies, treaties, tariffs and customs duties, and taxes. For example, since 2019, the U.S. government has implemented significant changes to U.S. trade policy with respect to China.
There is currently significant uncertainty about the future relationship between the United States and various other countries, including China, members of the European Union, Canada, and Mexico, with respect to trade policies, treaties, tariffs and customs duties, and taxes. For example, since 2019, the U.S. government has implemented significant changes to U.S. trade policy with respect to China.
We will qualify as a smaller reporting company until our public float, as of the last day of our second fiscal quarter, exceeds $250 million; because our common stock held by our directors, executive officers and Atlas and its affiliates are excluded from the calculation of public float, we anticipate qualifying as a smaller reporting company for the near future.
We also qualify as a smaller reporting company until our public float, as of the last day of our second fiscal quarter, exceeds $250 million; because our common stock held by our directors, executive officers and Atlas and its affiliates are excluded from the calculation of public float, we anticipate qualifying as a smaller reporting company for the near future.
If we are unable to obtain or maintain hosting customers at favorable pricing terms or at all, it could have a material adverse effect on our business, financial condition and results of operations. Our success depends on external factors in the cryptomining industry. We have a single hosting customer in the cryptomining industry.
If we are unable to obtain or maintain hosting customers at favorable pricing terms or at all, it could have a material adverse effect on our business, financial condition and results of operations. Our success depends on external factors in the cryptomining industry.
The dual class structure of our common stock will have the effect of concentrating voting power with Atlas and its affiliates, which may depress the market value of the class A common stock and will limit a stockholder or a new investor’s ability to influence the outcome of important transactions, including a change in control.
The dual class structure of our common stock has the effect of concentrating voting power with Atlas and its affiliates, which may depress the market value of the Class A common stock and will limit a stockholder or a new investor’s ability to influence the outcome of important transactions, including a change in control.
Further, as the majority of our information technology are third party cloud-computing arrangements, a disruption occurring at one of those third-parties for the above risks, or other causes outside of our control, could materially adversely affect our business, financial condition and results of operations.
Further, as the majority of our information technology involves party cloud-computing arrangements, a disruption occurring at one of those third-parties for the above risks, or other causes outside of our control, could materially adversely affect our business, financial condition, and results of operations.
A significant disruption in Internet connectivity could disrupt a currency’s network operations and have an adverse effect on the price of bitcoin and our ability to meet the minimum uptime requirements in our hosting agreement and mine bitcoin, which could, depending on the duration of the disruption, materially and adversely impact our results of operations.
A significant disruption in Internet connectivity could disrupt a currency’s network operations and have an adverse effect on the price of bitcoin and our ability to meet the minimum uptime requirements in our hosting agreements and mine bitcoin, which could, depending on the duration of the disruption, materially and adversely impact our results of operations.
Given the long production period to manufacture and assemble bitcoin miners and the current global semiconductor chip shortage, there can be no assurance that we can acquire enough bitcoin mining computers or replacement parts on a cost-effective basis – or at all – for the maintenance and expansion of our cryptocurrency datacenter operations.
Given the long production period to manufacture and assemble bitcoin miners and the current global semiconductor chip shortage, we can provide no assurance that we can acquire enough bitcoin mining computers or replacement parts on a cost-effective basis – or at all – for the maintenance and expansion of our cryptocurrency datacenter operations.
There is uncertainty regarding the Company's financial condition and substantial doubt about its ability to continue as a going concern for a reasonable period of time. We may need to raise additional capital to grow our business and may not be able to do so on favorable terms, if at all.
There is uncertainty regarding our financial condition and substantial doubt about our ability to continue as a going concern for a reasonable period of time. We may need to raise additional capital to grow our business and may not be able to do so on favorable terms, if at all.
We are in the process of developing other sites and expanding our existing locations for our hosting customer as well as to deploy our mining equipment, and any disruption in developing such sites may delay our efforts..
We are in the process of developing other sites and expanding our existing locations for our hosting customers as well as to deploy our mining equipment, and any disruption in developing such sites may delay our efforts.
Furthermore, we are dependent on the accuracy of the mining pool operator’s record keeping to accurately record the total processing power provided to the pool for a given bitcoin mining application in order to assess the proportion of that total processing power we provided.
Furthermore, we are dependent on the accuracy of the mining pool operator’s recordkeeping to accurately record the total processing power provided to the pool for a given bitcoin mining application in order to assess the proportion of that total processing power we provided.
Unless otherwise indicated, reference in this section and elsewhere in this Annual Report on Form 10-K to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, our business, reputation, financial condition, results of operations, revenue and our future prospects.
Unless otherwise indicated, reference in this section and elsewhere in this Annual Report to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, our business, reputation, financial condition, results of operations, revenue and our future prospects.
As a result, the marketplace may lose confidence in, or may experience problems relating to, cryptocurrency exchanges, including prominent exchanges handling a significant portion of the volume of digital asset trading.
The marketplace may lose confidence in, or may experience problems relating to, cryptocurrency exchanges, including prominent exchanges handling a significant portion of the volume of digital asset trading.
A successful claim for which we are not fully insured could hurt our financial results and materially harm our financial condition. Further, due to rising insurance costs and changes in the insurance markets, we cannot provide any assurance that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available.
A successful claim for which we are not fully insured could hurt our financial results and materially harm our financial condition. Further, due to rising insurance costs and changes in the insurance markets, we can provide no assurance that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available.
The most recent halving for bitcoin occurred on May 11, 2020 at block 630,000 and the reward was reduced to 6.25. It is expected that the next halving will likely occur in 2024. This process will reoccur until the total amount of bitcoin currency rewards issued reaches 21 million, which is expected around the year 2140.
The most recent halving for bitcoin occurred on May 11, 2020 at block 630,000 and the reward was reduced to 6.25. The next halving will occur in April 2024. This process will reoccur until the total amount of bitcoin currency rewards issued reaches 21 million, which is expected around the year 2140.
Bitcoin prices have historically been volatile and impacted by a variety of factors, including market perception, the degree to which bitcoin is accepted as a means of payment, the volume of purchases and sales of bitcoin by market participants, real or perceived competition from alternative cryptocurrencies as well as other risks and uncertainties described in this Annual Report on Form 10-K.
Bitcoin prices have historically been volatile and impacted by a variety of factors, including market perception, the degree to which bitcoin is accepted as a means of payment, the volume of purchases and sales of bitcoin by market participants, real or perceived competition from alternative cryptocurrencies as well as other risks and uncertainties described in this Annual Report.
Risks Related to Our Business General Risks Because there is a risk as to our ability to continue as a going concern for a reasonable period of time, an investment in our common stock is highly speculative. Holders of our common stock could suffer a total loss of their investment.
Risks Related to Our Business General Risks Because there is substantial doubt as to our ability to continue as a going concern for a reasonable period of time, an investment in our common stock is highly speculative. Holders of our common stock could suffer a total loss of their investment.
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
The ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.
Management's ability to successfully implement these options could be negatively impacted by items outside of its control, in particular, significant decreases in the price of bitcoin, regulatory changes concerning cryptocurrency, increases in energy costs or other macroeconomic conditions.
Our ability to successfully implement these options could be negatively impacted by items outside of our control, in particular, significant decreases in the price of bitcoin, regulatory changes concerning cryptocurrency, increases in energy costs or other macroeconomic conditions.
Bitcoin has had a history of price fluctuations around the halving of its rewards, and there can be no assurance that any price change will be favorable or would compensate for the reduction in bitcoin mining reward in connection with a halving.
Bitcoin has had a history of price fluctuations around the halving of its rewards, and we can provide no assurance that any price change will be favorable or would compensate for the reduction in bitcoin mining reward in connection with a halving.
We maintain an amount of insurance protection that we consider adequate, but we cannot provide any assurance that our insurance will be sufficient or effective under all circumstances and against all hazards or liabilities to which we may be subject and, even if we do have insurance coverage for a particular circumstance, we may be subject to a large deductible and maximum cap.
We maintain an amount of insurance protection that we consider adequate, but we can provide no assurance that our insurance will be sufficient or effective under all circumstances and against all hazards or liabilities to which we may be subject and, even if we do have insurance coverage for a particular circumstance, we may be subject to a large deductible and maximum cap.
This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. Certain statements in the Risk Factors below are forward-looking statements. See the section titled "Cautionary Statement Regarding Forward-Looking Statements".
This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. Certain statements in the Risk Factors below are forward-looking statements. See the section titled "Cautionary Statement Regarding Forward-Looking Statements".
On December 13, 2022, we received a letter from the listing qualifications department of the Nasdaq/ notifying us that for the prior 30 consecutive business days the bid price of our common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq listing rules (the "Bid Price Requirement").
On December 13, 2022, we received a letter from the Nasdaq listing qualifications department notifying us that for the prior 30 consecutive business days, the bid price of our Class A common stock had closed below $1.00 per share, the minimum closing bid price required by Nasdaq’s continued listing requirements.
These factors include, but are not limited to, the following: • the underlying volatility in pricing of, and demand for, energy and/or bitcoin; • price and volume fluctuations in the stock markets generally which create highly variable and unpredictable pricing of equity securities; • actual or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market expectations with regard to our earnings; • significant volatility in the market price and trading volume of securities of companies in the sectors in which our business operates, which may not be related to the operating performance of these companies and which may not reflect the performance of our businesses; • loss of a major funding source; • operating performance of companies comparable to us; • changes in regulations or tax law, including those affecting the holding, transferring or mining of cryptocurrency; • share transactions by principal stockholders; • the Company’s continued listing on the Nasdaq; • recruitment or departure of key personnel; • geopolitical factors, including Russia’s invasion of Ukraine; • general economic trends and other external factors including inflation and interest rates; • increased scrutiny by governmental authorities or individual actors or community groups regarding our business, our competitors or the industry in which we operate; • publication of research reports by analysts and others about us or the cryptocurrency mining industry, which may be unfavorable, inaccurate, inconsistent or not disseminated on a regular basis; • sentiment of retail investors about our class A common stock and business generally (including as may be expressed on financial trading and other social media sites and online forums); • speculation in the media or investment community about us or the cryptocurrency industry more broadly; and • the occurrence of any of the other risk factors included in this Annual Report on Form 10-K. 42 We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies or smaller reporting companies, and stockholders could receive less information than they might expect to receive from larger or more mature public companies.
These factors include, but are not limited to, the following: • the underlying volatility in pricing of, and demand for, energy and/or bitcoin; • price and volume fluctuations in the stock markets generally, which create highly variable and unpredictable pricing of equity securities; • actual or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market expectations with regard to our earnings; • significant volatility in the market price and trading volume of securities of companies in the sectors in which our business operates, which may not be related to the operating performance of these companies and which may not reflect the performance of our businesses; • loss of a major funding source; • operating performance of companies comparable to us; • changes in regulations or tax law, including those affecting the holding, transferring, or mining of cryptocurrency; • share transactions by principal stockholders; • the Company’s continued listing on the Nasdaq; • recruitment or departure of key personnel; • geopolitical factors, including the ongoing war between Russia and Ukraine, the conflict in the Israel-Gaza region, and continued hostilities in the Middle East; • general economic trends and other external factors including inflation and interest rates; • increased scrutiny by governmental authorities or individual actors or community groups regarding our business, our competitors, or the industry in which we operate; • publication of research reports by analysts and others about us or the cryptocurrency mining industry, which may be unfavorable, inaccurate, inconsistent, or not disseminated on a regular basis; • sentiment of retail investors about our Class A common stock and business generally (including as may be expressed on financial trading and other social media sites and online forums); • speculation in the media or investment community about us or the cryptocurrency industry more broadly; and • the occurrence of any of the other risk factors included in this Annual Report. 47 We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies or smaller reporting companies, and stockholders could receive less information than they might expect to receive from larger or more mature public companies.
ITEM 1A. RISK FACTORS. In evaluating our company and our business, you should carefully consider the risks and uncertainties described below, together with the other information in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes and in the section titled "Management’s Discussion and Analysis of Financial Condition and Results of Operations".
ITEM 1A. RISK FACTORS. In evaluating our company and our business, you should carefully consider the risks and uncertainties described below, together with the other information in this Annual Report, including our consolidated financial statements and the related notes and in the section titled "Management’s Discussion and Analysis of Financial Condition and Results of Operations".
The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There can be no assurances that we will operate profitably.
The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions, and a corresponding customer base. We can provide no assurance that we will operate profitably.
The bitcoin reward for successfully uncovering a block will halve several times in the future, and bitcoin value may not adjust to compensate us for the reduction in the rewards we receive from our bitcoin mining efforts.
The bitcoin reward for successfully uncovering a block will halve several times in the future, including in April 2024, and bitcoin value may not adjust to compensate us for the reduction in the rewards we receive from our bitcoin mining efforts.
There is substantial doubt about the Company’s ability to continue as a going concern and to manage its liabilities in light of its current operating environment, an investment in the Company’s common stock is highly speculative. The Company’s prospects for operating a viable hosting business are uncertain.
There is substantial doubt about our ability to continue as a going concern and to manage our liabilities in light of our current operating environment, and an investment in our common stock is highly speculative. Our prospects for operating a viable hosting business are uncertain.
There can be no assurance that the IRS will not alter its existing position with respect to digital assets in the future or that other state, local and non-U.S. taxing authorities or courts will follow the approach of the IRS with respect to the treatment of digital assets such as bitcoins for income tax and sales tax purposes.
We can provide no assurance that the IRS will not alter its existing position with respect to digital assets in the future or that other state, local and non-U.S. taxing authorities or courts will follow the approach of the IRS with respect 38 to the treatment of digital assets such as bitcoins for income tax and sales tax purposes.
Alternatively, if a court were to find the choice of forum provisions contained in our second amended and restated certificate of incorporation 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 operating results. ITEM 1B. UNRESOLVED STAFF COMMENTS.
Alternatively, if a court were to find the choice of forum provisions contained in our second amended and restated certificate of incorporation 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 operating results. 49
Failure to comply with such requirements could result in the shutdown of a non-complying facility, the imposition of liens, fines, and/or civil or criminal liability and or costly litigations before the agencies and/or in state of federal court.
Failure to comply with such requirements could result in the shutdown of a non-complying facility, the imposition of liens, fines, civil or criminal 33 liability, or costly litigation before the agencies or in state or federal court.
At present, our management team is small, and we will need to continue to grow our management in order to alleviate pressure on our existing management team and in order to continue to develop our business and execute on any future identification and expansion into other potential opportunities.
We will need to continue to grow our management in order to alleviate pressure on our existing management team and in order to continue to develop our business and execute on any future identification and expansion into other potential opportunities.
Risks Related to the Ownership of Our Securities Because we are a "controlled company" within the meaning of the Nasdaq listing rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies.
Because we are a "controlled company" within the meaning of the Nasdaq listing rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies.
There is also a risk that any mechanisms of increasing the scale of digital asset settlements may significantly alter the competitive dynamics in the digital asset market and may adversely affect the value of bitcoin and the price of our class A common stock. Any of which could have a material adverse effect on our results of operations.
There is also a risk that any mechanisms of increasing the scale of digital asset settlements may significantly alter the competitive dynamics in the digital asset market and may adversely affect the value of bitcoin. Any of these scaling challenges could have a material adverse effect on our results of operations and the market value of our common stock.
There is no assurance that the currently installed emissions control equipment at the natural gas-fueled generation facilities owned and operated by us will satisfy the requirements under any future EPA or state environmental regulations.
We can provide no assurance that the currently installed emissions control equipment at the natural gas-fueled generation facilities owned and operated by us will satisfy the requirements under any future EPA or state environmental regulations.
Increasing scrutiny and changing expectations from investors, lenders, customers, government regulators and other market participants with respect to our Environmental, Social and Governance ("ESG") policies may impose additional costs on us or expose us to additional risks. Companies across all industries and around the globe are facing increasing scrutiny relating to their ESG policies.
Increasing scrutiny and changing expectations from investors, lenders, customers, government regulators and other market participants with respect to our ESG policies and the impacts of climate change may impose additional costs on us or expose us to additional risks. Companies across all industries and around the globe are facing increasing scrutiny relating to their ESG policies.
Competition from existing and future competitors, particularly those that have access to competitively priced energy, could result in our inability to secure acquisitions and partnerships and to successfully execute our business plan. If we are unable compete effectively, our business could be negatively affected.
We may be adversely affected by competition from other methods of investing in bitcoin. Competition from existing and future competitors, particularly those that have access to competitively priced energy, could result in our inability to secure acquisitions and partnerships and to successfully execute our business plan. If we are unable compete effectively, our business could be negatively affected.
During the course of implementing any such new technology into our operations, we may experience 36 system interruptions. Furthermore, there can be no assurances that we will realize, in a timely manner or at all, the benefits that we may expect as a result of our implementing new technology into our operations.
During the course of implementing any such new technology into our operations, we may experience system interruptions. Furthermore, we can provide no assurance that we will realize, in a timely manner or at all, the benefits that we may expect as a result of our implementing new technology into our operations. As a result, our results of operations may suffer.
We can remain an emerging growth company for up to five years, although if the market value of our class A common stock that is held by non-affiliates exceeds $700 million or more as of any June 30 before that time, we would cease to be an emerging growth company as of the following December 31.
We can remain an emerging growth company for up to five years from our first sale of common stock pursuant to an effective Securities Act registration statement in 2021, although if the market value of our Class A common stock that is held by non-affiliates exceeds $700 million or more as of any June 30 before that time, we would cease to be an emerging growth company as of the following December 31.
We currently depend on one customer to generate all or substantially all of our revenue, which exposes us to the risk of nonperformance by such customer, whether contractual or otherwise. The nonperformance of our sole customer would have a material impact on our liquidity and ability to operate the business.
We currently are substantially dependent on our sole hosting services customer to generate most of our revenue, which exposes us to the risk of nonperformance by such customer, whether contractual or otherwise. The nonperformance of our hosting services customer would have a material impact on our liquidity and ability to operate the business.
If we conduct an equity offering, or exercise our right to sell shares of class A common stock to B. Riley under the ATM Agreement, to raise capital or to take advantage of strong capital markets, our stockholders may experience significant dilution of their ownership interests, and the per share value of our class A common stock could materially decline.
If we conduct an equity offering, to raise capital or to take advantage of strong capital markets, our stockholders may experience significant dilution of their ownership interests, and the per share value of our Class A common stock could materially decline.
In addition to the possible imposition of fines in the case of any such violations, we may be required to undertake significant capital investments and obtain additional operating permits or licenses, which could have a material adverse effect on us.
In addition to the possible imposition of fines in the case of any such violations, we may be required to undertake significant capital investments and obtain additional operating permits or licenses, which could have a material adverse effect on us. 34 We have material environmental liabilities, and costs of compliance with existing and new environmental laws could have a material adverse effect on us.
An increase in congestion and backlogs could result in longer transaction confirmation times, an increase in unconfirmed transactions (that is, transactions that have yet to be included in a block on a network and therefore are not yet completed transactions), higher transaction fees and an overall decrease in confidence in a particular network, which could ultimately affect our ability to transact on that particular network and, in turn, could have a material adverse effect on our business, financial condition and results of operations.
An increase in congestion and backlogs could result in longer transaction confirmation times, an increase in unconfirmed transactions (that is, transactions that have yet to be included in a block on a network and therefore are not yet completed transactions), higher transaction fees and an overall decrease in confidence in a particular network, which could ultimately affect our ability to transact on that particular network and, in turn, could have a material adverse effect on our business, financial condition, and results of operations. 39 The impact of geopolitical and economic events on the supply and demand for cryptoassets, including bitcoin, is uncertain.
We compete with other users and/or companies that are mining bitcoin or providing investors exposure to bitcoin without direct purchases of bitcoin and with other potential financial vehicles linked to cryptocurrency, including securities backed by or linked to bitcoin through entities similar to it.
We may be adversely affected by competition from other methods of investing in bitcoin. We compete with other users and/or companies that are mining bitcoin or providing investors exposure to bitcoin without direct purchases of bitcoin and with other potential financial vehicles linked to cryptocurrency, including securities backed by or linked to bitcoin through entities similar to it.
The digital asset exchanges on which cryptocurrencies, including bitcoin, trade are relatively new and largely unregulated, and thus may be exposed to fraud and failure. Such failures may result in a reduction in the price of bitcoin and other cryptocurrencies and can adversely affect an investment in us.
Such failures may result in a reduction in the price of bitcoin and other cryptocurrencies and can adversely affect an investment in us. Digital asset exchanges on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated.
The physical degradation of our miners will require us to replace miners that are no longer functional. Because we utilize many units of the same bitcoin miner models, if there is a model wide component malfunction whether in the hardware or the software that powers these miners, the percentage of offline miners could increase substantially, disrupting our operations.
Because we utilize many units of the same bitcoin miner models, if there is a model wide component malfunction whether in the hardware or the software that powers these miners, the percentage of offline miners could increase substantially, disrupting our operations.
If we are unable to successfully implement our development plan or to increase our generation of revenue, we will not become profitable, and we may be unable to continue our operations. Furthermore, our proposed operations are subject to all business risks associated with new enterprises.
We incurred net losses in 2023 and 2022. If we are unable to successfully implement our development plan or to increase our generation of revenue, we may not be profitable in the future, and we may be unable to continue our operations. Furthermore, our proposed operations are subject to all business risks associated with new enterprises.
Our current cryptocurrency datacenter operations in the Town of Torrey, New York and Spartanburg, South Carolina are, and any future cryptocurrency datacenter operations that we establish or host will be, subject to a variety of risks relating to physical condition and operation, including: • the presence of construction or repair defects or other structural or building damage; • any noncompliance with or liabilities under applicable environmental, health or safety regulations or requirements or building permit requirements; • any damage resulting from natural disasters, such as hurricanes, earthquakes, fires, floods and windstorms; • damage caused by criminal actors, such as cyberattacks, vandalism, sabotage or terrorist attacks; and 26 • claims by employees and others for injuries sustained at our properties.
Our current cryptocurrency datacenter operations in the Town of Torrey, New York are, and any future cryptocurrency datacenter operations that we establish or host will be, subject to a variety of risks relating to physical condition and operation, including: • the presence of construction or repair defects or other structural or building damage; • any noncompliance with or liabilities under applicable environmental, health or safety regulations or requirements or building permit requirements; • any damage resulting from natural disasters, such as hurricanes, earthquakes, fires, floods and windstorms; • damage caused by criminal actors, such as cyberattacks, vandalism, sabotage or terrorist attacks; and • claims by employees and others for injuries sustained at our properties. 29 Any of these could render our cryptocurrency datacenter, hosting and/or power generation operations inoperable, temporarily, or permanently, and the potential impact on our business is currently magnified because we operate the majority of our cryptocurrency datacenter operations from a single location.
Further, such securities could require us to accept terms that restrict our ability to incur additional indebtedness, take other actions including terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders.
Further, such securities could require us to accept terms that restrict our ability to incur additional indebtedness, take other actions including terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders. We cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings.
Our inability to identify and consummate acquisitions of attractive targets could have a material and adverse impact on our long-term growth prospects, which could materially adversely affect our results of operations, strategy and financial performance.
Our inability to identify and consummate acquisitions of attractive targets could have a material and adverse impact on our long-term growth prospects, which could materially adversely affect our results of operations, strategy, and financial performance. Failure to successfully integrate acquired businesses or assets could negatively impact our business, financial condition, and results of operations.
While the Company continues to work to implement the options to improve liquidity, there can be no assurance that these efforts will be successful.
While we continue to work to implement the options to improve liquidity, we can provide no assurance that these efforts will be successful.

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Item 2. Properties

Properties — owned and leased real estate

2 edited+4 added−1 removed4 unchanged
Biggest changeWe also hold a series of easements and right of way agreements with landowners through whose land the pipeline runs. We own two parcels of land containing approximately 175 acres of land located in Spartanburg, South Carolina.
Biggest changeWe also hold a series of easements and right of way agreements with landowners through whose land the pipeline runs. On November 9, 2023, we closed the sale of the South Carolina Facility to complete the deleveraging transaction with NYDIG.
Approximately 29 acres are occupied by a landfill used to dispose of coal ash by the power plant’s former owners. 44 We own the 4.6 mile long natural gas pipeline that runs from our power plant facility, to the connector pipeline in Milo, Yates County, New York.
Approximately 29 acres are occupied by a landfill used to dispose of coal ash by the power plant’s former owners. We own the 4.6-mile-long natural gas pipeline that runs from our power plant facility, to the connector pipeline in Milo, Yates County, New York.
Removed
The property included 750,000 square feet of industrial buildings, a significant portion of which is in the process of being dismantled and sold for scrap metal. We commenced mining operations at the South Carolina Facility in December 2021. We lease office space in Fairfield, Connecticut.
Added
We are evaluating future uses of the remaining real estate assets in South Carolina, which include approximately 153 acres of land and the original building, which was classified as construction in process and was not used in cryptocurrency mining.
Added
On March 6, 2024, we agreed to purchase a parcel of land containing approximately 12 acres located in Columbus, Mississippi, including over 73,000 square feet of industrial warehouse space.
Added
This property will provide us with access to 32.5 MW in additional power capacity and we intend to deploy 7 MW of miners on the Columbus Property in the second quarter of 2024. We expect the transaction to close in April 2024 and intend to deploy 7 MW of miners on the property in the second quarter of 2024.
Added
We have also deployed additional miners in conjunction with a 7.5 MW mining capacity lease in North Dakota, which has a term of five years and provides us with energy to power mining at a cost of $58.50/MWh. We lease office space in Fairfield, Connecticut.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed1 unchanged
Biggest changeOther than set forth in Note 11 " Commitments and Contingencies" in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference, we are currently not aware of any such legal proceedings or claims that we believe will have an adverse effect on our business, financial condition or operating results.
Biggest changeOther than as set forth in Note 10, " Commitments and Contingencies" in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report, which is incorporated herein by reference, we are currently not aware of any such legal proceedings or claims that we believe will have an adverse effect on our business, financial condition, or operating results. 51 ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 45 PART II
MINE SAFETY DISCLOSURES. Not applicable. 52 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRiley uses commercially reasonable efforts to sell, on Greenidge’s behalf, shares of Greenidge’s class A common stock requested to be sold by Greenidge, consistent with B. Riley’s normal trading and sales practices, under the terms and subject to the conditions set forth in the ATM Agreement.
Biggest changeUnder the ATM Agreement, BRS agreed to use its commercially reasonable efforts to sell on our behalf shares of our Class A common stock we request to be sold from time to time, consistent with BRS’s normal trading and sales practices, under the terms and subject to the conditions set forth in the ATM Agreement.
Pursuant to the registration statement filed registering shares to be sold in accordance with the terms of the ATM Agreement, Greenidge may offer and sell shares of its class A common stock up to a maximum aggregate offering price of $22,800,000.
Pursuant to the registration statement filed registering shares to be sold in accordance with the terms of the ATM Agreement, we may offer and sell shares of our Class A common stock up to a maximum aggregate offering price of $22,800,000.
Riley Principal Capital ("BRPC"), pursuant to which we have the right to sell to BRPC up to $500 million in shares of class A common stock, subject to certain limitations and the satisfaction of specified conditions in the Equity Purchase Agreement, from time to time over the 24-month period commencing on April 28, 2022.
Pursuant to the Equity Purchase Agreement, we have the right to sell to BRPC up to $500 million in shares of our Class A common stock, subject to certain limitations and the satisfaction of specified conditions in the Equity Purchase Agreement, from time to time over the 24-month period commencing on April 28, 2022.
Holders of Record As of December 31, 2022, we had 26 registered holders of our class A common stock, including Cede & Co., the nominee for the Depository Trust Company and 10 registered holders of our class B common shares.
Holders of Record As of December 31, 2023, we had 34 registered holders of our Class A common stock, including Cede & Co., the nominee for the Depository Trust Company and 10 registered holders of our Class B common stock.
Greenidge has the discretion, subject to market demand, to vary the timing, prices and number of shares sold in accordance with the ATM Agreement. B. Riley may sell shares of the Company’s class A common stock by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) promulgated under the Securities Act.
We have the discretion, subject to market demand, to vary the timing, prices and number of shares sold in accordance with the ATM Agreement. BRS may sell our Class A common stock by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) promulgated under the Securities Act.
Greenidge will pay B. Riley commissions for its services in acting as sales agent, in an amount equal to up to 5.0% of the gross proceeds of all class A common stock sold by B. Riley as sales agent under the ATM Agreement.
We pay BRS commissions for its services in acting as sales agent, in an amount to up to 5.0% of the gross proceeds of all Class A common stock sold through it as sales agent under the ATM Agreement.
As of December 31, 2022, there were 17,726,407 shares of Greenidge class A common stock issued and outstanding. Our class B common stock is not listed or traded on any stock exchange.
As of December 31, 2023, 6,278,613 shares of Greenidge Class A common stock were issued and outstanding. Our Class B common stock is not listed or traded on any stock exchange.
The declaration of dividends, if any, will be subject to the discretion of our board, which may consider such factors as our results of operations, financial condition, capital needs and acquisition strategy, among others.
The declaration of dividends, if any, will be subject to the discretion of our board, which may consider such factors as our results of operations, financial condition, capital needs and acquisition strategy, among others. Recent Sales of Unregistered Securities and Use of Proceeds Equity Purchase Agreement with B. Riley Principal Capital, LLC .
From April 28, 2022 to March 30, 2023, we issued 1,599,229 shares of our class A common stock to BRPC under the Equity Purchase Agreement. The sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act.
Sales of shares of our Class A common stock to BRPC under the Equity Purchase Agreement are deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act.
Removed
Under the Amended and Restated Bridge Promissory Note entered into in August 2022 (the "Promissory Note") that matures on November 20, 2023, the Company cannot pay dividends. Securities Authorized for Issuance under Equity Compensation Plans Information about the securities authorized for issuance under our equity compensation plan is set forth under "Item 12.
Added
On September 15, 2021, we entered into an Equity Purchase Agreement with B. Riley Principal, LLC ("BRPC"), which was amended on April 7, 2022 (as so amended, the "Equity Purchase Agreement").
Removed
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation Plan Information." Recent Sales of Unregistered Securities and Use of Proceeds On April 7, 2022, we entered into a common stock purchase agreement, as amended by Amendment No. 1 to Common Stock Purchase Agreement dated as of April 13, 2022 (as amended, the "Equity Purchase Agreement") with B.
Added
In connection with the Equity Purchase Agreement, we entered into a registration rights agreement with BRPC, pursuant to which filed a registration statement registering the resale by BRPC of up to 572,095 shares of Class A common stock issued and sold from time to time under the Equity Purchase Agreement.
Removed
The recipients of the securities in each of these transactions represented their intentions and appropriate legends were placed upon the stock certificates issued in these transactions. On September 19, 2022, Greenidge entered into the ATM Agreement with B. Riley and Northland. Under the ATM Agreement, B.
Added
The registration statement became effective on April 28, 2022 (the "Effective Date").
Removed
Under the terms of the Promissory Note Amendment (as defined below), Greenidge is required to make mandatory monthly debt repayments under the Promissory Note of 15% of the net proceeds of sales of equity, including sales under the ATM Agreement and the Equity Purchase Agreement.
Added
From the Effective Date to the date of this Annual Report, we issued 409,923 shares of Class A common stock to BRPC pursuant to the Equity Purchase Agreement for aggregate proceeds of $7.0 million, net of discounts, of which 250,000 and 94,093 shares of Class A common stock were issued in 2023 for proceeds of $2.0 million, net of discounts, and a subscription receivable of $0.7 million, respectively.
Removed
See " Management’s Discussion and Analysis of Financial Condition And Results of Operations 46 Management’s Discussion And Analysis of Financial Condition and Results of Operations For Greenidge—Recent Transactions— B. Riley Promissory Note" for further details. From October 1, 2022 through March 30, 2023, Greenidge issued 16,334,133 shares which included 1,333,333 shares issued to B.
Added
At Market Issuance Sales Agreement with B. Riley Securities, Inc. and Northland Securities, Inc. On September 19, 2022, we entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc. ("BRS") and Northland Securities Inc., which was amended on October 3, 2022 (as so amended, the "ATM Agreement").
Removed
Riley Commercial Capital, LLC (the "Noteholder") on February 1, 2023, as an amendment fee for an amendment to Greenidge's Promissory Note in favor of the Noteholder. See Note 7, " Stockholder's Equity ", in the Notes to Consolidated Financial Statements for further details.
Added
From October 1, 2022 through December 31, 2023, we issued 4,167,463 shares under the ATM Agreement for net proceeds of $20.7 million, of which 3,879,309 shares were issued for net proceeds of $18.7 million for the year ended December 31, 2023.
Removed
The sales made pursuant to the ATM Agreement were made pursuant to a registration statement filed with the SEC. ITEM 6. RESERVED
Added
The number of shares issued includes the issuance, in February 2023, of 133,333 shares to BRS as 53 payment of a $1.0 million amendment fee on the Amended and Restated Bridge Promissory Note, dated August 10, 2022, in favor of B. Riley Commercial Capital, LLC. Vendor Payment.
Added
In May 2023, Greenidge issued 54,348 unregistered shares of its Class A common stock to a vendor as payment for services provided. Infinite Reality, Inc. Equity Exchange Agreement. On December 11, 2023, we entered into an Equity Exchange Agreement (the “Equity Exchange Agreement”) with Infinite Reality, Inc.
Added
(“Infinite Reality”), pursuant to which, among other things, (i) we issued to Infinite Reality a one-year warrant to purchase 180,000 shares of our Class A common stock at an exercise price of $7.00 per share (the “1-Year Warrant”), the proceeds of which, upon exercise, are required to be used for the development of a proposed new data center contemplated by a Master Services Agreement entered into between us and Infinite Reality on December 11, 2023, and (ii) we issued 180,000 shares of our Class A common stock to Infinite Reality, which shares will not be registered with the SEC.
Added
The shares of Class A common stock issued under the Equity Exchange Agreement and that may be issued pursuant to the exercise of the 1-Year Warrant were offered and sold in a transaction exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act.
Added
Infinite Reality represented to us in the Equity Exchange Agreement and in the 1-Year Warrant that it is an “accredited investor,” as defined in Rule 501(a) of Regulation D under the Securities Act and was acquiring such shares for investment purposes only and not with a view towards the public sale or distribution thereof in violation of applicable U.S. federal securities laws or applicable state securities laws.
Added
In exchange for issuing the 1-Year Warrant and Class A common stock, we received (i) a one-year warrant to purchase 235,754 shares of Infinite Reality's common stock at an exercise price of $5.35 per share (the "Infinite Reality Warrant") and (ii) 280,374 shares of Infinite Reality's common stock.
Added
The Infinite Reality Warrant will automatically exercise on a net settlement basis immediately prior to expiration unless written notice is provided by the Company to Infinite Reality. Armistice Capital Master Fund Ltd. Securities Purchase Agreement. On February 12, 2024, we entered into a securities purchase agreement (the “Armistice SPA”) with Armistice Capital Master Fund Ltd. (“Armistice”).
Added
Pursuant to the Armistice SPA, Armistice purchased (i) 450,300 shares of our Class A common stock (the “SPA Shares”), and (ii) a pre-funded warrant (the “Pre-Funded Warrant”) to purchase 810,205 shares of our Class A common stock (the “Pre-Funded Warrant Shares”).
Added
The per share purchase price of the SPA Shares and the Pre-Funded Warrant Shares was $4.76, resulting in aggregate gross proceeds of $6.0 million, and after giving effect to the exercise price of $0.0001 per Pre-Funded Warrant Share, we received net proceeds of $6.0 million.
Added
In addition, we issued to Armistice a five-year warrant (the “5-Year Warrant”) to purchase up to 1,260,505 shares of Class A common stock, exercisable commencing on August 14, 2024 at an exercise price of $5.25 per share (the “Warrant Shares”).
Added
Pursuant to the Armistice SPA, we are obligated to file a resale registration statement covering the SPA Shares, the Pre-Funded Warrant Shares, and the Warrant Shares no later than ten (10) days after filing this Annual Report.
Added
The SPA Shares and the shares of Class A common stock issuable pursuant to the Pre-Funded Warrant and the 5-Year Warrant were offered and sold in a transaction exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act.
Added
Armistice represented to the us in the SPA that it is an “accredited investor,” as defined in Rule 501(a) of Regulation D under the Securities Act. ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

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

83 edited+104 added−69 removed25 unchanged
Biggest changeThe reported amounts in the table below are from our Consolidated Statements of Operations in our Consolidated Financial Statements included in this Annual Report on Form 10-K. 55 Years Ended December 31, Variance 2022 2021 $ % Adjusted operating income (loss) from continuing operations Operating (loss) income from continuing operations $ (233,163) $ 32,784 $ (265,947) (811) % Impairment of long-lived assets 176,307 — 176,307 N/A Remeasurement of environmental liability 16,694 3,688 13,006 353 % Expansion costs 2,315 2,362 (47) (2) % Restructuring 729 — 729 N/A Gain on sale of assets (1,780) — (1,780) N/A Adjusted operating (loss) income from continuing operations $ (38,898) $ 38,834 $ (77,732) (200) % Adjusted operating margin (43.2 %) 39.9 % Adjusted net (loss) income from continuing operations Net (loss) income from continuing operations $ (269,741) $ 21,600 $ (291,341) (1349) % Impairment of long-lived assets, after tax 176,307 — 176,307 N/A Remeasurement of environmental liability, after tax 16,694 2,703 13,991 518 % Expansion costs, after tax 2,315 1,731 584 34 % Restructuring, after tax 729 — 729 N/A Gain on sale of assets, after tax (1,780) — (1,780) N/A Tax charge for valuation allowance 15,055 — 15,055 N/A Adjusted net (loss) income from continuing operations $ (60,421) $ 26,034 $ (86,455) (332) % EBITDA (loss) and Adjusted EBITDA (loss) from continuing operations Net (loss) income from continuing operations $ (269,741) $ 21,600 $ (291,341) (1349) % Provision for income taxes 15,002 7,901 7,101 90 % Interest expense, net 21,575 3,711 17,864 481 % Depreciation and amortization 35,136 8,474 26,662 315 % EBITDA (loss) from continuing operations (198,028) 41,686 (239,714) (575) % Stock-based compensation 2,636 3,770 (1,134) (30) % Impairment of long-lived assets 176,307 — 176,307 N/A Remeasurement of environmental liability 16,694 3,688 13,006 353 % Expansion costs 2,315 2,362 (47) (2) % Restructuring 729 — 729 N/A Gain on sale of assets (1,780) — (1,780) N/A Adjusted EBITDA (loss) from continuing operations $ (1,127) $ 51,506 $ (52,633) (102) % Cryptocurrency datacenter revenue per MWh and power and capacity revenue per MWh are used by management to consider the extent to which we may generate electricity to either produce cryptocurrency or sell power to the New York wholesale power market.
Biggest changeThe reported amounts in the table below are from our Consolidated Statements of Operations and Comprehensive Loss in our Consolidated Financial Statements included in this Annual Report. 65 Years Ended December 31, Variance 2023 2022 $ % Adjusted operating loss from continuing operations Operating loss from continuing operations $ (16,892) $ (233,163) $ 216,271 (93) % Impairment of long-lived assets 4,000 176,307 (172,307) N/A Remeasurement of environmental liability 2,409 16,694 (14,285) (86) % Expansion costs — 2,315 (2,315) (100) % Restructuring 4,081 729 3,352 N/A Gain on sale of assets (9,903) (1,780) (8,123) N/A Adjusted operating loss from continuing operations $ (16,305) $ (38,898) $ 22,593 (58) % Adjusted operating margin (23.2 %) (43.2 %) Adjusted net loss from continuing operations Net loss from continuing operations $ (29,039) $ (269,741) $ 240,702 (89) % Impairment of long-lived assets 4,000 176,307 (172,307) N/A Remeasurement of environmental liability 2,409 16,694 (14,285) (86) % Expansion costs — 2,315 (2,315) (100) % Restructuring 4,081 729 3,352 N/A Gain on sale of assets (9,903) (1,780) (8,123) N/A Tax charge for valuation allowance — 15,055 (15,055) N/A Adjusted net loss from continuing operations $ (28,452) $ (60,421) $ 31,969 (53) % EBITDA and Adjusted EBITDA (loss) from continuing operations Net loss from continuing operations $ (29,039) $ (269,741) $ 240,702 (89) % Provision for income taxes — 15,002 (15,002) (100) % Interest expense, net 12,659 21,575 (8,916) (41) % Depreciation and amortization 13,602 35,136 (21,534) (61) % EBITDA from continuing operations (2,778) (198,028) 195,250 (99) % Stock-based compensation 2,344 2,636 (292) (11) % Impairment of long-lived assets 4,000 176,307 (172,307) N/A Remeasurement of environmental liability 2,409 16,694 (14,285) (86) % Expansion costs — 2,315 (2,315) (100) % Restructuring 4,081 729 3,352 N/A Gain on sale of assets (9,903) (1,780) (8,123) N/A Adjusted EBITDA (loss) from continuing operations $ 153 $ (1,127) $ 1,280 (114) % 66 Liquidity and Capital Resources On December 31, 2023, we had cash and cash equivalents of $13.3 million.
Recent Accounting Pronouncements Information regarding new accounting pronouncements is included in Note 2, " Significant Accounting Policies ", in the Notes to the Consolidated Financial Statements.
Recent Accounting Pronouncements Information regarding new accounting pronouncements is included in Note 2, " Significant Accounting Policies ", in the Notes to Consolidated Financial Statements.
We procure the majority of our natural gas at spot prices and enter into fixed price forward contracts from time to time for the purchase of a portion of anticipated natural gas purchases based on prevailing market conditions to partially mitigate the financial impacts of natural gas price volatility and to manage commodity risk.
We procure the majority of our natural gas at spot prices and enter into fixed price forward contracts from time to time for the purchase of a portion of anticipated natural 55 gas purchases based on prevailing market conditions to partially mitigate the financial impacts of natural gas price volatility and to manage commodity risk.
During 2023, we determined that triggering events had occurred as of June 30, 2022 and December 31, 2022 due to the negative impact on our cash flows resulting from the significant market declines in the price of bitcoin and increases in natural gas and energy costs during those periods.
During 2022, we determined that triggering events had occurred as of June 30, 2022 and December 31, 2022 due to the negative impact on our cash flows resulting from the significant market declines in the price of bitcoin and increases in natural gas and energy costs during those periods.
Additional adjustments to the environment liability may occur periodically due to potential changes in remediation requirements regarding coal combustion residuals which may lead to material changes in estimates and assumptions. Summary of Cash Flow The following table provides information about our net cash flow for the years ended December 31, 2022 and 2021.
Additional adjustments to the environment liability may occur periodically due to potential changes in remediation requirements regarding coal combustion residuals which may lead to material changes in estimates and assumptions. Summary of Cash Flow The following table provides information about our net cash flow for the years ended December 31, 2023 and 2022.
As of December 31, 2022, we have recognized environmental liabilities for a coal ash pond and landfill which were inherited due to the legacy coal operations at the Company's property in the Town of Torrey, New York. These costs are considered to be both probable and estimable.
As of December 31, 2023 we have recognized environmental liabilities for a coal ash pond and landfill which were inherited due to the legacy coal operations at the Company's property in the Town of Torrey, New York. These costs are considered to be both probable and estimable.
At the effective time of the Merger, we issued 2,960,731 shares of class A common stock in exchange for all shares of common stock, par value $0.0001, of Support.com and all outstanding stock option and restricted stock units of Support.com. Support.com’s results of operations and balance sheet have been consolidated effective with the Merger.
At the effective time of the Merger, we issued 2,960,731 shares of Class A common stock in exchange for all shares of common stock, par value $0.0001, of Support.com and all outstanding stock options and restricted stock units of Support.com. Support.com’s results of operations and balance sheet have been consolidated effective with the Merger.
Critical Accounting Policies and Estimates Our significant accounting policies are discussed in detail in Note 2, "Significant Accounting Policies", in the Notes to Consolidated Financial Statements for the year ended December 31, 2022 however we consider our critical accounting policies to be those related to revenue recognition, valuation of long-lived assets and environmental obligations.
Critical Accounting Policies and Estimates Our significant accounting policies are discussed in detail in Note 2, "Significant Accounting Policies", in the Notes to Consolidated Financial Statements for the year ended December 31, 2023; however, we consider our critical accounting policies to be those related to revenue recognition, valuation of long-lived assets and environmental obligations.
Cryptocurrency datacenter revenue is variable and depends on several factors including but not limited to the price of cryptocurrency, our proportion of global hash rate, transaction volume and the prevailing rewards payouts per new block added to the bitcoin blockchain.
Cryptocurrency mining revenue is variable and depends on several factors, including but not limited to the price of cryptocurrency, our proportion of global hash rate, transaction volume, and the prevailing rewards payouts per new block added to the bitcoin blockchain.
Off-Balance Sheet Arrangements As of December 31, 2022, we did not have any off balance sheet arrangements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for smaller reporting companies.
Off-Balance Sheet Arrangements As of December 31, 2023, we did not have any off balance sheet arrangements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for smaller reporting companies.
Cost of revenue (excluding depreciation and amortization) per MWh represents a measure of the cost of natural gas, emissions credits, payroll and benefits and other direct production costs associated with the MWhs produced to generate the respective revenue category for each MWh utilized.
Cost of revenue (excluding depreciation) per MWh represents a measure of the cost of natural gas, emissions credits, payroll and benefits and other direct production costs associated with the MWh's produced to generate the respective revenue category for each MWh utilized.
The terms of such arrangements require NYDIG affiliates to pay a hosting fee that covers the cost of power and direct costs associated with management of the mining facilities, a hosting fee, as well as a gross profit-sharing arrangement.
The terms of the NYDIG Hosting Agreement require NYDIG affiliates to pay a hosting fee that covers the cost of power and direct costs associated with management of the mining facilities as well as a gross profit-sharing arrangement.
Management believes that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors.
Management believes that the use of Adjusted operating loss from continuing operations, Adjusted net loss from continuing operations, EBITDA from continuing operations and Adjusted EBITDA from continuing operations provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors.
On an adjusted basis, excluding the after-tax impact of the impairment of long-lived assets, the remeasurement of environmental liabilities and the tax charge for the recognition of a valuation allowance on deferred tax assets, adjusted net (loss) income from continuing operations during 2022 would have been $(60.4) million as compared to $26.0 million in the same period in 2021.
On an adjusted basis, excluding the after-tax impact of the impairment of long-lived assets, the remeasurement of environmental liabilities and the tax charge for the recognition of a valuation allowance on deferred tax assets, adjusted net loss from continuing operations during 2023 would have been $28.5 million as compared to $60.4 million in the same period in 2022.
Adjusted operating loss from continuing operations was $38.9 million for the year ended December 31, 2022, compared to adjusted income from continuing operations of $38.8 million for same period in 2021. Adjusted income from continuing operations is a non-GAAP performance measure.
Adjusted operating loss from continuing operations was $16.3 million for the year ended December 31, 2023, compared to adjusted loss from continuing operations of $38.9 million for same period in 2022. Adjusted income from continuing operations is a non-GAAP performance measure.
Investing Activities Net cash used for investing activities from continuing operations was $121.4 million for the year ended December 31, 2022, as compared to $163.6 million for the year ended December 31, 2021.
Investing Activities Net cash used for investing activities from continuing operations was $6.0 million for the year ended December 31, 2023, as compared to $121.4 million for the year ended December 31, 2022.
As a result of many factors, such as those set forth under "Item 1A—Risk Factors," "Cautionary Statement Regarding Forward-Looking Statements" and elsewhere in this Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward‑looking statements.
As a result of many factors, such as those set forth under "Risk Factors," "Cautionary Statement Regarding Forward-Looking Statements" and elsewhere in this Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements.
Loss from discontinued operations, net of tax was $1.3 million for the year ended December 31, 2022, as compared to a loss of $66.1 million for the year ended December 31, 2021.
Loss from discontinued operations, net of tax was $0.5 million for the year ended December 31, 2023, as compared to a loss of $1.3 million for the year ended December 31, 2022.
For the year ended December 31, 2022, based on our existing fleet, we generated bitcoin revenue at an average rate of approximately $144/MWh. We converted the cryptocurrency we received to cash on a daily basis using third-party platforms and are subject to the platforms' user agreements.
For the year ended December 31, 2023, based on our existing fleet, we generated cryptocurrency mining revenue at an average rate of approximately $104/MWh for our owned miners. We converted the cryptocurrency we received from cryptocurrency mining to cash on a daily basis using third-party platforms and are subject to the platforms' user agreements.
A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliations" section of this MD&A.
Adjusted net loss is a non-GAAP performance measure. A reconciliation of reported amounts to adjusted amounts can be found in the " Non-GAAP Measures and Reconciliations " section of this MD&A.
Depreciation and amortization costs are excluded from the cost of revenue (exclusive of depreciation and amortization) per MWh metric; therefore, not all cost of revenues for cryptocurrency datacenter and power and capacity are fully reflected.
Depreciation expense is excluded from the cost of revenue (exclusive of depreciation) per MWh metric; therefore, not all cost of revenues for datacenter hosting, cryptocurrency mining and power and capacity are fully reflected.
While the Company continues to work to implement options to improve liquidity, there can be no assurance that these efforts will be successful and the Company's liquidity could be negatively impacted by items outside of its control, in particular, significant decreases in the price of bitcoin, regulatory changes concerning cryptocurrency, increases in energy costs or other macroeconomic conditions and other matters identified in "Risk Factors" .
While the Company continues to work to implement options to improve liquidity, we can provide no assurance that these efforts will be successful and our liquidity could be negatively impacted by factors outside of our control, in particular, significant decreases in the price of bitcoin, regulatory changes concerning cryptocurrency, increases in energy costs or other macroeconomic conditions and other matters identified in Item 1A, " Risk Factors " in this Annual Report.
For so long as we are an emerging growth company, we will not be required to: • have an auditor report on our internal controls over financial reporting pursuant to Section404(b) of the Sarbanes-Oxley Act; • comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); • submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay," "say-on-frequency" and pay ratio; and • disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. 61 In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
For so long as we are an emerging growth company, we will not be required to: • have an auditor report on our internal controls over financial reporting pursuant to Section404(b) of the Sarbanes-Oxley Act; • comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); • submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay," "say-on-frequency" and pay ratio; and • disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.
During 2022, the Company sold miners and coupons and credits redeemable to a manufacturer of bitcoin miners for proceeds of $11.1 million. 59 Financing Activities Net cash provided by financing activities from continuing operations was $62.1 million for the year ended December 31, 2022, as compared to $174.1 million for the year ended December 31, 2021.
During 2023, the Company sold miners and coupons and credits redeemable to a manufacturer of bitcoin miners for proceeds of $7.0 million. 69 Financing Activities Net cash provided by financing activities from continuing operations was $13.8 million for the year ended December 31, 2023, as compared to $62.1 million for the year ended December 31, 2022.
Operating (loss) income from continuing operations As a result of the factors described above, operating (loss) income from continuing operations was $(233.2) million for the year ended December 31, 2022 as compared to $32.8 million for the year ended December 31, 2021.
Operating loss from continuing operations As a result of the factors described above, operating loss from continuing operations was $16.9 million for the year ended December 31, 2023 as compared to $233.2 million for the year ended December 31, 2022.
A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliations" section of this management discussion and analysis ("MD&A"). 51 Key Metrics The following table provides a summary of key metrics related to the years ended December 31, 2022 and 2021.
A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliations" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"). 59 Key Metrics The following table provides a summary of key metrics related to the years ended December 31, 2023 and 2022.
For the year ended December 31, 2022, purchases of and deposits for property and equipment were $133.0 million in 2022 as compared to $163.6 million in 2021, as the Company was expanding its mining fleet over both years.
For the year ended December 31, 2023, purchases of and deposits for property and equipment were $13.0 million in 2023 as compared to $133.0 million in 2022, as the Company was expanding its mining fleet in 2022.
The New York Facility is a vertically integrated cryptocurrency datacenter and power generation facility with an approximately 106 megawatt ("MW") nameplate capacity, natural gas power generation facility.
We own cryptocurrency datacenter operations in the Town of Torrey, New York (the "New York Facility"). The New York Facility is a vertically integrated cryptocurrency datacenter and power generation facility with an approximately 106 -megawatt ("MW") nameplate capacity, natural gas power generation facility.
The charge consisted of a $14.8 million increase to the coal ash pond liability at our New York facility due to a change in the planned approach as a result of new regulations and new information that became available regarding the site, as well as due to inflationary increases due to higher projected construction costs.
The charge for the year ended December 31, 2022 consisted of a $14.8 million increase to the coal ash pond liability due to a change in the planned approach as a result of new regulations and new information that became available regarding the site, as well as due to inflationary increases due to high projected construction costs.
Net (Loss) Income from Continuing Operations As a result of the factors described above, net (loss) income from continuing operations increased to $(269.7) million for the year ended December 31, 2022 as compared to $21.6 million for the year ended December 31, 2021.
Net Loss from Continuing Operations As a result of the factors described above, net loss from continuing operations decreased to $29.0 million for the year ended December 31, 2023 as compared to $269.7 million for the year ended December 31, 2022.
We have classified the Support.com business as held for sale and discontinued operations in these consolidated financial statements as a result of a strategic shift to strictly focus on our cryptocurrency datacenter and power generation operations.
We have classified the Support.com business as held for sale and discontinued operations in the consolidated financial statements as a result of a strategic shift to strictly focus on our cryptocurrency datacenter and power generation operations. In January 2023, Greenidge completed the sale of a portion of the assets of Support.com for net proceeds of approximately $2.6 million.
Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, U.S. GAAP.
Adjusted operating loss from continuing operations, Adjusted net loss from continuing operations, EBITDA from continuing operations and Adjusted EBITDA are intended as supplemental measure of our performance that is neither required by, nor presented in accordance with, U.S. GAAP.
The carrying value exceeded the fair value of the asset group and impairment loss was recorded for the difference in the carrying value and fair value. The Company recognized a noncash impairment charge of $176.3 million for the year ended December 31, 2022. Environmental Liability We recognize environmental liabilities in accordance with ASC 410-30, Asset Retirement and Environmental Obligations.
The carrying value exceeded the fair value of the asset group and impairment loss was recorded for the difference in the carrying value and fair value. The Company recognized a noncash impairment charge of $176.3 million for the year ended December 31, 2022.
Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. • We will remain an "emerging growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1.235 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our class A common stock that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
We will remain an “emerging growth company” for up to five years from our first sale of common stock pursuant to an effective Securities Act registration statement in 2021, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1.235 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Class A common stock held by non- 72 affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
This allows us to participate in the upside as bitcoin prices rise, but reduces our downside risk of bitcoin price deterioration and cost increases related to natural gas.
This allows us to participate in the upside should bitcoin prices rise, but reduces our downside risk of bitcoin price deterioration and cost increases related to natural gas. Additionally, we entered into the Promissory Note Amendment with B.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR GREENIDGE You should read the following discussion of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included herein.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included herein. Among other things, those financial statements include more detailed information regarding the basis of presentation for the following information.
In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.
In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
Overview Mining Operations During the year ended December 31, 2022 and through the signing of the Hosting Agreements on January 30, 2023, our cryptocurrency datacenter operations generated revenue in the form of bitcoin by earning bitcoin as rewards and transaction fees for supporting the global bitcoin network with application-specific integrated circuit computers ("ASICs" or "miners") owned or leased by us.
You should carefully review the sections titled "Cautionary Statement Regarding Forward-Looking Statements" and "Risk Factors" in this Annual Report. 54 Overview Mining Operations During the year ended December 31, 2022 and through the signing of the NYDIG Hosting Agreement on January 30, 2023, our cryptocurrency datacenter operations generated revenue in the form of bitcoin as rewards and transaction fees for supporting the global bitcoin network with application-specific integrated circuit computers ("ASICs" or "miners") owned or leased by us.
Years Ended December 31, $ in thousands 2022 2021 Net cash (used for) provided by operating activities from continuing operations $ (14,485) $ 45,256 Net cash used for investing activities from continuing operations (121,354) (163,571) Net cash provided by financing activities from continuing operations 62,137 174,065 Increase in cash and cash equivalents from discontinued operations 6,320 21,797 Net change in cash and cash equivalents (67,382) 77,547 Cash and cash equivalents at beginning of year 82,599 5,052 Cash and cash equivalents at end of period $ 15,217 $ 82,599 Operating Activities Net cash used for operating activities from continuing operations was $14.5 million for the year ended December 31, 2022, as compared to cash provided by operating activities from continuing operations of $45.3 million for the year ended December 31, 2021.
Years Ended December 31, $ in thousands 2023 2022 Net cash used by operating activities from continuing operations $ (12,155) $ (14,485) Net cash used for investing activities from continuing operations (6,031) (121,354) Net cash provided by financing activities from continuing operations 13,772 62,137 Increase in cash and cash equivalents from discontinued operations 2,509 6,320 Net change in cash and cash equivalents (1,905) (67,382) Cash and cash equivalents at beginning of year 15,217 82,599 Cash and cash equivalents at end of period $ 13,312 $ 15,217 Operating Activities Net cash used for operating activities from continuing operations was $12.2 million for the year ended December 31, 2023, as compared to cash used for operating activities from continuing operations of $14.5 million for the year ended December 31, 2022.
Given this uncertainty regarding the Company's financial condition over the next 12 months, the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a reasonable period of time.
Given this uncertainty regarding our financial condition over the next 12 months from the date these financial statements were issued, we have concluded that there is substantial doubt about our ability to continue as a going concern for a 68 reasonable period of time.
The contract for Support.com's largest customer was not renewed upon expiration on December 31, 2022. As a result of this material change in the business, management and the Board of Directors made the determination to consider various alternatives for Support.com, including the disposition of assets.
As a result of this material change in the business, management and the Board of Directors made the determination to consider various alternatives for Support.com, including the disposition of assets.
Non-GAAP Measures and Reconciliations The following non-GAAP measures are intended to supplement investors’ understanding of our financial information by providing measures which investors, financial analysts and management use to help evaluate our operating performance.
See Note 3, " Discontinued Operations ", in the Notes to Consolidated Financial Statements for a further breakdown. 64 Non-GAAP Measures and Reconciliations The following non-GAAP measures are intended to supplement investors’ understanding of our financial information by providing measures which investors, financial analysts, and management use to help evaluate our operating performance.
Among other things, those financial statements include more detailed information regarding the basis of presentation for the following information. The financial statements have been prepared in accordance with accounting principals generally accepeted in the United States of America ("U.S. GAAP") and are presented in U.S. dollars. The following discussion contains forward‑looking statements that involve risks and uncertainties.
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and are presented in U.S. dollars. The following discussion contains forward-looking statements that involve risks and uncertainties.
In exchange for providing computing power, Greenidge is entitled to a theoretical fractional share of the cryptocurrency award the mining pool operator receives less digital asset transaction fees to the mining pool operator.
In exchange for performing hash computations, Greenidge is entitled to a fractional share of the cryptocurrency award the mining pool operator theoretically receives less the mining pool fees.
A reconciliation of reported amounts to adjusted amounts can be found in the " Non-GAAP Measures and Reconciliations " section of this MD&A. 54 Loss from Discontinued Operations In conjunction with the Company's decision to pursue alternatives, including a sale of Support.com, we have reported the Support.com business as discontinued operations in the consolidated financial statements.
Loss from Discontinued Operations In conjunction with the Company's decision to pursue alternatives, including a sale of Support.com, we have reported the Support.com business as discontinued operations in the consolidated financial statements.
Incidental contract costs that are not material in the context of the delivery of goods and services are recognized as expense. There is no significant financing component in these transactions.
Sales tax, value-added tax, and other taxes Greenidge collects concurrent with revenue-producing activities are excluded from revenue. Incidental contract costs that are not material in the context of the delivery of goods and services are recognized as expense. There is no significant financing component in these transactions.
Selling, general and administrative expenses Selling, general and administrative expenses increased $13.0 million, or 54%, to $36.9 million during the year ended December 31, 2022 as compared to the prior year period.
Selling, general and administrative expenses Selling, general and administrative expenses decreased $9.1 million, or 26%, to $26.2 million during the year ended December 31, 2023 as compared to the prior year period.
However, you should be aware that when evaluating EBITDA and Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items.
In addition, our presentation of these measures should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items.
The remaining $1.9 million of the charge was associated with an update in the cost estimates associated with our landfill primarily due to inflation driven increases to the remediation cost estimates. See Note 11, " Commitments and Contingencies " in the Notes to Consolidated Financial Statements under the " Environmental Liabilities" section for further details.
The remaining $1.9 million of the charge was associated with an update in the cost estimates associated with our landfill primarily due to inflation driven increases to the remediation cost estimates.
At the South Carolina Facility, we purchase power from a supplier of approximately 60% zero-carbon sourced energy, which results in relatively stable energy cost environment. We believe our competitive advantages include relatively low fixed costs, efficiently designed mining infrastructure and in-house operational expertise that we believe is capable of maintaining a higher operational uptime of miners.
We believe our competitive advantages include relatively low power costs, efficiently designed mining infrastructure, and in-house operational expertise that we believe is capable of maintaining a higher operational uptime of miners.
We opportunistically increase or decrease the total amount of electricity sold by the power plant based on prevailing prices in the wholesale electricity market.
We opportunistically increase or decrease the total amount of electricity sold by the power plant based on prevailing prices in the wholesale electricity market. Discontinued Operations On September 14, 2021, we consummated the transactions contemplated by the Merger Agreement, by and among Greenidge, Support.com and Merger Sub.
As of December 31, 2022, we powered approximately 76 MW of mining capacity capable of producing an estimated aggregate hash rate of 2.4 EH/s at our facilities, substantially all of which is dedicated to bitcoin mining.
As of December 31, 2023, we powered approximately 60 MW of mining capacity capable of producing an estimated aggregate hash rate of 2.1 EH/s at our New York Facility.
We have recorded a total environmental liability of $28.0 million and $11.3 million as of December 31, 2022 and December 31, 2021, respectively for the remediation of these sites.
We have recorded a total environmental liability of $30.2 million and $28.0 million as of December 31, 2023 and 2022, respectively, for the remediation of these sites. The Company recognized a charge of $2.4 million and $16.7 million during the years ended December 31, 2023 and 2022, respectively, for the remeasurement of environmental liabilities.
These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP. EBITDA (loss) from continuing operations and Adjusted EBITDA (loss) from continuing operations "EBITDA from continuing operations" is defined as earnings from continuing operations before taxes, interest, and depreciation and amortization.
These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP.
Support.com provides customer service, sales support, and technical support primarily to large corporations, businesses and professional services organizations. Support.com also earns revenues for end-user software products provided through direct customer downloads and sale via partners. Support.com operates primarily in the United States, but had international operations that included staff providing support services.
Support.com also earned revenues for end-user software products provided through direct customer downloads and sale via partners. Support.com operated primarily in the United States, but had international operations that included staff providing support services. The contract for Support.com's largest customer was not renewed upon expiration on December 31, 2022.
See Note 3, " Merger with Support.com ", in the Notes to Consolidated Financial Statements for a further discussion of the Merger. Effective September 14, 2021, following the completion of the Merger, Support.com began operating as a separate operating and reporting segment. Support.com provides solutions and technical programs to customers delivered by home-based employees.
Effective September 14, 2021, following the completion of the Merger, Support.com began operating as a separate operating and reporting segment. Support.com provided solutions and technical programs to customers delivered by home-based employees. Support.com provided customer service, sales support, and technical support primarily to large corporations, businesses, and professional services organizations.
We generated revenue (i) through the exchange of bitcoins earned by ("ASICs" or "miners") as rewards and transaction fees for U.S. dollars and, to a much lesser extent in 2022 through revenue earned from third parties for hosting ASICs owned by third parties and providing operations, maintenance and other blockchain related services to third parties and (ii) through the sale of electricity generated by our power plant, and not consumed in cryptocurrency datacenter operations, to New York State’s power grid at prices set on a daily basis through the New York Independent System Operator ("NYISO") wholesale market.
We also generated revenue through the sale of electricity generated by our power plant, and not consumed in cryptocurrency datacenter operations, to New York State's power grid at prices set on a daily basis through the New York Independent System Operator ("NYISO") wholesale market.
Impairment of long-lived assets As a result of the significant reduction in the price of bitcoin and increased energy prices during the year ended December 31, 2022, we recognized impairment charges of $176.3 million associated with long-lived assets to reduce the net book value of the Company to fair value.
Impairment of long-lived assets As a result of the impairment assessment conducted in order to evaluate future uses of the remaining real estate assets in South Carolina during the year ended December 31, 2023, we recognized impairment charges of $4.0 million associated with long-lived assets to reduce the net book value of the Company to fair value.
Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same fashion. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP.
Because of these limitations, Adjusted operating loss from continuing operations, Adjusted net loss from continuing operations, EBITDA from continuing operations and Adjusted EBITDA from continuing operations should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S.
Financing Arrangements See Note 6, " Debt ," and Note 7, " Stockholder's Equity " and Note 15, " Subsequent Events " in the Notes to Consolidated Financial Statements for details regarding our financing arrangements.
The decrease is primarily related to lower principal payments on debt of $47.1 million during 2023 compared to 2022. Financing Arrangements See Note 5, " Debt ," and Note 6, " Stockholder's Equity " and Note 14, " Subsequent Events " in the Notes to Consolidated Financial Statements for details regarding our financing arrangements.
Following the execution of the Hosting Agreements, our cryptocurrency datacenter operations' primary source of revenue is fees earned, including a gross profit sharing component, from hosting bitcoin miners. See further discussion of the Hosting Agreements under "Recent Transactions" below. Following the execution of the Hosting Agreements, we continue to own approximately 10,000 miners with a capacity of approximately 1.1 EH/s.
Following the execution of the NYDIG Hosting Agreement, our cryptocurrency datacenter operations' primary source of revenue is fees earned, including a gross profit-sharing component, from hosting bitcoin miners.
Greenidge recognizes revenue on capacity agreements over the life of the contract as its series of performance obligations are met as capacity to provide power is maintained. Sales tax, value-added tax, and other taxes Greenidge collects concurrent with revenue-producing activities are excluded from revenue.
Power and capacity revenue Greenidge recognizes power revenue at a point in time when the electricity is delivered to the NYISO and its performance obligation is met. Greenidge recognizes revenue on capacity agreements over the life of the contract as its series of performance obligations are met as capacity to provide power is maintained.
The increased average hash rate, partially offset by a higher average mining difficulty, led to us producing 2,731 bitcoins in 2022 as compared to 1,866 bitcoins in 2021. 52 Power and capacity revenue Power and capacity revenue at our New York Facility is earned when we sell capacity and energy and ancillary services to the wholesale power grid managed by the NYISO.
Power and capacity revenue Power and capacity revenue at our New York Facility is earned when we sell capacity and energy and ancillary services to the wholesale power grid managed by the NYISO.
Provision for income taxes In 2022, we recognized an income tax provision of $15.0 million, or an effective tax rate of (5.9)% due to the recording of a $15.0 million charge for a valuation allowance for the deferred tax assets.
Our effective tax rate for the year ended December 31, 2022 was (5.9)%, which was caused by the recording of a $15.0 million charge for a valuation allowance for the deferred tax assets.
Our operating cash flows are affected by several factors including the price of bitcoin, cost of electricity, natural gas and emissions credits. During the year ended December 31, 2022, our profit and cash flows were impacted significantly by volatility in the prices of bitcoin and natural gas.
Our operating cash flows generated by mining, hosting, and power are affected by several factors including the price of bitcoin, bitcoin mining difficulty, and the costs of electricity, natural gas, and emissions credits.
We compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss (income) to EBITDA (loss) and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
You should review the reconciliations of Operating loss from continuing operations to Adjusted operating loss from continuing operations, Net loss from continuing operations to Adjusted net loss from continuing operations, Net loss from continuing operations to EBITDA from continuing operations and Adjusted EBITDA from continuing operations below and not rely on any single financial measure to evaluate our business.
Years Ended December 31, Variance $ in thousands 2022 2021 $ % Total revenue $ 89,979 $ 97,325 $ (7,346) (8) % Cost of revenue (exclusive of depreciation and amortization shown below) 59,839 28,390 31,449 111 % Selling, general and administrative expenses 36,946 23,989 12,957 54 % Depreciation and amortization 35,136 8,474 26,662 315 % Gain on sale of assets (1,780) — (1,780) N/A Impairment of long-lived assets 176,307 — 176,307 N/A Remeasurement of environmental liability 16,694 3,688 13,006 353 % Operating (loss) income (233,163) 32,784 (265,947) (811) % Other (expense) income: Interest expense, net (21,575) (3,689) (17,886) (485) % Interest expense - related party — (22) 22 N/A (Loss) gain on sale of digital assets (15) 275 (290) (105) % Other income, net 14 153 (139) (91) % Total other expense, net (21,576) (3,283) (18,293) (557) % (Loss) income from continuing operations before taxes (254,739) 29,501 (284,240) (963) % Provision for income taxes 15,002 7,901 7,101 90 % Net (loss) income from continuing operations $ (269,741) $ 21,600 $ (291,341) (1349) % Adjusted Amounts (a) Adjusted operating (loss) income from continuing operations $ (38,898) $ 38,834 $ (77,732) (200) % Adjusted operating margin from continuing operations (43.2) % 39.9 % Adjusted net (loss) income from continuing operations $ (60,421) $ 26,034 $ (86,455) (332) % Other Financial Data (a) EBITDA (loss) from continuing operations $ (198,028) $ 41,686 $ (239,714) (575) % as a percent of revenues (220.1) % 42.8 % Adjusted EBITDA (loss) from continuing operations $ (1,127) $ 51,506 $ (52,633) (102) % as a percent of revenues (1.3) % 52.9 % a) Adjusted Amounts and Other Financial Data are non-GAAP performance measures.
Years Ended December 31, Variance $ in thousands 2023 2022 $ % Total revenue $ 70,388 $ 89,979 $ (19,591) (22) % Cost of revenue (exclusive of depreciation and amortization shown below) 51,005 61,552 (10,547) (17) % Selling, general and administrative expenses 26,167 35,233 (9,066) (26) % Depreciation and amortization 13,602 35,136 (21,534) (61) % Gain on sale of assets (9,903) (1,780) (8,123) 456 % Impairment of long-lived assets 4,000 176,307 (172,307) (98) % Remeasurement of environmental liability 2,409 16,694 (14,285) (86) % Operating loss (16,892) (233,163) 216,271 (93) % Other (expense) income: Interest expense, net (12,659) (21,575) 8,916 (41) % Gain (loss) on sale of digital assets 512 (15) 527 (3513) % Other income, net — 14 (14) (100) % Total other expense, net (12,147) (21,576) 9,429 (44) % Loss from continuing operations before taxes (29,039) (254,739) 225,700 (89) % Provision for income taxes - 15,002 (15,002) (100) % Net loss from continuing operations $ (29,039) $ (269,741) $ 240,702 (89) % Adjusted Amounts (a) Adjusted operating (loss) income from continuing operations $ (16,305) $ (38,898) $ 22,593 (58) % Adjusted operating margin from continuing operations (23.2) % (43.2) % Adjusted net (loss) income from continuing operations $ (28,452) $ (60,421) $ 31,969 (53) % Other Financial Data (a) EBITDA (loss) from continuing operations $ (2,778) $ (198,028) $ 195,250 (99) % as a percent of revenues (3.9) % (220.1) % Adjusted EBITDA (loss) from continuing operations $ 153 $ (1,127) $ 1,280 (114) % as a percent of revenues 0.2 % (1.3) % a) Adjusted Amounts and Other Financial Data are non-GAAP performance measures.
See Note 5, " Property, Plant and Equipment ", in the Notes to Consolidated Financial Statements for a further discussion of the impairment. Remeasurement of environmental liabilities During the year ended December 31, 2022, we recognized a charge of $16.7 million for the remeasurement of environmental liabilities.
See Note 4, " Property and Equipment, Net ", in the Notes to Consolidated Financial Statements for a further discussion of the impairment. Remeasurement of environmental liabilities We recognize environmental liabilities in accordance with ASC 410-30, Asset Retirement and Environmental Obligations.
To the extent any other cryptocurrency datacenters are public or may go public, the cost of revenue (exclusive of depreciation and amortization) per MWh metric may not be comparable because some competitors may include depreciation in their cost of revenue figures. 56 Liquidity and Capital Resources On December 31, 2022, we had cash and cash equivalents of $15.2 million.
To the extent any other cryptocurrency datacenters are public or may go public, the cost of revenue (exclusive of depreciation) per MWh metric may not be comparable because some competitors may include depreciation in their cost of revenue figures. Average bitcoin price is derived from the daily average bitcoin price at open as reported by Coinbase, a leading cryptocurrency exchange.
Riley purchased $1 million of our class A common stock on a principal basis at a price of $0.75 per share pursuant to the ATM Agreement; • Atlas Holdings LLC purchased $1 million of our class A common stock at market prices through B.
Riley Commercial and Atlas Holdings LLC each purchased $1 million of our Class A common stock pursuant to the ATM Agreement. In addition to the net proceeds from the sale of Class A common stock to B.
Revenue Recognition Cryptocurrency Datacenter Revenue Greenidge has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and Greenidge’s enforceable right to compensation only begins when Greenidge provides computing power to the mining pool operator.
The contracts are terminable at any time at no cost by either party and Greenidge’s enforceable right to compensation begins only when, and lasts as long as, Greenidge performs hash computations for the mining pool operator.
While bitcoin prices have begun to recover in the first quarter of 2023, management cannot predict when or if bitcoin prices will recover to prior levels, or volatility in energy costs.
While bitcoin prices began to recover during 2023 from the significant declines experienced in 2022, and have continued to rise in the first quarter of 2024, management cannot predict the future price of bitcoin, nor can we predict the volatility of energy costs.
Cost of Revenue Years Ended December 31, Variance $ in thousands 2022 2021 $ % Cryptocurrency datacenter $ 45,933 $ 19,159 $ 26,774 140 % Power and capacity 13,906 9,231 4,675 51 % Total cost of revenue (exclusive of depreciation and amortization) $ 59,839 $ 28,390 $ 31,449 111 % As a percentage of total revenue 66.5 % 29.2 % Total cost of revenue, exclusive of depreciation and amortization, increased $31.4 million, or 111%, to $59.8 million during the year ended December 31, 2022 as compared to the prior year period.
Cost of Revenue Years Ended December 31, Variance $ in thousands 2023 2022 $ % Cryptocurrency mining $ 15,051 $ 47,195 $ (32,144) (68) % Datacenter hosting 29,695 — 29,695 N/A Power and capacity 6,259 14,357 (8,098) (56) % Total cost of revenue (exclusive of depreciation and amortization) $ 51,005 $ 61,552 $ (10,547) (17) % As a percentage of total revenue 72.5 % 68.4 % Total cost of revenue, exclusive of depreciation, decreased $10.5 million, or 17%, to $51.0 million during the year-ended December 31, 2023 as compared to the prior year period.
Natural gas prices have been on an upward trajectory since June of 2021 and continued at elevated levels during 2022. During 2022, the volatility in the cost of natural gas resulted in an approximate 83% increase in the weighted average cost of natural gas, as compared to the prior year.
Natural gas prices dropped in January of 2023, and trended downward during the year only rising slightly in the fourth quarter. During 2023, the volatility in the cost of natural gas resulted in an approximate 68% decrease in the weighted average cost of natural gas, as compared to the prior year.
Our liquidity is subject to volatility in both number of bitcoins mined and the underlying price of bitcoin. 58 Contractual Obligations and Commitments The following table summarizes our contractual obligations and other commitments as of December 31, 2022, and the years in which these obligations are due: $ in thousands Total 2023 2024-2025 2026-2027 Thereafter Debt payments $ 187,322 $ 80,251 $ 29,757 $ 77,314 $ – Leases 241 130 111 — — Environmental obligations 28,000 600 9,500 9,850 8,050 Natural gas transportation 14,694 1,896 3,792 3,792 5,214 Total $ 230,257 $ 82,877 $ 43,160 $ 90,956 $ 13,264 The debt payments included in the table above include the principal and interest amounts due.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and other commitments as of December 31, 2023, and the years in which these obligations are due: $ in thousands Total 2024 2025-2026 2027-2028 Thereafter Debt payments $ 90,611 $ 6,137 $ 84,474 $ — $ – Leases 111 111 — — — Environmental obligations $ 30,229 $ 363 $ 10,940 $ 10,923 $ 8,003 Natural gas transportation 12,798 1,896 3,792 3,792 3,318 Total $ 133,749 $ 8,507 $ 99,206 $ 14,715 $ 11,321 The debt payments included in the table above include the principal and interest amounts due.
The terms of the Hosting Agreements require NYDIG affiliates to pay a hosting fee that covers the cost of power and direct costs associated with management of the mining facilities, as well as a gross profit-sharing arrangement. We believe this reduces our downside risk of bitcoin price deterioration and cost increases related to natural gas.
Under the NYDIG Hosting Agreement, we generate revenue from a reimbursement fee that covers the cost of power and direct costs associated with management of the mining facilities, a hosting fee and a gross profit-sharing arrangement. The arrangement covers the majority of our current mining capacity at our owned facilities during 2023.
Our cryptocurrency datacenter revenue decreased by $14.1 million, or 16%, to $73.8 million during the year ended December 31, 2022. The decrease was primarily attributable to 40% decrease in the average bitcoin price and a 49% increase in mining difficulty.
The decrease was primarily attributable to a 48.3% decrease in our average mining hashrate during the year ended December 31, 2023 as a result of a decrease in our mining fleet due to the addition of hosting services as a product offering. The decrease in cryptocurrency mining revenue was further impacted by a 71.1% increase in mining difficulty.
During the first quarter of 2023, we repaid $2.8 million of the Promissory Note, including the $1.9 million repayment mentioned previously, as a result of the net proceeds received from sales of class A common stock under the ATM Agreement.
Riley Commercial and Atlas Holdings LLC, during 2023, we received net proceeds of $20.6 million from sales of Class A common stock pursuant to the ATM Agreement. We repaid all $6.8 million of principal on the Secured Promissory Note during the year ended December 31, 2023.
The cryptocurrency that Greenidge receives as transaction consideration is noncash consideration, which Greenidge measures at fair value on the date received, which is not materially different than the fair value at the contract inception or the time Greenidge has earned the award from the pools. The consideration is all variable.
The cryptocurrency that Greenidge receives as transaction consideration is noncash consideration, which Greenidge measures at fair value on the contract inception date at 0:00:00 UTC on the start date of the contract. The fair value is based on Greenidge’s primary exchange of the related cryptocurrency which is considered to be Coinbase.
To date, we have primarily relied on debt and equity financing to fund our operations, including meeting ongoing working capital needs. During 2022, we obtained approximately $107.1 million of additional financings, net of debt issuance costs, through two different agreements described in Note 6, "Debt", in the Notes to Consolidated Financial Statements.
To date, we have primarily relied on debt and equity financing to fund our operations, including meeting ongoing working capital needs. Our management took certain actions during 2023 and during the first quarter of 2024 to improve the Company's liquidity.

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