Delaware (State or other jurisdiction of incorporation or organization) |
7374 (Primary Standard Industrial Classification Code Number) |
86-1746728 (I.R.S. Employer Identification Number) |
Chris Zochowski Richard Alsop Kristina Trauger Shearman & Sterling LLP 401 9th Street, NW Suite 800 Washington, DC 20004 (202) 508-8000 |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
|||||
Emerging growth company |
Title of Each Class of Securities to be Registered |
Amount to be Registered (1) |
Proposed Maximum Offering Price Per Share (2) |
Proposed Maximum Aggregate Offering Price (2) |
Amount of Registration Fee | ||||
Class A common stock, par value $0.0001 per share |
3,500,000 |
$49.65 |
$173,775,000 |
$18,959(*) | ||||
(1) |
Represents 3,500,000 shares of class A common stock that are issuable at the option of the registrant pursuant to a purchase agreement with the selling stockholder. The shares will be offered for resale by the selling stockholder. Pursuant to Rule 416 under the Securities Act of 1933, this registration statement also covers any additional number of shares of class A common stock issuable upon stock splits, stock dividends, dividends or other distribution, recapitalization or similar events with respect to the shares of Class A common stock being registered pursuant to this registration statement. |
(2) |
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, based on the average of the high and low prices per share of class A common stock as reported on The Nasdaq Global Select Market on September 15, 2021. |
* |
Previously paid. |
Page |
||||
iii |
||||
1 |
||||
16 |
||||
17 |
||||
55 |
||||
56 |
||||
57 |
||||
64 |
||||
72 |
||||
73 |
||||
91 |
||||
111 |
||||
119 |
||||
125 |
||||
127 |
||||
129 |
||||
131 |
||||
136 |
||||
137 |
||||
141 |
||||
144 |
||||
144 |
||||
144 |
||||
F-1 |
• | the ability to negotiate or execute definitive documentation with respect to a facility in Spartanburg, South Carolina on terms and conditions that are acceptable to Greenidge, whether on a timely basis or at all; |
• | the ability to recognize the anticipated objectives and benefits of an expansion into a facility in Spartanburg, South Carolina; |
• | the ability to recognize the anticipated objectives and any benefits of the Merger described in Note 1 of the Notes to Consolidated Financial Statements of Greenidge Generation Holdings Inc. herein, including the anticipated tax treatment of the Merger; |
• | changes in applicable laws, regulations or permits affecting our operations or the industries in which we operate, including regulation regarding power generation, cryptocurrency usage and/or cryptocurrency mining; |
• | any failure by us to obtain acceptable financing with regard to our growth strategies or operations; |
• | fluctuations and volatility in the price of bitcoin and other cryptocurrencies; |
• | loss of public confidence in, or use cases of, bitcoin and other cryptocurrencies; |
• | the potential of cryptocurrency market manipulation; |
• | the economics of mining cryptocurrency, including as to variables or factors affecting the cost, efficiency and profitability of mining; |
• | the availability, delivery schedule and cost of equipment necessary to maintain and grow our business and operations, including mining equipment and equipment meeting the technical or other specifications required to achieve our growth strategy; |
• | the possibility that we may be adversely affected by other economic, business or competitive factors, including factors affecting the industries in which we operate or upon which we rely and are dependent; |
• | the ability to expand successfully to other facilities, mine other cryptocurrencies or otherwise expand our business; |
• | changes in tax regulations applicable to us, our assets or cryptocurrencies, including bitcoin; |
• | any litigation involving us; |
• | costs and expenses relating to cryptocurrency transaction fees and fluctuation in cryptocurrency transaction fees; |
• | the ability to effectuate the Notes Offering (as defined below), on terms that are acceptable to us, whether on a timely basis or at all; |
• | the condition of our physical assets, including that our current single operating facility may realize material, if not total, loss and interference as a result of equipment malfunction or break-down, physical disaster, data security breach, computer malfunction or sabotage; and |
• | the actual and potential impact of the COVID-19 pandemic. |
• | Bitcoin-Mining |
• | Independent Electric Generation |
• | Capacity revenue: We receive capacity revenue for committing to sell power to the NYISO when dispatched. |
• | Energy revenue: When dispatched by the NYISO, we receive energy revenue based on the hourly price of power. |
• | Ancillary services revenue: When selected by the NYISO, we receive compensation for the provision of operating reserves. |
• | Vertical integration |
• | Low power costs |
• | Bitcoin market upside |
• | Power market upside |
• | Self-reliance behind-the-meter |
• | Relatively stable regulatory environment low-cost power environments. |
• | Cryptocurrency experience low-cost ASIC mining computers of proven performance. |
• | Blue-chip backing |
• | have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
• | comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
• | submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency” |
• | 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. |
• | It is not possible to predict the actual number of shares of class A common stock we will sell under the Purchase Agreement to the Selling Stockholder, or the actual gross proceeds resulting from those sales. |
• | Investors who buy shares at different times will likely pay different prices. |
• | We may not have access to the full amount available under the Purchase Agreement. |
• | We may use these proceeds in ways with which you may not agree. |
• | We have a limited operating history, with operating losses as we have grown. If we are unable to sustain greater revenues than our operating costs of bitcoin mining and power generation, as well as expansion plans, we will resume operating losses, which could negatively impact our operations, strategy and financial performance. |
• | While we have multiple sources of revenue from our business and operations, these sources of revenue currently depend on the single natural gas power generation facility that we operate. Any disruption to our single power plant would have a material adverse effect on our business and operations, as well as our results of operations and financial condition. |
• | 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. |
• | The loss of any of our management team, an inability to execute an effective succession plan, or an inability to attract and retain qualified personnel could adversely affect our operations, strategy and business. |
• | Our business and operating plan may be altered due to several external factors including but not limited to market conditions, the ability to procure equipment in a quantity, cost and timeline consistent with the business plan and the ability to identify and acquire additional locations to replicate the operating model in place at our existing facility. |
• | The properties utilized by us in our bitcoin mining operations may experience damage, including damage not covered by insurance. |
• | Our bitcoin may be subject to loss, theft or restriction on access. |
• | If bitcoin or other cryptocurrencies are determined to be investment securities, and we hold a significant portion of our assets in such cryptocurrency, investment securities or non-controlling equity interests of other entities, we may inadvertently violate the Investment Company Act. |
• | There has been limited precedent set for financial accounting of digital assets and so it is unclear how we will be required to account for digital asset transactions. |
• | Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations. |
• | Regulatory changes or actions may alter the nature of an investment in us or restrict the use of bitcoin in a manner that adversely affects our business, prospects or operations. |
• | We are subject to risks related to Internet disruptions, which could have an adverse effect on our ability to mine bitcoin. |
• | Our future success will depend significantly on the price of bitcoin, which is subject to risk and has historically been subject to wide swings and significant volatility. |
• | The impact of geopolitical and economic events on the supply and demand for bitcoin is uncertain. |
• | Bitcoin miners and other necessary hardware are subject to malfunction, technological obsolescence, the global supply chain and difficulty and cost in obtaining new hardware. |
• | We face risks and disruptions related to the COVID-19 pandemic and supply chain issues, including in semiconductors and other necessary bitmining components, which could significantly impact our operations and financial results. |
• | We may not adequately respond to rapidly changing technology. |
• | A failure to properly monitor and upgrade the bitcoin network protocol could damage the bitcoin network which could, in turn, have an adverse effect on our business. |
• | Over time, incentives for bitcoin miners to continue to contribute processing power to the bitcoin network may transition from a set reward to transaction fees. If the incentives for bitcoin mining are not sufficiently high, we may not have an adequate incentive to continue to mine. |
• | Incorrect or fraudulent cryptocurrency transactions may be irreversible. |
• | Support’s financial condition and results of operations may vary from quarter to quarter, which may cause the price of our common stock to decline. |
• | A substantial portion of Support’s revenue is generated by a limited number of clients. The loss or reduction in business from any of these clients would adversely affect its business and results of operations. |
• | Support has a history of losses, it may incur losses in the future and may not sustain profitability in the near term; and as a result, it may need to alter its business plans or change its business strategy. |
• | Support has been, is currently and may be in the future the subject of governmental investigations relating to past products and services. |
• | The market price, trading volume and marketability of our class A common stock may, from time to time, be significantly affected by numerous factors beyond our control. |
• | 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. |
• | Because we are a “controlled company” within the meaning of the Nasdaq listing rules, stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Total revenue |
$ | 16,176 | $ | 4,672 | $ | 27,239 | $ | 7,814 | ||||||||
Cost of revenue (exclusive of depreciation and amortization shown below) |
4,724 | 2,582 | 9,146 | 4,609 | ||||||||||||
Selling, general and administrative expenses |
4,565 | 1,189 | 8,060 | 2,638 | ||||||||||||
Depreciation and amortization |
1,603 | 1,130 | 2,864 | 2,163 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from operations |
5,284 | (229 | ) | 7,169 | (1,596 | ) | ||||||||||
Interest and other expense, net |
(369 | ) | (342 | ) | (243 | ) | (581 | ) | ||||||||
Provision for income taxes |
(1,397 | ) | — | (2,129 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 3,518 | $ | (571 | ) | $ | 4,797 | $ | (2,177 | ) | ||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) per share: |
||||||||||||||||
Basic |
$ | 0.10 | $ | 0.15 | ||||||||||||
Diluted |
$ | 0.08 | $ | 0.12 |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Total revenue |
$ | 20,114 | $ | 4,439 | ||||
Cost of revenue (exclusive of depreciation and amortization shown below) |
12,600 | 4,900 | ||||||
Selling, general and administrative expenses |
5,581 | 5,833 | ||||||
Depreciation and amortization |
4,564 | 1,679 | ||||||
Loss from operations |
(2,631 | ) | (7,973 | ) | ||||
Interest and other expense, net |
(659 | ) | (502 | ) | ||||
Net loss |
$ | (3,290 | ) | $ | (8,475 | ) |
June 30, 2021 |
December 31, 2020 |
|||||||
Current assets |
$ | 59,933 | $ | 14,541 | ||||
Long-term assets |
68,754 | 50,834 | ||||||
|
|
|
|
|||||
Total assets |
$ | 128,687 | $ | 65,375 | ||||
Total liabilities |
$ | 35,748 | $ | 21,015 | ||||
Total stockholders’ equity |
$ | 92,939 | $ | 44,360 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Total revenue |
$ | 8,512 | $ | 11,034 | $ | 18,143 | $ | 22,983 | ||||||||
Cost of revenue |
5,492 | 7,172 | 11,587 | 14,886 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Gross profit |
3,020 | 3,862 | 6,556 | 8,097 | ||||||||||||
Total operating expenses |
3,869 | 3,389 | 9,424 | 7,295 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Income (loss) from operations |
(849 | ) | 473 | (2,868 | ) | 802 | ||||||||||
Interest income and other, net |
75 | 173 | 117 | 257 | ||||||||||||
Income taxes |
(25 | ) | (29 | ) | (42 | ) | (78 | ) | ||||||||
|
|
|
|
|
|
|||||||||||
Net income (loss) |
$ | (799 | ) | $ | 617 | $ | (2,793 | ) | $ | 981 | ||||||
|
|
|
|
|
|
|||||||||||
Net income (loss) per share: Basic and Diluted |
$ | (0.03 | ) | $ | 0.03 | $ | (0.13 | ) | $ | 0.05 |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Total revenue |
43,864 | 63,333 | ||||||
Cost of revenue |
28,921 | 46,865 | ||||||
Gross profit |
14,943 | 16,468 | ||||||
Total operating expenses |
14,891 | 13,517 |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Income from operations |
52 | 2,951 | ||||||
Interest income and other, net |
496 | 1,049 | ||||||
Income taxes |
(102 | ) | (154 | ) | ||||
Net income |
$ | 446 | $ | 3,846 | ||||
Net income per share: Basic and Diluted |
$ | 0.02 | $ | 0.20 |
June 30, 2021 |
December 31, 2020 |
|||||||
Current assets |
$ | 44,567 | $ | 37,612 | ||||
Long-term assets |
1,438 | 1,654 | ||||||
|
|
|
|
|||||
Total assets |
$ | 46,005 | $ | 39,266 | ||||
Total liabilities |
$ | 5,758 | $ | 4,830 | ||||
Total stockholders’ equity |
$ | 40,247 | $ | 34,436 |
• | our total revenues will be in the range of $33 million to $37 million; |
• | our net loss will be in the range of $(19) million and $(16) million. The expected net loss is driven by approximately $30 million of charges associated with the Merger (including approximately $27 million of non-cash charges associated with the issuance of shares and warrants that were contingent upon the closure of the Merger, and other public company filing related costs); and |
• | our Adjusted EBITDA will be between $18 million and $22 million. |
Three Months Ended September 30, 2021 |
||||||||
Low |
High |
|||||||
(in millions) |
||||||||
Net Loss |
$ | (19 | ) | $ | (16 | ) | ||
Taxes |
3 | 4 | ||||||
Depreciation and amortization |
3 | 3 | ||||||
Interest |
1 | 1 | ||||||
EBITDA |
(12 | ) | (8 | ) | ||||
Stock-based compensation |
— | — | ||||||
Merger and public company filing related costs – noncash (1) |
27 | 27 | ||||||
Merger and public company filing related costs – cash (1) |
3 | 3 | ||||||
Adjusted EBITDA |
$ | 18 | $ | 22 |
(1) | Merger and public company filing related costs are associated with the Merger and non-recurring charges associated with the issuance of equity instruments that were contingent upon closure of the Merger, as well as legal and other professional fees associated with the Merger and becoming a public company. |
Common A Common Stock offered by the Selling Stockholder: |
This prospectus relates to the offer and sale of up to 3,500,000 shares of class A common stock by the Selling Stockholder, which shares of class A common stock we may, at our election, issue and sell to the Selling Stockholder pursuant to the Purchase Agreement from time to time after the date of this prospectus, subject to satisfaction of specified conditions set forth in the Purchase Agreement. |
Selling Stockholder: |
B. Riley Principal Capital, LLC |
Shares outstanding: |
9,627,705 shares of class A common stock and 29,040,000 shares of class B common stock. |
Shares outstanding after giving effect to the issuance of the shares registered hereunder: |
13,127,705 shares of class A common stock and 29,040,000 shares of class B common stock. |
Use of proceeds: |
We will not receive any proceeds from the sales of class A common stock by the Selling Stockholder pursuant to this prospectus. However, we may receive up to $500,000,000 in aggregate gross proceeds from sales of our class A common stock to the Selling Stockholder that we may, in our discretion, elect to make, from time to time after the date of this prospectus, pursuant to the Purchase Agreement. |
The net proceeds from sales, if any, under the Purchase Agreement, will depend on the frequency and prices at which we sell shares of class A common stock to the Selling Stockholder after the date of this prospectus. To the extent we sell class A common stock to the Selling Stockholder, we intend to use any proceeds therefrom for general corporate purposes, including making capital expenditures and funding working capital and future acquisitions and investments. See “ Use of Proceeds |
Risk factors: |
Investing in our securities involves a high degree of risk. See “ Risk Factors |
Nasdaq ticket symbol: |
Our class A common stock is listed on The Nasdaq Global Select Market under the trading symbol “GREE.” |
• | 583,080 shares of class A common stock issuable upon exercise of outstanding options under our 2021 Equity Incentive Plan (the “2021 Plan”) at a weighted average exercise price of $6.01 per share; |
• | 616,920 shares of class A common stock issuable upon the vesting of outstanding restricted stock units under the 2021 Plan; and |
• | up to 2,631,112 additional shares of class A common stock that are reserved for issuance under the 2021 Plan. |
• | 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. |
• | 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. |
• | changes in generation capacity in our markets, including the addition of new supplies of power as a result of the development of new plants, expansion of existing plants, the continued operation of uneconomic power plants due to state subsidies, or additional transmission capacity; |
• | disruption to, changes in or other constraints or inefficiencies of electricity, fuel or natural gas transmission or transportation; |
• | electric supply disruptions, including plant outages and transmission disruptions; |
• | changes in market liquidity; |
• | weather conditions, including extreme weather conditions and seasonal fluctuations, including the effects of climate change; |
• | changes in commodity prices and the supply of commodities, including but not limited to natural gas and oil; |
• | changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools and practices, distributed generation, and more efficient end-use technologies; |
• | development of new fuels, new technologies and new forms of competition for the production of power; |
• | fuel price volatility; |
• | changes in capacity prices and capacity markets. |
• | federal, state and foreign governmental environmental, energy and other regulation and legislation, including changes therein and judicial decisions interpreting such regulations and legislation; |
• | the creditworthiness and liquidity of fuel suppliers and/or transporters and their willingness to do business with us; and |
• | general economic and political conditions. |
• | The performance of its partners, including the success of its partners in attracting end users of its products, which can impact the amount of revenue it derives; |
• | Change, or reduction in or discontinuance of its programs with clients and partners; |
• | Cancellations, rescheduling or deferrals of significant customer products or service programs; |
• | Its reliance on a small number of partners for a substantial majority of its revenue; |
• | Its ability to successfully license and grow revenue related to its SUPERAntiSpyware ® software, Guided Paths® , Support.com Cloud and its service offerings; |
• | The timing of its sales to its clients and its partners’ resale of its products to end users and its ability to enter into new sales with partners and renew existing programs with its clients and partners; |
• | The availability and cost-effectiveness of advertising placements for its software products and services and its ability to respond to changes in the advertising markets in which it participates; |
• | The efficiency and effectiveness of its technology specialists; |
• | Its ability to effectively match staffing levels with service volumes on a cost-effective basis; |
• | Its ability to manage contract labor; |
• | Its ability to hire, train, manage and retain its home-based customer support specialists and enhance the flexibility of its staffing model in a cost-effective fashion and in quantities sufficient to meet forecast requirements; |
• | Its ability to manage costs under its self-funded health insurance program; |
• | Usage rates on the subscriptions it offers; |
• | Its ability to maintain a competitive cost structure for its organization; |
• | The rate of expansion of its offerings and its investments therein; |
• | Changes in the markets for computers and other technology devices relating to unit volume, pricing and other factors, including changes driven by declines in sales of personal computers and the growing popularity of tablets, and other mobile devices and the introduction of new devices into the connected home; |
• | Its ability to adapt to its clients’ needs in a market space defined by frequent technological change; |
• | Severe financial hardship or bankruptcy of one or more of its major clients; |
• | The amount and timing of operating costs and capital expenditures in its business; |
• | Failure to protect its intellectual property; |
• | Diversion of management’s attention from other business concerns, incurrence of costs and disruption of its ongoing business activities as a result of acquisitions or divestitures by Support; |
• | Costs related to the defense and settlement of litigation, which can also have an additional adverse impact on it because of negative publicity, diversion of management resources and other factors; |
• | Costs related to the defense and settlement of government investigations, requests for information and audits, which can also have an additional adverse impact on it because of negative publicity, diversion of management resources and other factors, including, without limitation, those audits, requests for information and investigations described in Part II. Item 1. Legal Proceedings of its annual report on Form 10-K for the year ended December 31, 2020; |
• | Public health or safety concerns, medical epidemics or pandemics, such as COVID-19, and other natural- or man-made disasters; |
• | The effects of any acquisitions, divestitures or significant investments; and |
• | Potential losses on investments, or other losses from financial instruments it may hold that are exposed to market risk. |
• | Maintain its current relationships and service programs, and develop new relationships, with service partners, subscriptions, and licensees of its Support.com technical support offering on acceptable terms or at all; |
• | Reach prospective customers for its software products in a cost-effective fashion; |
• | Reduce its dependence on a limited number of partners for a substantial majority of its revenue; |
• | Successfully license and grow revenue related to its consumer software, Support.com technical support subscriptions, Guided Paths ® and its technology support service offerings; |
• | Manage its employees and contract labor efficiently and effectively; |
• | Maintain gross and operating margins; |
• | Match staffing levels with demand for services and forecast requirements; |
• | Obtain bonuses and avoid penalties in contractual arrangements; |
• | Operate successfully in a time-based pricing model; |
• | Operate effectively in the SMB market; |
• | Successfully introduce new, and adapt its existing, services and products for consumers and businesses; |
• | Respond effectively to changes in the market for customer support services; |
• | Realize benefits of any acquisitions it makes; |
• | Adapt to changes in the markets it serves; |
• | Adapt to changes in its industry, including consolidation; |
• | Adapt to changes in the market due to public health concerns, medical epidemics or pandemics, such as COVID-19, and other natural- or man-made disasters; |
• | Respond to government regulations relating to its current and future business; |
• | Manage and respond to present, threatened, and future litigation; and |
• | Manage and respond to present, threatened or future government investigations and audits, including, without limitation, those audits and investigations described in Part II. Item 1 Legal Proceedings of its annual report on Form 10-K for the year ended December 31, 2020. |
• | stop selling, offering for sale, making, having made or exporting products, services and/or programs; |
• | limit or restrict the type of work that employees involved in such litigation may perform for it; |
• | pay substantial damages and/or license fees and/or royalties to the party bringing the claim that could adversely impact its liquidity or operating results; and |
• | attempt to redesign those products, services and/or programs that contain the allegedly problematic component. |
• | the efficacy of its marketing efforts; |
• | its ability to retain existing and obtain new customers and strategic partners; |
• | the quality and perceived value of its services; |
• | actions of its competitors, its strategic partners, and other third parties; |
• | positive or negative publicity, including material on the Internet; |
• | regulatory and other governmental related developments; and |
• | litigation related developments. |
• | Loss of or delay in market acceptance of its products; |
• | Material recall and replacement costs; |
• | Delay in revenue recognition or loss of revenue; |
• | The diversion of the attention of its engineering personnel from product development efforts; |
• | Support having to defend against litigation related to defective products; and |
• | Damage to Support’s reputation in the industry that could adversely affect its relationships with its customers. |
• | 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; |
• | 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; |
• | differences between our actual financial and operating results and those expected by investors; |
• | fluctuations in quarterly operating results; |
• | 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; |
• | recruitment or departure of key personnel; |
• | general economic trends and other external factors including inflation and interest rates; and |
• | investor perception of any of the foregoing. |
• | prepare and distribute periodic reports, proxy statements and other stockholder communications in compliance with the federal securities laws, the Nasdaq listing rules and Delaware law; |
• | expand the roles and duties of our board of directors and committees thereof and management; |
• | institute more comprehensive financial reporting and disclosure compliance procedures; |
• | involve and retain, to a greater degree, outside counsel and accountants to assist us with the activities listed above; |
• | build and maintain an investor relations function; and |
• | establish new internal policies, including those relating to trading in our securities and disclosure controls and procedures. |
• | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; |
• | being permitted to include two, not three, years of audited financials in our Forms 10-K and other reduced financial disclosures; |
• | being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
• | being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. |
• | 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. |
• | the closing sale price of our class A common stock on the trading day immediately prior to the applicable VWAP Purchase Date is not less than $1.00 (subject to adjustment as set forth in the Purchase Agreement); and |
• | all shares of class A common stock subject to all prior purchases by the Selling Stockholder under the Purchase Agreement have theretofore been received by the Selling Stockholder electronically as set forth in the Purchase Agreement. |
• | Such number of shares of class A common stock which, when aggregated with all other shares of class A common stock then beneficially owned by the Selling Stockholder and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the Selling Stockholder beneficially owning shares of class A common stock equal to (but not exceeding) the Beneficial Ownership Cap; and |
• | 30% of the daily trading volume in the class A common stock on Nasdaq (or, in the event the class A common stock is then listed on an “Eligible Market” as defined under the Purchase Agreement, on such Eligible Market) during the full VWAP Purchase Valuation Period on the applicable VWAP Purchase Date for such VWAP Purchase (subject to equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the applicable VWAP Purchase Valuation Period for such VWAP Purchase). |
• | the accuracy in all material respects of the representations and warranties of the Company included in the Purchase Agreement; |
• | the Company having performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Purchase Agreement to be performed, satisfied or complied with by the Company; |
• | the registration statement that includes this prospectus (and any one or more additional registration statements filed with the SEC that include shares of class A common stock that may be issued and sold by the Company to the Selling Stockholder under the Purchase Agreement) having been declared effective under the Securities Act by the SEC, and the Selling Stockholder being able to utilize this prospectus (and the prospectus included in any one or more additional registration statements filed with the SEC under the Registration Rights Agreement) to resell all of the shares of class A common stock included in this prospectus (and included in any such additional prospectuses); |
• | the SEC shall not have issued any stop order suspending the effectiveness of the registration statement that includes this prospectus (or any one or more additional registration statements filed with the SEC that include shares of class A common stock that may be issued and sold by the Company to the Selling Stockholder under the Purchase Agreement) or prohibiting or suspending the use of this prospectus (or the prospectus included in any one or more additional registration statements filed with the SEC under the Registration Rights Agreement), and the absence of any suspension of qualification or exemption from qualification of the class A common stock for offering or sale in any jurisdiction; |
• | there shall not have occurred any event and there shall not exist any condition or state of facts, which makes any statement of a material fact made in the registration statement that includes this prospectus (or in any one or more additional registration statements filed with the SEC that include shares of class A common stock that may be issued and sold by the Company to the Selling Stockholder under the Purchase Agreement) untrue or which requires the making of any additions to or changes to the statements contained therein in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of this prospectus or the prospectus included in any one or more additional registration statements filed with the SEC under the Registration Rights Agreement, in the light of the circumstances under which they were made) not misleading; |
• | this prospectus, in final form, shall have been filed with the SEC under the Securities Act prior to Commencement (and the prospectus included in any one or more additional registration statements filed with the SEC under the Registration Rights Agreement prior to the applicable VWAP Purchase |
Commencement Time, in final form, shall have been filed with the SEC under the Securities Act prior to the applicable VWAP Purchase Commencement Time), and all reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act shall have been filed with the SEC; |
• | trading in the class A common stock shall not have been suspended by the SEC or The Nasdaq Global Select Market (or, if the class A common stock is then listed or quoted on any other Eligible Market, as such term is defined in the Purchase Agreement, trading in the class A common stock shall not have been suspended by such Eligible Market), the Company shall not have received any final and non-appealable notice that the listing or quotation of the class A common stock on The Nasdaq Global Select Market (or Eligible Market, as applicable) shall be terminated on a date certain (unless, prior to such date, the class A common stock is listed or quoted on any other Eligible Market, as such term is defined in the Purchase Agreement), and there shall be no suspension of, or restriction on, accepting additional deposits of the class A common stock, electronic trading or book-entry services by DTC with respect to the class A common stock; |
• | the Company shall have complied with all applicable federal, state and local governmental laws, rules, regulations and ordinances in connection with the execution, delivery and performance of the Purchase Agreement and the Registration Rights Agreement; |
• | the absence of any statute, regulation, order, decree, writ, ruling or injunction by any court or governmental authority of competent jurisdiction which prohibits the consummation of or that would materially modify or delay any of the transactions contemplated by the Purchase Agreement or the Registration Rights Agreement; |
• | the absence of any action, suit or proceeding before any arbitrator or any court or governmental authority seeking to restrain, prevent or change the transactions contemplated by the Purchase Agreement or the Registration Rights Agreement, or seeking material damages in connection with such transactions; |
• | all of the shares of class A common stock that may be issued pursuant to the Purchase Agreement shall have been approved for listing or quotation on The Nasdaq Global Select Market (or if the class A common stock is not then listed on The Nasdaq Global Select Market, on any Eligible Market), subject only to notice of issuance; |
• | no condition, occurrence, state of facts or event constituting a Material Adverse Effect (as such term is defined in the Purchase Agreement) shall have occurred and be continuing; |
• | the absence of any bankruptcy proceeding against the Company commenced by a third party, and the Company shall not have commenced a voluntary bankruptcy proceeding, consented to the entry of an order for relief against it in an involuntary bankruptcy case, consented to the appointment of a custodian of the Company or for all or substantially all of its property in any bankruptcy proceeding, or made a general assignment for the benefit of its creditors; and |
• | the receipt by the Selling Stockholder of the legal opinions and negative assurances, audit comfort letters and bring-down legal opinions, negative assurances and audit comfort letters as required under the Purchase Agreement. |
• | the first day of the month next following the 24-month anniversary of the date of this prospectus; |
• | the date on which the Selling Stockholder shall have purchased shares of class A common stock under the Purchase Agreement for an aggregate gross purchase price equal to $500,000,000; |
• | the date on which the class A common stock shall have failed to be listed or quoted on The Nasdaq Global Select Market or any other Eligible Market; and |
• | the date on which the Company commences a voluntary bankruptcy case or any third party commences a bankruptcy proceeding against the Company, a custodian is appointed for the Company in a |
bankruptcy proceeding for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors. |
• | the occurrence of a Material Adverse Effect (as such term is defined in the Purchase Agreement); |
• | the occurrence of a Fundamental Transaction (as such term defined in the Purchase Agreement) involving our company; |
• | if we are in breach or default in any material respect of any of our covenants and agreements in the Purchase Agreement or in the Registration Rights Agreement, and, if such breach or default is capable of being cured, such breach or default is not cured within 15 trading days after notice of such breach or default is delivered to us; |
• | the effectiveness of the registration statement that includes this prospectus or any additional registration statement we file with the SEC pursuant to the Registration Rights Agreement lapses for any reason (including the issuance of a stop order by the SEC), or this prospectus or the prospectus included in any additional registration statement we file with the SEC pursuant to the Registration Rights Agreement otherwise becomes unavailable to the Selling Stockholder for the resale of all of the shares of class A common stock included therein, and such lapse or unavailability continues for a period of 45 consecutive trading days or for more than an aggregate of 90 trading days in any 365-day period, other than due to acts of the Selling Stockholder; or |
• | trading in the class A common stock on The Nasdaq Global Select Market (or if the class A common stock is then listed on an Eligible Market, trading in the class A common stock on such Eligible Market) has been suspended for a period of five consecutive trading days. |
Assumed Average Purchase Price Per Class A Share |
Number of Registered Class A Shares to be Issued if Full Purchase (1) |
Percentage of Outstanding Class A Shares After Giving Effect to the Issuance to the Selling Stockholder (2) |
Percentage of Outstanding Shares of Common Stock After Giving Effect to the Issuance to the Selling Stockholder (3) |
Purchase Prices for the Class A Shares to the Selling Stockholder Under the Purchase Agreement (4) |
||||||||||
$35.00 | 3,500,000 | 26.7 | % | 8.3 | % | $ | 116,375,000 | |||||||
$40.00 | 3,500,000 | 26.7 | % | 8.3 | % | $ | 133,000,000 | |||||||
$43.40(5) | 3,500,000 | 26.7 | % | 8.3 | % | $ | 144,305,000 | |||||||
$50.00 | 3,500,000 | 26.7 | % | 8.3 | % | $ | 166,250,000 | |||||||
$55.00 | 3,500,000 | 26.7 | % | 8.3 | % | $ | 182,875,000 |
(1) | The number of shares of class A common stock offered by this prospectus may not cover all the shares we ultimately sell to the Selling Stockholder under the Purchase Agreement, depending on the purchase price per share. We have included in this column only those shares being offered for resale by the Selling Stockholder under this prospectus, without regard for the Beneficial Ownership Cap. The shares of our class A common began trading on The Nasdaq Global Select market on September 15, 2021 and could therefore fluctuate materially. The assumed average purchase prices are solely for illustration and are not intended to be estimates or predictions of future stock performance. |
(2) | The denominator is based on 9,627,705 shares of class A common stock outstanding as of October 1, 2021, adjusted to include the issuance of the number of shares set forth in the second column. The numerator is based on the number of shares of class A common stock set forth in the second column. |
(3) | The denominator is based on the sum of 9,627,705 shares of class A common stock and 29,040,000 shares of class B common stock outstanding as of October 1, 2021, adjusted to include the issuance of the number of shares set forth in the second column. The numerator is based on the number of shares of class A common stock set forth in the second column. |
(4) | Purchase prices represent the aggregate purchase prices deemed to be received from the sale of all of the indicated maximum numbers of shares to be sold multiplied by the applicable assumed average purchase price per Class A share, less a fixed 5% discount, which shall be increased to 6% discount at such time that we received aggregate cash proceeds of $200,000,000. |
(5) | The closing sale price of our common stock on The Nasdaq Global Select Market on September 15, 2021. |
Greenidge |
Support |
Pro Forma Adjustments |
Note 4 |
Pro Forma Combined |
||||||||||||||||
Assets: |
||||||||||||||||||||
Current assets |
||||||||||||||||||||
Cash and cash equivalents |
$ | 37,890 | $ | 32,295 | $ | — | $ | 70,185 | ||||||||||||
Short term investments |
— | 6,201 | — | 6,201 | ||||||||||||||||
Digital assets |
222 | — | — | 222 | ||||||||||||||||
Accounts receivable |
369 | 5,470 | — | 5,839 | ||||||||||||||||
Fuel deposits |
1,297 | — | — | 1,297 | ||||||||||||||||
Miner equipment deposits |
16,523 | — | — | 16,523 | ||||||||||||||||
Emissions and carbon offset credits |
1,665 | — | — | 1,665 | ||||||||||||||||
Prepaid expense and other current assets |
1,967 | 601 | — | 2,568 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
59,933 | 44,567 | — | 104,500 | ||||||||||||||||
Property and equipment, net |
67,346 | 1,043 | — | 68,389 | ||||||||||||||||
Deposits and other assets |
1,408 | 395 | — | 1,803 | ||||||||||||||||
Intangible assets |
— | — | 16,810 | (a |
)(b) |
16,810 | ||||||||||||||
Goodwill |
— | — | 250,841 | (b |
) |
250,841 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
$ |
128,687 |
$ |
46,005 |
$ |
267,651 |
$ |
442,343 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities: |
||||||||||||||||||||
Current liabilities |
||||||||||||||||||||
Accounts payable |
$ | 1,650 | $ | 242 | $ | — | $ | 1,892 | ||||||||||||
Natural gas payable |
1,088 | — | — | 1,088 | ||||||||||||||||
Accrued expenses |
3,226 | 3,408 | 4,765 | (h |
) |
11,399 | ||||||||||||||
Accrued emissions expense—current |
814 | — | — | 814 | ||||||||||||||||
Deferred revenue |
40 | 1,189 | — | 1,229 | ||||||||||||||||
Notes payable—current portion |
11,499 | — | — | 11,499 | ||||||||||||||||
Finance lease, current portion |
570 | 12 | — | 582 | ||||||||||||||||
Income taxes payable |
1,567 | — | — | 1,567 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
20,454 | 4,851 | 4,765 | 30,070 | ||||||||||||||||
Deferred tax liability |
482 | — | 4,623 | (b |
)(c) |
5,105 | ||||||||||||||
Notes payable—net of current portion |
7,064 | — | — | 7,064 | ||||||||||||||||
Finance lease obligation, net of current portion |
409 | — | — | 409 | ||||||||||||||||
Asset retirement obligations |
2,345 | — | — | 2,345 | ||||||||||||||||
Environmental trust liability |
4,994 | — | — | 4,994 | ||||||||||||||||
Other long-term liabilities |
— | 907 | — | 907 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
35,748 |
5,758 |
9,388 |
50,894 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Stockholders’ equity: |
||||||||||||||||||||
Common stock |
— | 3 | (3 | ) | (b |
) |
— | |||||||||||||
Members’ capital |
— | — | — | (d |
) |
— | ||||||||||||||
Common stock class A |
— | — | — | — | ||||||||||||||||
Common stock class B |
3 | — | — | 3 | ||||||||||||||||
Series A preferred GGHI |
1 | — | — | 1 | ||||||||||||||||
Additional paid-in-capital |
113,054 | 259,620 | (259,620 | ) | (b |
) |
474,013 | |||||||||||||
303,275 | (b |
) |
||||||||||||||||||
57,684 | (e |
) |
||||||||||||||||||
Treasury stock, at cost |
— | (5,297 | ) | 5,297 | (b |
) |
— | |||||||||||||
Accumulated other comprehensive loss |
— | (2,482 | ) | 2,482 | (b |
) |
— | |||||||||||||
Accumulated deficit |
(20,119 | ) | (211,597 | ) | 211,597 | (b |
) |
(82,568 | ) | |||||||||||
(4,765 | ) | (h |
) |
|||||||||||||||||
(57,684 | ) | (e |
) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total stockholders’ equity |
92,939 |
40,247 |
258,263 |
391,449 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities and stockholders’ equity |
$ |
128,687 |
$ |
46,005 |
$ |
267,651 |
$ |
442,343 |
||||||||||||
|
|
|
|
|
|
|
|
Greenidge |
Support |
Merger Pro Forma Adjustments |
Pro Forma Note 4 |
Pro Forma Combined |
||||||||||||||||
Revenues |
$ | 16,176 | $ | 8,512 | $ | — | $ | 24,688 | ||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown below) |
4,724 | 5,492 | (20 | ) | (k |
) |
10,196 | |||||||||||||
Engineering and IT |
— | 555 | (8 | ) | (k |
) |
547 | |||||||||||||
Selling, general and administrative |
4,565 | 3,314 | (57 | ) | (k |
) |
7,822 | |||||||||||||
Depreciation and amortization |
1,603 | — | 85 | (k |
) |
2,497 | ||||||||||||||
809 | (f |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations |
5,284 | (849 | ) | (809 | ) | 3,626 | ||||||||||||||
Interest income (expense) and other |
(369 | ) | 75 | — | (g |
) |
(294 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before income taxes |
4,915 | (774 | ) | (809 | ) | 3,332 | ||||||||||||||
Income tax provision |
(1,397 | ) | (25 | ) | 223 | (i |
) |
(1,199 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
$ | 3,518 | $ | (799 | ) | $ | (587 | ) | $ | 2,132 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) per common share: |
||||||||||||||||||||
Basic |
$ | 0.10 | ($ | 0.03 | ) | $ | 0.06 | |||||||||||||
Diluted |
$ | 0.08 | ($ | 0.03 | ) | $ | 0.06 | |||||||||||||
Weighted average common shares outstanding |
||||||||||||||||||||
Basic |
28,320 | 24,150 | (24,150 | ) | (b |
) |
38,360 | |||||||||||||
10,040 | (l |
) |
||||||||||||||||||
Diluted |
35,425 | 24,150 | (24,150 | ) | (b |
) |
38,360 | |||||||||||||
2,935 | (l |
) |
Greenidge |
Support |
Merger Pro Forma Adjustments |
Pro Forma Note 4 |
Pro Forma Combined |
||||||||||||||||
Revenues |
$ | 27,239 | $ | 18,143 | $ | — | $ | 45,382 | ||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown below) |
9,146 | 11,587 | (70 | ) | (k |
) |
20,663 | |||||||||||||
Engineering and IT |
— | 1,479 | (9 | ) | (k |
) |
1,470 | |||||||||||||
Selling, general and administrative |
8,060 | 7,945 | (112 | ) | (k |
) |
15,893 | |||||||||||||
Depreciation and amortization |
2,864 | — | 191 | (k |
) |
4,673 | ||||||||||||||
1,618 | (f |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations |
7,169 | (2,868 | ) | (1,618 | ) | 2,683 | ||||||||||||||
Interest income (expense) and other |
(243 | ) | 117 | 22 | (g |
) |
(104 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before income taxes |
6,926 | (2,751 | ) | (1,596 | ) | 2,579 | ||||||||||||||
Income tax provision |
(2,129 | ) | (42 | ) | 439 | (i |
) |
(1,732 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
$ | 4,797 | $ | (2,793 | ) | $ | (1,157 | ) | $ | 847 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) per common share: |
||||||||||||||||||||
Basic |
$ | 0.15 | ($ | 0.13 | ) | $ | 0.02 | |||||||||||||
Diluted |
$ | 0.12 | ($ | 0.13 | ) | $ | 0.02 | |||||||||||||
Weighted average common shares outstanding |
||||||||||||||||||||
Basic |
28,283 | 22,189 | (22,189 | ) | (b |
) |
38,360 | |||||||||||||
10,077 | (l |
) |
||||||||||||||||||
Diluted |
35,245 | 22,189 | (22,189 | ) | (b |
) |
38,360 | |||||||||||||
3,115 | (l |
) |
Greenidge |
Reorganization Pro Forma Adjustments |
Note 4 |
Pro Forma Greenidge Post Reorganization |
Support |
Merger Pro Forma Adjustments |
Note 4 |
Pro Forma Combined |
|||||||||||||||||||||||||
Revenues |
$ | 20,114 | $ | — | $ | 20,114 | $ | 43,864 | — | $ | 63,978 | |||||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown below) |
12,600 | — | 12,600 | 28,921 | (247 | ) | (k |
) |
41,274 | |||||||||||||||||||||||
Engineering and IT |
— | — | — | 3,655 | (5 | ) | (k |
) |
3,650 | |||||||||||||||||||||||
Selling, general and administrative |
5,581 | — | 5,581 | 11,236 | 4,765 | (h |
) |
79,199 | ||||||||||||||||||||||||
57,684 | (e |
) |
||||||||||||||||||||||||||||||
(67 | ) | (k |
) |
|||||||||||||||||||||||||||||
Depreciation and amortization |
4,564 | — | 4,564 | — | 319 | (k |
) |
8,120 | ||||||||||||||||||||||||
3,237 | (f |
) |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income (loss) from operations |
(2,631 | ) | — | (2,631 | ) | 52 | (65,686 | ) | (68,265 | ) | ||||||||||||||||||||||
Interest income (expense) and other |
(659 | ) | — | (659 | ) | 496 | 573 | (g |
) |
410 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income (loss) before income taxes |
(3,290 | ) | — | (3,290 | ) | 548 | (65,113 | ) | (67,855 | ) | ||||||||||||||||||||||
Income tax provision |
— | (482 | ) | (j |
) |
(482 | ) | (102 | ) | 2,948 | (i |
) |
2,364 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income (loss) |
$ | (3,290 | ) | $ | (482 | ) | $ | (3,772 | ) | $ | 446 | $ | (62,165 | ) | $ | (65,491 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income (loss) per common share: |
||||||||||||||||||||||||||||||||
Basic |
($ | 0.13 | ) | $ | 0.02 | ($ | 1.72 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Diluted |
($ | 0.13 | ) | $ | 0.02 | ($ | 1.72 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Weighted average common shares outstanding: |
||||||||||||||||||||||||||||||||
Basic |
28,000 | 19,192 | (19,192 | ) | (b |
) |
38,040 | |||||||||||||||||||||||||
10,040 | (l |
) |
||||||||||||||||||||||||||||||
Diluted |
28,000 | 19,369 | (19,369 | ) | (b |
) |
38,040 | |||||||||||||||||||||||||
10,040 | (l |
) |
• | changes in allocations to intangible assets and bargain purchase gain or goodwill based on the results of certain valuations and other studies that have yet to be completed, |
• | other changes to assets and liabilities, and |
• | changes to the ultimate purchase consideration. |
Cash and cash equivalents |
$ | 32,295 | ||||||
Short term investments |
6,201 | |||||||
Accounts receivable |
5,470 | |||||||
Prepaid expenses and other current assets |
601 | |||||||
Property and equipment |
1,043 | |||||||
Other assets |
395 | |||||||
Accounts payable |
(242 | ) | ||||||
Accrued Expenses and other current liabilities |
(3,420 | ) | ||||||
Deferred revenue |
(1,189 | ) | ||||||
Other liabilities |
(907 | ) | ||||||
Intangible assets |
16,810 | (1 | ) | |||||
Deferred tax liability |
(4,623 | ) | (2 | ) | ||||
Goodwill |
250,841 | (3 | ) | |||||
|
|
|||||||
Total consideration |
$ |
303,275 |
||||||
|
|
(1) | To reflect the intangible assets, based upon a preliminary estimate of fair value and consists of customer contracts and trade name recognized as a result of the transaction. |
(2) | The deferred tax liability resulting from the increase in basis of intangible assets, as applicable, for book purposes but not for tax purposes was calculated using a 27.5% effective tax rate. |
(3) | To reflect the goodwill recognized as a result of the transaction. |
(a) | Reflects the intangible assets based upon preliminary estimates of fair value of customer contracts and tradename recognized as a result of the transaction. |
(b) | Represents the elimination of the historical equity of Support and the initial allocation of the purchase price to identified intangibles, fair value adjustments and goodwill, as follows (in thousands): |
Total consideration |
$ | 303,275 | (y | ) | ||||
Common stock |
(3 | ) | ||||||
Additional paid-in capital |
(259,620 | ) | ||||||
Treasury stock |
5,297 | |||||||
Accumulated other comprehensive loss |
2,482 | |||||||
Accumulated deficit |
211,597 | |||||||
Assets: |
||||||||
Intangible assets |
(16,810 | ) | ||||||
Liabilities: |
||||||||
Deferred tax liability |
4,623 | |||||||
|
|
|||||||
Goodwill |
$ | 250,841 | ||||||
|
|
(y) | Consideration of $303.3 million assumes a price per share of Support common stock of $11.80 and that the fully diluted amount of Support common stock is 25,701,286. Note that this is an illustrative purchase price and the final purchase price will be determined at the date the transaction is consummated. |
(c) | Adjusts the deferred tax liabilities resulting from the transaction. The estimated increase in deferred tax liabilities stems from the fair value adjustments for non-deductible intangible assets based on an estimated tax rate of 27.5%. |
(d) | Reflects the March 16, 2021 amendments to the organizational documents of Greenidge whereby (i) Greenidge established its class A common stock (with one vote per share) and class B common stock (with ten votes per share), (ii) all then outstanding common stock of Greenidge was converted to class B common stock, and (iii) a forward split of 4 for 1 was effected for all outstanding common stock of Greenidge. In connection with this, the effective conversion rate for the series A preferred stock issued in the Series A Private Placement was adjusted to provide that each share of series A preferred stock will be converted into four shares of class B common stock upon the filing and effectiveness of a registration statement registering such underlying class B common stock for resale. These events eliminated the historical equity of GGH LLC and established class A common stock and class B common stock at a par value of $0.0001 per share. |
(e) | Reflects an adjustment for the estimated value of the Investor Fee based upon 562,174 shares of class A common stock of Greenidge at a price of $102.61, which is the implied price using the price per share of Support common stock noted in (y) above and the exchange ratio of 0.115. This cost will not affect the combined company’s income statement beyond 12 months after the Closing Date. |
(f) | Reflects an adjustment for amortization of intangible assets, consisting of customer contracts and the Support.com trade name, recognized as a result of the transaction. The estimated value for the customer contracts is $15.6 million, which was determined by the present value of expected cash flows from such contracts. The estimated value of the customer contracts is assumed to be amortized over five years on a straight line basis. The estimated value of the Support.com trade name is $1.3 million, which was based on the present value of discrete royalties avoided plus the present value of the tax |
amortization benefit. The estimated value of the trade name is assumed to be amortized over 10 years on a straight line basis. |
(g) | Reflects the elimination of interest expense related to loans from Greenidge’s controlling shareholder that have been deemed fully satisfied. |
(h) | Reflects an adjustment for estimated transaction costs for both Greenidge and Support, such as adviser fees, legal and accounting expenses not yet incurred as of June 30, 2021. These costs will not affect the combined company’s income statement beyond 12 months after the Closing Date. |
(i) | Adjusts the tax provision to reflect the impact on the income tax provision resulting from the proforma adjustments, while assuming that the consolidated entity is a taxable entity due to the reorganization from an LLC to a corporation as of January 1, 2020. |
(j) | Reflects an adjustment for the proforma effect of the reorganization from an LLC to a corporation, as if the reorganization occurred on January 1, 2020, to recognize a deferred tax liability for the differences between the recorded values and tax bases of assets and liabilities. |
(k) | Adjusts Support’s results to present depreciation and amortization as a separate line item, consistent with Greenidge’s presentation. |
(l) | The unaudited pro forma condensed combined financial statements assume there will be 3,560,435 class A common stock shares outstanding, of which 2,998,261 shares will be issued to Support stockholders as consideration for the Merger and 562,174 shares will be issued to the Investor and 34,800,000 shares of class B common stock outstanding (inclusive of 320,000 shares issued during the first quarter of 2021 for the exercise of stock options and the purchase of miners) upon completion of the Merger and conversion of the series A preferred stock. The diluted shares included in the Greenidge financial statements include approximately 1.1 million shares related to options and restricted shares of Greenidge. |
Quarters Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 | 2020 | $ Amount | % Change | ||||||||||||
Total revenue |
$ | 16,176 | $ | 4,672 | $ | 11,504 | 246.2 | % | ||||||||
Cost of revenue (exclusive of depreciation and amortization shown below) |
4,724 | 2,582 | 2,142 | 83.0 | % | |||||||||||
Selling, general and administrative expenses |
4,565 | 1,189 | 3,376 | 283.9 | % | |||||||||||
Depreciation and amortization |
1,603 | 1,130 | 473 | 41.9 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Income (loss) from operations |
5,284 | (229 | ) | 5,513 | N/A | |||||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(202 | ) | — | (202 | ) | N/A | ||||||||||
Interest expense—related party |
— | (273 | ) | 273 | N/A | |||||||||||
Loss on sale of digital assets |
(154 | ) | (44 | ) | (110 | ) | 250.0 | % | ||||||||
Other expense, net |
(13 | ) | (25 | ) | 12 | -48.0 | % | |||||||||
|
|
|
|
|||||||||||||
Total other expense, net |
(369 | ) | (342 | ) | (27 | ) | 7.9 | % | ||||||||
|
|
|
|
|||||||||||||
Income (loss) before income taxes |
4,915 | (571 | ) | 5,486 | N/A | |||||||||||
Provision for income taxes |
(1,397 | ) | — | (1,397 | ) | N/A | ||||||||||
|
|
|
|
|||||||||||||
Net income (loss) |
$ | 3,518 | $ | (571 | ) | $ | 4,089 | N/A | ||||||||
|
|
|
|
|
|
Quarters Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Cryptocurrency mining |
$ | 14,064 | $ | 3,341 | $ | 10,723 | 321.0 | % | ||||||||
Power and capacity |
2,112 | 1,331 | 781 | 58.7 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ |
16,176 |
$ |
4,672 |
$ |
11,504 |
246.2 |
% | ||||||||
|
|
|
|
|
|
|
|
Quarters Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Cryptocurrency mining |
86.9 | % | 71.5 | % | ||||
Power and capacity |
13.1 | % | 28.5 | % | ||||
|
|
|
|
|||||
Total revenue |
100.0 |
% |
100.0 |
% | ||||
|
|
|
|
Quarters Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Cryptocurrency mining |
$ | 2,754 | $ | 1,362 | $ | 1,392 | 102.2 | % | ||||||||
Power and capacity |
1,970 | 1,220 | 750 | 61.5 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Total cost of revenue |
$ |
4,724 |
$ |
2,582 |
$ |
2,142 |
83.0 |
% | ||||||||
|
|
|
|
|
|
|
|
Quarters Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Selling, general and administrative expenses |
$ | 4,565 | $ | 1,189 | $ | 3,376 | 283.9 | % |
Quarters Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Depreciation and amortization |
$ | 1,603 | $ | 1,130 | $ | 473 | 41.9 | % |
Quarters Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Interest expense |
$ | (202 | ) | $ | — | $ | (202 | ) | N/A | |||||||
Interest expense—related party |
— | (273 | ) | 273 | N/A | |||||||||||
Loss on sale of digital assets |
(154 | ) | (44 | ) | (110 | ) | 250.0 | % | ||||||||
Other expense, net |
(13 | ) | (25 | ) | 12 | -48.0 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expense, net |
$ |
(369 |
) |
$ |
(342 |
) |
$ |
(27 |
) |
7.9 |
% | |||||
|
|
|
|
|
|
|
|
Quarters Ended June 30, |
||||||||
$ in thousands |
2021 |
2020 |
||||||
Income (loss) before income taxes |
$ | 4,915 | $ | (571 | ) | |||
Provision for income taxes |
$ | (1,397 | ) | $ | — | |||
Effective Tax Rate |
28.4 | % | 0.0 | % |
Six Months Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Total revenue |
$ | 27,239 | $ | 7,814 | $ | 19,425 | 248.6 | % | ||||||||
Cost of revenue (exclusive of depreciation and amortization shown below) |
9,146 | 4,609 | 4,537 | 98.4 | % | |||||||||||
Selling, general and administrative expenses |
8,060 | 2,638 | 5,422 | 205.5 | % | |||||||||||
Depreciation and amortization |
2,864 | 2,163 | 701 | 32.4 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Income (loss) from operations |
7,169 | (1,596 | ) | 8,765 | N/A | |||||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(368 | ) | — | (368 | ) | N/A | ||||||||||
Interest expense—related party |
(22 | ) | (540 | ) | 518 | -95.9 | % | |||||||||
Gain (loss) on sale of digital assets |
141 | (25 | ) | 166 | N/A | |||||||||||
Other income (expense), net |
6 | (16 | ) | 22 | N/A | |||||||||||
|
|
|
|
|
|
|||||||||||
Total other expense, net |
(243 | ) | (581 | ) | 338 | -58.2 | % | |||||||||
|
|
|
|
|
|
|||||||||||
Income (loss) before income taxes |
6,926 | (2,177 | ) | 9,103 | N/A | |||||||||||
Provision for income taxes |
(2,129 | ) | — | (2,129 | ) | N/A | ||||||||||
|
|
|
|
|
|
|||||||||||
Net income (loss) |
$ | 4,797 | $ | (2,177 | ) | $ | 6,974 | N/A | ||||||||
|
|
|
|
|
|
Six Months Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Cryptocurrency mining |
$ | 23,061 | $ | 5,630 | $ | 17,431 | 309.6 | % | ||||||||
Power and capacity |
4,178 | 2,184 | 1,994 | 91.3 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ |
27,239 |
$ |
7,814 |
$ |
19,425 |
248.6 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Cryptocurrency mining |
84.7 | % | 72.1 | % | ||||
Power and capacity |
15.3 | % | 27.9 | % | ||||
|
|
|
|
|||||
Total revenue |
100.0 |
% |
100.0 |
% | ||||
|
|
|
|
Six Months Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Cryptocurrency mining |
$ | 5,150 | $ | 1,939 | $ | 3,211 | 165.6 | % | ||||||||
Power and capacity |
3,996 | 2,670 | 1,326 | 49.7 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Total cost of revenue |
$ |
9,146 |
$ |
4,609 |
$ |
4,537 |
98.4 |
% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Selling, general and administrative expenses |
$ | 8,060 | $ | 2,638 | $ | 5,422 | 205.5 | % |
Six Months Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Depreciation and amortization |
$ | 2,864 | $ | 2,163 | $ | 701 | 32.4 | % |
Six Months Ended June 30, |
Increase (Decrease) |
|||||||||||||||
$ in thousands |
2021 |
2020 |
$ Amount |
% Change |
||||||||||||
Interest expense |
$ | (368 | ) | $ | — | $ | (368 | ) | N/A | |||||||
Interest expense—related party |
(22 | ) | (540 | ) | 518 | N/A | ||||||||||
Gain (loss) on sale of digital assets |
141 | (25 | ) | 166 | N/A | |||||||||||
Other income (expense), net |
6 | (16 | ) | 22 | N/A | |||||||||||
|
|
|
|
|
|
|||||||||||
Total other expense, net |
$ |
(243 |
) |
$ |
(581 |
) |
$ |
338 |
-58.2 |
% | ||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
$ in thousands |
2021 |
2020 |
||||||
Income (loss) before income taxes |
$ | 6,926 | $ | (2,177 | ) | |||
Provision for income taxes |
$ | (2,129 | ) | $ | — | |||
Effective Tax Rate |
30.7 | % | 0.0 | % |
Quarters Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
$ in thousands |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenue |
||||||||||||||||
Cryptocurrency mining |
$ | 14,064 | $ | 3,341 | $ | 23,061 | $ | 5,630 | ||||||||
Power and capacity |
$ | 2,112 | $ | 1,331 | $ | 4,178 | $ | 2,184 | ||||||||
Revenue per MWh |
||||||||||||||||
Cryptocurrency mining |
$ | 220 | $ | 106 | $ | 206 | $ | 115 | ||||||||
Power and capacity |
$ | 51 | $ | 25 | $ | 51 | $ | 25 | ||||||||
Cost of revenue (exclusive of depreciation and amortization) |
||||||||||||||||
Cryptocurrency mining |
$ | 2,754 | $ | 1,362 | $ | 5,150 | $ | 1,939 | ||||||||
Power and capacity |
$ | 1,970 | $ | 1,220 | $ | 3,996 | $ | 2,670 | ||||||||
Cost of revenue per MWh (exclusive of depreciation and amortization) |
||||||||||||||||
Cryptocurrency mining |
$ | 43 | $ | 43 | $ | 46 | $ | 40 | ||||||||
Power and capacity |
$ | 47 | $ | 23 | $ | 49 | $ | 31 | ||||||||
MWh |
||||||||||||||||
Cryptocurrency mining |
63,803 | 31,595 | 112,089 | 48,786 | ||||||||||||
Power and capacity |
41,747 | 53,045 | 82,075 | 86,574 |
Quarters Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
$ in thousands |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net income (loss) |
$ | 3,518 | $ | (571 | ) | $ | 4,797 | $ | (2,177 | ) | ||||||
Provision for income taxes |
1,397 | — | 2,129 | — | ||||||||||||
Interest expense, net |
202 | 273 | 390 | 540 | ||||||||||||
Depreciation and amortization |
1,603 | 1,130 | 2,864 | 2,163 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
6,720 | 832 | 10,180 | 526 | ||||||||||||
Stock-based compensation |
407 | — | 1,063 | — | ||||||||||||
Merger and public company filing related costs (1) |
938 | — | 1,248 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 8,065 | $ | 832 | $ | 12,491 | $ | 526 | ||||||||
|
|
|
|
|
|
|
|
(1) | Merger and public company filing costs relate to costs associated with the Merger, the corporate reorganization from an LLC, public registration of shares and associated costs. |
Total |
Less than 1 Year |
1-3 Years |
||||||||||
Notes payable (1) |
$ | 43,791 | $ | 20,798 | $ | 22,993 | ||||||
Equipment lease (2) |
$ | 680 | $ | 544 | $ | 136 | ||||||
Natural gas commitments (3) |
$ | 1,718 | $ | 1,718 | $ | — | ||||||
Purchase commitments (4) |
$ | 22,471 | $ | 22,471 | $ | — |
(1) | The Notes payable amounts presented in the above table include financed principal obligations plus estimated contractual future interest and risk premium payments. |
(2) | Equipment finance lease obligations include fixed monthly rental payments and exclude estimated revenue sharing payments. |
(3) | Represents off balance sheet arrangements to purchase gas through March 1, 2022. |
(4) | Represents miner purchase commitments as of June 30, 2021 |
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Net cash provided by operating activities |
$ | 9,402 | $ | 695 | ||||
Net cash used in investing activities |
(29,581 | ) | (8,913 | ) | ||||
Net cash provided by financing activities |
53,017 | — | ||||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
32,838 | (8,218 | ) | |||||
Cash and cash equivalents at beginning of year |
5,052 | 11,750 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 37,890 | $ | 3,532 |
• | have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
• | comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
• | submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency” |
• | 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. |
• | Bitcoin-Mining |
• | Independent Electric Generation |
February 2014: | GGH LLC acquired Greenidge Generation as an idled coal-fired facility. | |
October 2016: | Greenidge Generation received all required permits to restart the power plant as a natural gas facility after 2.5 years. | |
October 2016: | Commenced construction on an approximately 4.6 mile natural gas pipeline and coal-to-gas | |
March 2017: | Commenced commercial operations as a wholesale power generator. | |
April 2018: | Began test mining bitcoin. | |
May 2019: | Completed construction on an approximately 1 MW bitcoin mining pilot program. | |
July 2019: | Ordered 5,000 next-generation ASIC miners. | |
January 2020: | Commenced commercial bitcoin mining operations. | |
July 2020: | Launched full-service data center for blockchain services and added approximately 5 MW of customer-owned hosted mining. | |
November 2020: | Ordered and financed 6,000 additional next-generation ASIC miners. | |
March/April 2021: | Purchased and deployed approximately 745 miners and placed orders for an additional 4,200 miners to be deployed over the course of 2021 and 2022. | |
May 2021: | Ordered an additional 2,100 miners to be deployed over the course of 2021 and 2022 and committed to operate an entirely carbon neutral mining operation through the purchase of voluntary carbon offsets. | |
July 2021: | Purchased and deployed an additional 950 miners. | |
July 2021: | Greenidge signed a letter of intent to execute a 10-year lease for a facility in Spartanburg, South Carolina at which Greenidge intends to develop its next bitcoin mining operation, using existing electrical infrastructure at the location. | |
September 2021: | Acquisition of Support.com and public listing of our class A common stock. |
• | Capacity revenue : We receive capacity revenue for committing to sell power to the NYISO when dispatched. |
• | Energy revenue : When dispatched by the NYISO, we receive energy revenue based on the hourly price of power. |
• | Ancillary services revenue : When selected by the NYISO, we receive compensation for the provision of operating reserves. |
• | the cost of electricity; |
• | the efficiency of mining equipment; |
• | fluctuations in the price of bitcoin; and |
• | a miner’s proportionate share of the global hash rate. |
• | Bitfarms Technologies Ltd. (formerly Blockchain Mining Ltd.); |
• | DMG Blockchain Solutions Inc.; |
• | Digihost International, Inc.; |
• | Hive Blockchain Technologies Inc.; |
• | Hut 8 Mining Corp.; |
• | HashChain Technology, Inc.; |
• | MGT Capital Investments, Inc.; |
• | Layer1 Technologies, LLC; |
• | Marathon Patent Group, Inc.; |
• | Northern Data AG; |
• | Riot BlockChain, Inc.; and |
• | Cipher Mining / Good Works Acquisition Corp. |
• | Vertical integration |
• | Low power costs |
• | Bitcoin market upside |
• | Power market upside |
• | Self-reliance behind-the-meter |
• | Relatively stable regulatory environment low-cost power environments. |
• | Cryptocurrency experience low-cost ASIC mining computers of proven performance. |
• | Blue-chip backing |
• | Customer Support Solutions |
• | Technical Support Programs one-time purchase. Support also offers a subscription-based tech support service direct-to-consumers |
• | End-User Software® software is a malware protection and removal software product available for the Windows OS on personal computers and tablets. The software is licensed on an annual basis, and is sold direct to consumers and businesses, or through re-sellers. |
Department/Function |
Employees |
|||
Management |
8 | |||
Accounting/Finance |
2 | |||
Administration |
5 | |||
Operations |
28 | |||
|
|
|||
TOTALS |
43 |
|||
|
|
Name |
Age |
Position | ||||
Jeffrey Kirt |
48 | Chief Executive Officer and Director | ||||
Dale Irwin |
50 | President | ||||
Timothy Rainey |
35 | Chief Financial Officer | ||||
Timothy Fazio |
48 | Chairman | ||||
Ted Rogers |
51 | Vice Chairman | ||||
Andrew Bursky |
64 | Director | ||||
David Filippelli |
48 | Director | ||||
Jerome Lay |
32 | Director | ||||
Timothy Lowe |
62 | Director | ||||
Michael Neuscheler |
60 | Director | ||||
Daniel Rothaupt |
69 | Director |
• | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences); |
• | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; |
• | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; |
• | been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
• | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist |
• | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
• | independent director representation on our audit, compensation and nominating and corporate governance committees, when we can no longer or choose not to take advantage of the “controlled company” exemption outlined below, and regular “executive session” meetings of our independent directors without the presence of our corporate officers or non-independent directors; |
• | qualification of at least one of our directors as an “audit committee financial expert” as defined by the SEC; and |
• | adoption of other corporate governance best practices, including limits on the number of directorships held by our directors to prevent “overboarding” and implementation a robust director education program. |
• | appointing, compensating, retaining and oversighting the work of any registered public accounting firm engaged (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for Greenidge, and each such registered public accounting firm must report directly to the Audit Committee; |
• | selection and oversight of the Internal Auditor; |
• | reviewing and approving the appointment and replacement of the head of the internal auditing department; |
• | advising the head of the internal auditing department that he or she is expected to provide to the Audit Committee summaries of and, as appropriate, the significant reports to management prepared by the internal auditing department and management’s responses thereto; |
• | recommending and approving the compensation plan for the head of internal audit in consultation with management; |
• | advising management, the internal auditing department and the independent auditors that they are expected to provide to the Audit Committee a timely analysis of significant financial reporting issues and practices and significant internal audit controls and procedures; |
• | reviewing and approving the annual audit plan and audit fee submitted by the independent auditors and discussing with the independent auditors the overall approach to and scope of the audit examination with particular attention focused on those areas where either the Audit Committee, the Greenidge board, management or the independent auditors believe special emphasis is desirable; |
• | reviewing and discussing with the independent auditors and management the audited financial statements, the results of the audit and the independent auditors’ report or opinion on matters related to the performance of such audit; |
• | reviewing any other financial statements or reports, as requested by management or determined by the Audit Committee, which are required to be filed with any federal, state or local regulatory agency prior to filing with the appropriate regulatory body; |
• | reviewing and reassessing the adequacy of the Audit Committee charter on an annual basis, and make recommendations as to changed thereto as may be necessary or appropriate; and |
• | reporting its activities to the full Greenidge board on a regular basis, making such recommendations the Audit Committee deems necessary or appropriate. |
• | Making and approving all option grants and other issuances of our equity securities to our chief executive officer and other executive officers; |
• | Approving all other option grants and issuances of our equity securities as compensation, and recommending that our full board make and approve such grants and issuances; |
• | Establishing corporate and individual goals and objectives relevant to compensation of our chief executive officer and other executive officers, and evaluating each such officer’s performance in light of those goals and objectives and certifying achievement of such goals and objectives; |
• | Determining the compensation of our chief executive officer; |
• | Determining the compensation of the Chairman of our board and reviewing and making recommendations to our board regarding director compensation; |
• | Recommending the compensation of our executive officers (other than the chief executive officer) to our board for determination; |
• | Administering our cash and equity incentive plans; |
• | Preparing an annual compensation discussion and analysis for inclusion in our annual proxy statement in accordance with applicable SEC rules and regulations, which shall be prepared following discussion of thereof with our management; |
• | Reviewing and evaluating, at least annually, the Compensation Committee charter and the adequacy of the Compensation Committee charter, as well as the performance of the Compensation Committee; and |
• | Performing any other duties or responsibilities expressly delegated to the Compensation Committee by our board from time to time. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) (1) |
All Other Compensation ($) (2) |
Total ($) |
|||||||||||||||
Dale Irwin, President |
2020 | 180,000 | 58,451 | 2,807 | 241,258 | |||||||||||||||
Timothy Rainey, Chief Financial Officer |
2020 | 135,000 | 43,418 | 13,199 | 191,617 |
(1) | Reflects performance bonus payouts to the named executive officers. |
(2) | Includes the cost of health insurance premiums paid by us for Mr. Irwin, and health insurance and phone stipends and 401(k) matching contributions for Mr. Rainey. |
Name |
Grant Date |
Number of Securities Underlying Unexercised Options Exercisable (#) |
Number of Securities Underlying Unexercised Options Unexercisable (#) |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) (1) |
Option Expiration Date |
Number of shares or units of stock that have not vested (#) |
Market value of shares or units of stock that have not vested ($) (2) |
||||||||||||||||||||||||
Jeffrey Kirt (3) |
3/8/2021 | — | — | — | — | — | 344,800 | 2,155,000 | ||||||||||||||||||||||||
Dale Irwin |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Timothy Rainey (4) |
2/21/2021 | 257,484 | 128,740 | — | 5.80 | 2/21/2031 | — | — |
(1) | The share numbers and option exercise price shown in this table reflect the 4-to-1 |
(2) | For purposes of this table, the market value of unvested restricted stock units is determined by multiplying the number of unvested restricted stock units by the assumed price of $6.25 per share. |
(3) | Mr. Kirt’s restricted stock units vest ratably over three years on an annual basis, subject to Mr. Kirt’s continued service on each applicable vesting date. |
(4) | The stock options granted to Mr. Rainey vest as follows: (i) 257,484 options vested on the grant date and (ii) the remaining options vest on the first anniversary of the grant date, subject to Mr. Rainey’s continued service on the applicable vesting date. |
Name |
Fees Earned or Paid in Cash ($) (1) |
Stock Awards ($) |
Option Awards ($) |
Non-equity incentive plan compensation ($) |
Nonqualified deferred compensation earnings ($) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
Timothy Fazio |
— | — | — | |||||||||||||||||||||||||
Andrew M. Bursky |
— | — | — | |||||||||||||||||||||||||
Timothy Lowe |
— | — | — | |||||||||||||||||||||||||
Daniel Rothaupt |
53,108 | — | 53,108 | |||||||||||||||||||||||||
David Filippelli |
— | — | — | |||||||||||||||||||||||||
Jerome Lay |
— | — | — |
(1) | Reflects fees paid for director duties provided by Mr. Rothaupt as part of an arrangement between Atlas and/or its affiliates and us. |
• | each of our directors and named executive officers; |
• | all directors and named executive officers as a group; and |
• | each person who is known by us to beneficially own 5% or more of our outstanding common stock. |
Amount of Beneficial Ownership |
||||||||||||||||
Name and Address of Beneficial Owner |
Class A Common Stock |
Class B Common Stock |
Percent Ownership (1)(2) |
Percent Voting Power (2)(3) |
||||||||||||
Atlas Capital Resources (A9) LP |
0 | 19,202,652 | 49.7% | 64.0% | ||||||||||||
Atlas Capital Resources (A9-Parallel) LP |
0 | 6,895,120 | 17.8% | 23.0% | ||||||||||||
Atlas Capital Resources (P) LP |
0 | 702,528 | 1.8% | 2.3% | ||||||||||||
Jeffrey Kirt, Chief Executive Officer (4) |
8,000 | 0 | * | * | ||||||||||||
Dale Irwin, President |
0 | 772,444 | 2.0% | 2.6% | ||||||||||||
Timothy Rainey, Chief Financial Officer (5) |
257,484 | 0 | * | * | ||||||||||||
Timothy Fazio, Chairman (6) |
0 | 26,800,300 | 69.3% | 89.3% | ||||||||||||
Ted Rogers, Vice Chairman |
0 | 160,000 | * | * | ||||||||||||
Andrew M. Bursky, Director (6) |
0 | 26,800,300 | 69.3% | 89.3% | ||||||||||||
Jerome Lay, Director |
0 | 0 | * | * | ||||||||||||
Timothy Lowe, Director |
0 | 71,208 | * | * | ||||||||||||
Michael Neuscheler, Director |
0 | 0 | * | * | ||||||||||||
Daniel Rothaupt, Director |
0 | 142,420 | * | * | ||||||||||||
David Filippelli, Director |
0 | 0 | * | * | ||||||||||||
All officers and directors as a group (11 persons named above) |
265,484 | 27,946,372 | 72.96% | 93.23% |
* | Less than 1% |
(1) | Based on 9,627,705 shares of class A common stock outstanding plus 29,040,000 shares of class B common stock outstanding. |
(2) | Does not reflect any issuances of class A common stock under the Purchase Agreement or the shares of class A common stock registered under this prospectus. |
(3) | Based on 9,627,705 shares of class A common stock outstanding plus 29,040,000 shares of class B common stock outstanding. Each share of Class A common stock is entitled to one vote per share and each share of class B common stock is entitled to ten votes per share. |
(4) | Consists of 8,000 shares of class A common stock held by Kirt Family 2021 Irrevocable Trust. Scott Elsberry is the trustee of the trust and has sole voting and investment power over the securities held by the trust. Mr. Elsberry disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The address for the trust is c/o Brody Wilkinson PC 2507 Post Road, Southport, CT 06890. |
(5) | Consists of 257,484 shares of class A common stock which Mr. Rainey has the right to acquire within 60 days through the exercise of vested options. |
(6) | Consists of 19,202,652 shares of class B common stock held by Atlas Capital Resources (A9) LP, 6,895,120 shares of class B common stock held by Atlas Capital Resources (A9-Parallel) LP, 702,528 shares of class B common stock held by Atlas Capital Resources (P) LP. Timothy Fazio and Andrew Bursky, through their executive capacities in each of these entities, have shared voting and investment power over the securities held by these entities. Mr. Fazio and Mr. Bursky each disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The address for Messrs. Fazio and Bursky is c/o Atlas Holdings LLC, 100 Northfield Street, Greenwich, CT 06830. |
Name of Selling Stockholder |
Number of Shares of Class A Common Stock Owned Prior to Offering |
Maximum Number of Shares of Class A Common Stock to be Offered Pursuant to this Prospectus |
Number of Shares of Class A Common Stock Owned After Offering |
|||||||||||||||||
Number (1) |
Percent |
Number (2) |
Percent |
|||||||||||||||||
B. Riley Principal Capital, LLC (3) |
0 | — | 3,500,000 | 0 | — |
(1) | In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the offering all of the shares that the Selling Stockholder may be required to purchase under the Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to conditions contained in the Purchase Agreement, the satisfaction of which are outside of the Selling Stockholder’s control, including the registration statement that includes this prospectus becoming and remaining effective. Furthermore, the VWAP Purchases of class A common stock are subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement prohibits us from issuing and selling any shares of our class A common stock to the Selling Stockholder to the extent such shares, when aggregated with all other shares of our class A common stock then beneficially owned by the Selling Stockholder, would cause the Selling Stockholder to beneficially |
own shares of class A common stock in excess of the Beneficial Ownership Cap. The Purchase Agreement also prohibits us from issuing or selling shares of class A common stock under the Purchase Agreement in excess of the Exchange Cap, unless we obtain stockholder approval to do so in accordance with applicable Nasdaq rules. Neither the Beneficial Ownership Limitation nor the Exchange Cap (to the extent applicable under Nasdaq rules) may be amended or waived under the Purchase Agreement. |
(2) | Assumes the resale by the Selling Stockholder of all shares being offered pursuant to this prospectus. |
(3) | The business address of B. Riley Principal Capital, LLC (“BRPC”) is 11100 Santa Monica Blvd., Suite 800, Los Angeles, CA 90025. BRPC’s principal business is that of a private investor. Daniel Shribman and Nick Capuano are the President and Chief Investment Officer, respectively, of BRPC. The sole member of BRPC is B. Riley Principal Investments, LLC (“BRPI”), which is an indirect subsidiary of B. Riley Financial, Inc. (“BRF”). Mr. Shribman is the President of BRPI and the Chief Investment Officer of BRF. Mr. Shribman has sole voting power and sole investment power over securities beneficially owned, directly, by BRPC, and therefore Mr. Shribman may be deemed to beneficially own, indirectly, the securities beneficially owned, directly, by BRPC. The sole voting and investment powers of Mr. Shribman over securities beneficially owned directly by BRPC are exercised independently from all other direct and indirect subsidiaries of BRF, and the voting and investment powers over securities beneficially owned directly or indirectly by all other direct and indirect subsidiaries of BRF are exercised independently from BRPC. We have been advised that neither BRPI nor BRPC is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent broker-dealer. The foregoing should not be construed in and of itself as an admission by Mr. Shribman as to beneficial ownership of the securities beneficially owned, directly, by BRPC. |
• | 1% of the total number of shares of our class A common stock then outstanding; or |
• | the average weekly reported trading volume of our class A common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust, if (1) a U.S. court is able to exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of the Code) has the authority to control all of the trust’s substantial decisions, or (2) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person. |
• | a Non-U.S. Holder that is a financial institution, insurance company, regulated investment company, tax-exempt organization, pension plan, broker, dealer or trader in stocks, securities or currencies, U.S. expatriate, controlled foreign corporation or passive foreign investment company; |
• | a Non-U.S. Holder holding common stock as part of a conversion, constructive sale, wash sale or other integrated transaction or a hedge, straddle or synthetic security; |
• | a Non-U.S. Holder whose functional currency is not the U.S. dollar; |
• | a Non-U.S. Holder that holds or receives common stock pursuant to the exercise of any employee stock option or otherwise as compensation; or |
• | a Non-U.S. Holder that at any time owns, directly, indirectly or constructively, 5% or more of our outstanding common stock. |
• | the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States and, if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States; in these cases, the Non-U.S. Holder will be taxed on a net income basis at the same U.S. federal income tax rates applicable to United States persons (as defined in the Code), and if the Non-U.S. Holder is a foreign corporation, an additional branch profits tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty, may also apply; |
• | the Non-U.S. Holder is a nonresident alien present in the United States for 183 days or more in the taxable year of the disposition and certain other requirements are met, in which case the Non-U.S. Holder will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty) on the net gain derived from the disposition, which may be offset by U.S.-source capital losses of the Non-U.S. Holder, if any; provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses; or |
• | if we were a “United States real property holding corporation,” the Non-U.S. Holder actually or constructively owns more than five percent of our common stock at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. Holder held our common stock, provided that our common stock is “regularly traded on an established securities market,” within the meaning of Section 897 of the Code and applicable Treasury Regulations, during the calendar year in which the sale or other disposition occurs. |
• | ordinary brokers’ transactions; |
• | transactions involving cross or block trades; |
• | through brokers, dealers, or underwriters who may act solely as agents; |
• | “at the market” into an existing market for our class A common stock; |
• | in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents; |
• | in privately negotiated transactions; or |
• | any combination of the foregoing. |
Page |
||||
F-2 |
||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-22 |
||||
F-23 | ||||
F-24 | ||||
F-25 | ||||
F-26 | ||||
F-27 | ||||
F-28 | ||||
F-43 |
||||
F-44 | ||||
F-45 | ||||
F-46 | ||||
F-47 | ||||
F-48 | ||||
F-49 | ||||
F-66 |
||||
F-67 | ||||
F-69 | ||||
F-70 | ||||
F-71 | ||||
F-72 | ||||
F-73 | ||||
F-74 |
June 30, 2021 |
December 31, 2020 |
|||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Digital assets |
||||||||
Accounts receivable |
||||||||
Fuel deposits |
||||||||
Prepaid expenses |
||||||||
Emissions credits |
||||||||
Carbon offset credits |
||||||||
Miner equipment deposits |
||||||||
Total current assets |
||||||||
LONG-TERM ASSETS: |
||||||||
Property and equipment, net |
||||||||
Right-of-use assets |
— | |||||||
Other long-term assets |
||||||||
Total assets |
$ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Accounts payable |
$ | $ | ||||||
Natural gas payable |
||||||||
Accrued emissions expense |
||||||||
Income taxes payable |
— | |||||||
Accrued expenses |
||||||||
Accrued interest expense —related party |
— | |||||||
Deferred revenue |
||||||||
Notes payable, current portion |
||||||||
Notes payable—related party |
— | |||||||
Finance lease obligation, current portion |
— | |||||||
Total current liabilities |
||||||||
LONG-TERM LIABILITIES: |
||||||||
Deferred tax liability |
— | |||||||
Notes payable, net of current portion |
||||||||
Finance lease obligation, net of current portion |
— | |||||||
Asset retirement obligations |
||||||||
Environmental trust liability |
||||||||
Total liabilities |
||||||||
COMMITMENTS AND CONTINGENCIES (NOTE 11) |
||||||||
STOCKHOLDERS’ EQUITY: |
||||||||
Preferred stock, par value $ |
||||||||
Common stock, par value $ |
||||||||
Additional paid-in capital |
||||||||
Members’ capital, and December 31, 2020, respectively |
— |
|||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
REVENUE: |
||||||||||||||||
Cryptocurrency mining |
$ | $ | $ | $ | ||||||||||||
Power and capacity |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
||||||||||||||||
OPERATING COSTS AND EXPENSES |
||||||||||||||||
Cost of revenue — crypt |
||||||||||||||||
Cost of revenue—power and capacity (exclusive of depreciation and amortization shown below) |
||||||||||||||||
Selling, general and administrative |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
( |
) | ( |
) | ||||||||||||
OTHER INCOME (EXPENSE), NET: |
||||||||||||||||
Interest expense |
( |
) | — | ( |
) | — | ||||||||||
Interest expense—related party |
— | ( |
) | ( |
) | ( |
) | |||||||||
Loss (gain) on sale of digital assets |
( |
) | ( |
) | ( |
) | ||||||||||
Other (expense) income, net |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
( |
) | ( |
) | ||||||||||||
Provision for income taxes |
( |
) | — | ( |
) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCOME (LOSS) AND TOTAL COMPREHENSIVE INCOME (LOSS) |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | $ | ||||||||||||||
Diluted |
$ | $ |
Additional Paid—In Capital |
Common Units |
Preferred Units |
Senior Priority Units |
Total Members’ Capital |
Accumulated Deficit |
Total |
||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Number of Units |
Members’ Capital |
Number of Units |
Members’ Capital |
Number of Units |
Members’ Capital |
|||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 |
— | $ | — | — | $ | — | $ | — | $ | — | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||||||||||||||
Contribution of Preferred Units, Senior Priority Units, and notes payable to related party for GGHI Common Stock |
— | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | |||||||||||||||||||||||||||||||||||||||||
Contribution of GGH Common Units for GGHI Common Stock |
— | — | — | — | ( |
) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance preferred stock, net of stock issuance costs of $ |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensati o nexpense |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Proceeds from stock options exercised |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock issued to purchase miners |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Balance at March 31, 2021 |
$ | $ | $ | — | $ | — | — | $ | — | — | $ | — | $ | — | $ | ( |
) | $ | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Balance at June 30, 2021 |
$ | $ | $ | — | $ | — | — | $ | — | — | $ | — | $ | — | $ | ( |
) | $ | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Additional Paid—In Capital |
Common Units |
Preferred Units |
Senior Priority Units |
Total Members’ Capital |
Accumulated Deficit |
Total |
||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Number of Units |
Members’ Capital |
Number of Units |
Members’ Capital |
Number of Units |
Members’ Capital |
|||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 |
— | $ | — | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Balance at March 31, 2020 |
— | $ | — | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Balance at June 30, 2020 |
— | $ | — | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
CASH FLOW FROM OPERATING ACTIVITIES: |
||||||||
Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income (loss) to net cash flow from operating activities: |
||||||||
Depreciation and amortization |
||||||||
Deferred income taxes |
— | |||||||
Accretion of asset retirement obligations |
||||||||
(Loss) gain on sale of digital assets |
( |
) | ||||||
Stock-based compensation expense |
— | |||||||
Loss on environmental trust liability |
— | |||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
||||||||
Emissions credits/carbon offsets |
||||||||
Prepaids and other assets |
( |
) | ( |
) | ||||
Accounts payable |
( |
) | ( |
) | ||||
Income taxes payable |
— | |||||||
Accrued emissions |
( |
) | ||||||
Accrued expenses |
||||||||
|
|
|
|
|||||
Net cash flow provided by operating activities |
||||||||
|
|
|
|
|||||
CASH FLOW FROM INVESTING ACTIVITIES: |
||||||||
Purchases of property and equipment |
( |
) | ( |
) | ||||
Deposits on miner equipment |
( |
) | — | |||||
Project deposit |
||||||||
|
|
|
|
|||||
Net cash flow used in investing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
CASH FLOW FROM FINANCING ACTIVITIES: |
||||||||
Proceeds from issuance of preferred stock, net of issuance costs |
— | |||||||
Proceeds from stock options exercised |
— | |||||||
Proceeds from notes payable |
— | |||||||
Principal payments on notes payable |
( |
) | — | |||||
Proceeds from finance lease obligations |
— | |||||||
Repayments of capital lease obligations |
( |
) | — | |||||
|
|
|
|
|||||
Net cash flow provided by financing activities |
— | |||||||
|
|
|
|
|||||
CHANGE IN CASH AND CASH EQUIVALENTS |
( |
) | ||||||
CASH AND CASH EQUIVALENTS—beginning of year |
||||||||
|
|
|
|
|||||
CASH AND CASH EQUIVALENTS—end of period |
$ | $ | ||||||
|
|
|
|
1. |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
• | Greenidge (a Delaware corporation). Greenidge was formed in 2021 to oversee and manage the following entities: |
• | Greenidge Generation Blocker Inc. (“GGB”), a Delaware corporation and a wholly owned subsidiary of Greenidge |
• | Greenidge Generation Holdings LLC (“GGH”), a Delaware limited liability company and a wholly owned subsidiary of Greenidge |
• | Greenidge Generation, LLC (“GG”), a New York limited liability company and a wholly owned subsidiary of Greenidge |
• | Lockwood Hills, LLC (“LH”), a New York limited liability company and a wholly owned subsidiary of Greenidge |
• | Greenidge Solar, LLC (“GS”), a Delaware limited liability company and a wholly owned subsidiary of Greenidge |
• | Greenidge Pipeline, LLC (“GP”), a Delaware limited liability company and a wholly owned subsidiary of Greenidge |
• | Greenidge Pipeline Properties Corporation (“GPP”), a New York Corporation and a wholly owned subsidiary of Greenidge |
• | Greenidge Markets and Trading, LLC (“GMT”), a Delaware limited liability company and a wholly owned subsidiary of Greenidge |
• | Greenidge Secured Lending, LLC (“SL”), a Delaware limited liability company and a wholly owned subsidiary of Greenidge |
• | Greenidge Blocker Corp. (“Blocker”), a Delaware corporation and a consolidated variable interest entity |
• | Greenidge Coin, LLC (“GC”), a Delaware limited liability company and a wholly owned subsidiary of Greenidge. In January 2021, GC merged into GG and GC was subsequently dissolved. |
1. |
ORGANIZATION AND DESCRIPTION OF BUSINESS (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
3. |
PROPERTY AND |
Estimated Useful Lives |
June 30, 2021 |
December 31, 2020 |
||||||||||
Plant infrastructure |
$ | $ | ||||||||||
Miners |
||||||||||||
Miner facility infrastructure |
||||||||||||
Land |
N/A | |||||||||||
Equipment |
||||||||||||
Software |
||||||||||||
Coal ash impoundment |
||||||||||||
Construction in process |
N/A | |||||||||||
|
|
|
|
|||||||||
Less: Accumulated depreciation |
( |
) | ( |
) | ||||||||
|
|
|
|
|||||||||
$ | $ | |||||||||||
|
|
|
|
3. |
PROPERTY AND EQUIPMENT (Continued) |
4. |
NOTES PAYABLE |
Interest Rate |
Initial Financing |
Balance as of: |
||||||||||||||||||||||
Note |
Loan Date |
Maturity Date |
June 30, 2021 |
December 31, 2020 |
||||||||||||||||||||
A |
% | $ | $ | $ | ||||||||||||||||||||
B |
% | |||||||||||||||||||||||
C |
% | — | ||||||||||||||||||||||
D |
% | — | ||||||||||||||||||||||
E – H |
% | — | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Less: Current portion |
|
( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
$ | $ | |||||||||||||||||||||||
|
|
|
|
5. |
FINANCE LEASE |
6. |
RELATED PARTY TRANSACTIONS |
6. |
RELATED PARTY TRANSACTIONS (Continued) |
June 30, 2021 |
December 31, 2020 |
|||||||
Note payable to a related party due June 2021 |
$ | $ | ||||||
Note payable to a related party due May 2021 |
||||||||
|
|
|
|
|||||
$ | $ | |||||||
Less: Current Portion |
$ | $ | ( |
) | ||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
6. |
RELATED PARTY TRANSACTIONS (Continued) |
7. |
STOCKHOLDERS’ EQUITY |
7. |
STOCKHOLDERS’ EQUITY (Continued) |
7. |
STOCKHOLDERS’ EQUITY (Continued) |
8. |
EQUITY BASED COMPENSATION |
RSUs |
Weighted Average Grant Date Fair Value |
|||||||
Unvested at December 31, 2020 |
$ | |||||||
Granted |
||||||||
|
|
|||||||
Unvested at June 30, 2021 |
Options |
Weighted Average Exercise Price per Share |
Weighted Average Remaining Contractual Life (in years) |
||||||||||
Outstanding at December 31, 2020 |
$ | — | ||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
|
|
|||||||||||
Outstanding at June 30, 202 1 |
||||||||||||
Options vested and expected to vest as of June 30, 2021 |
||||||||||||
Options vested and exercisable as of June 30, 2021 |
$ |
8. |
EQUITY BASED COMPENSATION (Continued) |
Weighted Average fair value of grants |
$ | |||
Expected volatility |
% | |||
Expected term (years) |
||||
Risk-free interest rate |
% | |||
Expected dividend yield |
% |
9. |
INCOME TAXES |
10. |
EARNINGS PER SHARE |
Three Months Ended June 30, 2021 |
Six Months Ended June 30, 2021 |
|||||||
Numerator |
||||||||
Net income |
$ | $ | ||||||
Less: Net income attributable to the member units before the reorganization |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net income attributable to Greenidge |
$ | $ | ||||||
Denominator |
||||||||
Basic weighted average shares outstanding |
||||||||
Dilutive effect of equity awards |
||||||||
Dilutive effect of convertible preferred stock |
||||||||
|
|
|
|
|||||
Diluted weighted average shares outstanding |
||||||||
Earnings per share |
||||||||
Basic |
$ | $ | ||||||
Diluted |
$ | $ |
11. |
COMMITMENTS AND CONTINGENCIES |
12. |
CONCENTRATIONS |
13. |
OTHER RISKS AND CONSIDERATIONS |
14. |
SUBSEQUENT EVENTS |
2020 | 2019 | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Digital assets |
||||||||
Accounts receivable |
||||||||
Fuel deposits |
||||||||
Prepaid expenses |
||||||||
Emissions credits |
||||||||
Miner equipment deposits |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
LONG-TERM ASSETS: |
||||||||
Property and equipment, net of accumulated depreciation of $ |
||||||||
Project deposit |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES AND MEMBERS’ EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Accounts payable |
$ | $ | ||||||
Natural gas payable |
||||||||
Accrued emissions expense, current portion |
||||||||
Accrued expenses |
||||||||
Accrued interest expense—related party, current portion |
||||||||
Deferred revenue |
— | |||||||
Note payable, current portion |
— | |||||||
Notes payable—related party, current portion |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
COMMITMENTS AND CONTINGENCIES (NOTE 8) |
||||||||
LONG-TERM LIABILITIES: |
||||||||
Accrued emissions expense, net of current portion |
— | |||||||
Accrued interest expense—related party, net of current portion |
— | |||||||
Notes payable, net of current portion |
— | |||||||
Notes payable—related party, net of current portion |
— | |||||||
Asset retirement obligations |
||||||||
Environmental trust liability |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
MEMBERS’ EQUITY: |
||||||||
Members’ capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total members’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and members’ equity |
$ | $ | ||||||
|
|
|
|
2020 | 2019 | |||||||
REVENUE: |
||||||||
Cryptocurrency mining |
$ | $ | ||||||
Power and capacity |
||||||||
|
|
|
|
|||||
Total revenue |
||||||||
OPERATING COSTS AND EXPENSES |
||||||||
Cost of revenue-cryptocurrency mining (exclusive of depreciation and amortization shown below) |
||||||||
Cost of revenue-power and capacity (exclusive of depreciation and amortization shown below) |
||||||||
Selling, general, and administrative expenses |
||||||||
Depreciation and amortization |
||||||||
|
|
|
|
|||||
Loss from operations |
( |
) | ( |
) | ||||
|
|
|
|
|||||
OTHER INCOME (EXPENSE), NET: |
||||||||
Impairment loss on digital assets |
— | ( |
) | |||||
Interest expense |
( |
) | — | |||||
Interest expense - related party |
( |
) | ( |
) | ||||
Gain on sale of digital assets |
— | |||||||
Gain (loss) on environmental trust liability |
( |
) | ||||||
Other income and expense |
||||||||
|
|
|
|
|||||
Total other expense, net |
( |
) | ( |
) | ||||
|
|
|
|
|||||
NET LOSS |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Common Units |
Preferred Units |
Senior Priority Units |
Total Members’ Capital |
|||||||||||||||||||||||||||||||||
Number of Units |
Members’ Capital |
Number of Units |
Members’ Capital |
Number of Units |
Members’ Capital |
Accumulated Deficit |
Total |
|||||||||||||||||||||||||||||
Balance at January 1, 2019 |
$ | — | $ | $ | — | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||
Proceeds from sale of Greenidge Coin, LLC preferred units |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2019 |
— | — | ( |
) | ||||||||||||||||||||||||||||||||
Conversion of notes payable to senior priority units—tranche 1 |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Deemed distribution of Greenidge Coin, LLC preferred units |
— | — | — | — | — | ( |
) | — | ||||||||||||||||||||||||||||
Purchase and contribution of Greenidge Coin, LLC preferred units |
— | — | ( |
) | ( |
) | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2020 |
$ | — | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 | 2019 | |||||||
CASH FLOW FROM OPERATING ACTIVITIES: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash flow from operating activities: |
||||||||
Depreciation |
||||||||
Accretion of asset retirement obligation |
— | |||||||
Loss (gain) on environmental trust liability |
( |
) | ||||||
Gain on sale of digital assets |
( |
) | — | |||||
Impairment loss on digital assets |
— | |||||||
Changes in: |
||||||||
Digital assets |
( |
) | ( |
) | ||||
Accounts receivable |
( |
) | ||||||
Fuel deposits |
( |
) | ||||||
Prepaid expenses |
( |
) | ||||||
Emissions credits |
( |
) | ( |
) | ||||
Other assets |
( |
) | ||||||
Accounts payable |
( |
) | ( |
) | ||||
Natural gas payable |
||||||||
Accrued emissions |
||||||||
Accrued expenses |
( |
) | ||||||
Accrued interest expense—related party |
||||||||
Deferred revenue |
— | |||||||
|
|
|
|
|||||
Net cash flow from operating activities |
( |
) | ||||||
|
|
|
|
|||||
CASH FLOW FROM INVESTING ACTIVITIES: |
||||||||
Purchases of property and equipment |
( |
) | ( |
) | ||||
Deposits on miner equipment |
( |
) | ( |
) | ||||
Project deposit |
— | |||||||
|
|
|
|
|||||
Net cash flow from investing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
CASH FLOW FROM FINANCING ACTIVITIES: |
||||||||
Proceeds from sale of Greenidge Coin, LLC preferred units |
— | |||||||
Repayments on notes payable |
( |
) | — | |||||
Borrowings on notes payable—related party |
||||||||
|
|
|
|
|||||
Net cash flow from financing activities |
||||||||
|
|
|
|
|||||
CHANGE IN CASH AND CASH EQUIVALENTS |
( |
) | ||||||
CASH AND CASH EQUIVALENTS—beginning of year |
||||||||
|
|
|
|
|||||
CASH AND CASH EQUIVALENTS—end of year |
$ | $ | ||||||
|
|
|
|
|||||
SUPPLEMENTAL DISCLOSURES: CASH PAID FOR INTEREST |
$ | $ | — | |||||
|
|
|
|
|||||
NON-CASH INVESTING AND FINANCING TRANSACTIONS: |
||||||||
Miner deposits moved into property and equipment |
$ | $ | — | |||||
|
|
|
|
|||||
Project deposits moved into property and equipment |
$ | $ | — | |||||
|
|
|
|
|||||
Property and equipment purchases financed with note payable |
$ | $ | — | |||||
|
|
|
|
|||||
Property and equipment purchases in accounts payable |
$ | $ | ||||||
|
|
|
|
|||||
Property and equipment purchased with digital assets |
$ | $ | — | |||||
|
|
|
|
|||||
Initial recognition of asset retirement obligations |
$ | — | $ | |||||
|
|
|
|
|||||
Notes payable principal converted to members’ equity |
$ | $ | — | |||||
|
|
|
|
|||||
Notes payable accrued interest converted to members’ equity |
$ | $ | — | |||||
|
|
|
|
|||||
Deemed distribution of Greenidge Coin, LLC preferred units |
$ | $ | — | |||||
|
|
|
|
|||||
Contribution of Greenidge Coin, LLC preferred units |
$ | $ | — | |||||
|
|
|
|
1. |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
• | Greenidge Generation Holdings LLC (“GGH”, a Delaware limited liability company). GGH was formed in 2014 to oversee and manage the following entities: |
• | Greenidge Generation LLC (“GG”, a New York limited liability company, wholly-owned subsidiary of GGH); |
• | Lockwood Hills LLC (“LH”, a New York limited liability company, wholly-owned subsidiary of GGH); |
• | Greenidge Solar LLC (“GS”, a Delaware limited liability company, wholly-owned subsidiary of GGH); |
• | Greenidge Pipeline LLC (“GP”, a Delaware limited liability company, wholly-owned subsidiary of GGH); |
• | Greenidge Pipeline Properties Corporation (“GPP”, a New York Corporation, wholly-owned subsidiary of GGH); |
• | Greenidge Markets and Trading LLC (“GMT”, a Delaware limited liability company, wholly-owned subsidiary of GGH); |
• | Greenidge Secured Lending LLC (“SL”, a Delaware limited liability company, wholly-owned subsidiary of GGH); |
• | Greenidge Blocker Corp. (“Blocker”, a Delaware corporation, consolidated variable interest entity); and |
• | Greenidge Coin, LLC (“GC”, a Delaware limited liability company, wholly-owned subsidiary of GGH). |
1. |
ORGANIZATION AND DESCRIPTION OF BUSINESS (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Coal Ash Pond |
||||
Balance at January 1, 2019 |
$ | |||
Initial recognition |
||||
|
|
|||
Balance at December 31, 2019 |
||||
Accretion |
||||
|
|
|||
Balance at December 31, 2020 |
$ | |||
|
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
• | Step 1: Identify the contract, or contracts, with the customer; |
• | Step 2: Identify the performance obligations in the contract; |
• | Step 3: Determine the transaction price; |
• | Step 4: Allocate the transaction price to the performance obligations in the contract; and |
• | Step 5: Recognize revenue when, or as, the Company satisfies a performance obligation. |
• | Variable consideration; |
• | Constraining estimates of variable consideration; |
• | The existence of a significant financing component in the contract; |
• | Noncash consideration; and |
• | Consideration payable to a customer. |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
3. |
PROPERTY AND EQUIPMENT |
Estimated Useful Lives |
2020 |
2019 |
||||||||||
Plant infrastructure |
– years |
$ | $ | |||||||||
Miners |
$ | — | ||||||||||
Miner Facility |
— | |||||||||||
Land |
N/A | |||||||||||
Equipment |
||||||||||||
Software |
||||||||||||
Coal ash impoundment |
||||||||||||
Construction in process |
N/A | |||||||||||
|
|
|
|
|||||||||
Less: Accumulated depreciation |
( |
) | ( |
) | ||||||||
|
|
|
|
|||||||||
$ | $ | |||||||||||
|
|
|
|
3. |
PROPERTY AND EQUIPMENT (Continued) |
4. |
NOTES PAYABLE |
Miner equipment note A |
$ | |||
Miner equipment note B |
||||
|
|
|||
Less: Current portion |
( |
) | ||
|
|
|||
$ | ||||
|
|
2021 |
$ | |||
2022 |
||||
|
|
|||
$ | ||||
|
|
5. |
RELATED PARTY TRANSACTIONS |
5. |
RELATED PARTY TRANSACTIONS (Continued) |
2020 | 2019 | |||||||
Note payable to a related party with interest at 8% per annum. All outstanding principal and accrued but unpaid interest is due June 2021. |
$ | $ | ||||||
Note payable to a related party with interest at 8% per annum. All outstanding principal and accrued but unpaid interest is due May 2021. |
||||||||
Notes payable converted into Senior Priority Units—Tranche 1 (see Note 6). |
||||||||
|
|
|
|
|||||
Less: Current portion |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
5. |
RELATED PARTY TRANSACTIONS (Continued) |
6. |
MEMBERS’ EQUITY |
6. |
MEMBERS’ EQUITY (Continued) |
7. |
EMPLOYEE BENEFIT PLAN |
8. |
COMMITMENTS AND CONTINGENCIES |
9. |
CONCENTRATIONS |
10. |
OTHER RISKS AND CONSIDERATIONS |
11. |
SUBSEQUENT EVENTS |
11. |
SUBSEQUENT EVENTS (Continued) |
June 30, 2021 |
December 31, 2020 |
|||||||
(unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 32,295 | $ | 13,526 | ||||
Short-term investments |
6,201 | 16,441 | ||||||
Accounts receivable, net |
5,470 | 6,975 | ||||||
Prepaid expenses and other current assets |
601 | 670 | ||||||
|
|
|
|
|||||
Total current assets |
44,567 | 37,612 | ||||||
Property and equipment, net |
1,043 | 1,115 | ||||||
Right-of-use |
12 | 61 | ||||||
Other assets |
383 | 478 | ||||||
|
|
|
|
|||||
Total assets |
$ | 46,005 | $ | 39,266 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 242 | $ | 366 | ||||
Accrued compensation |
2,192 | 1,735 | ||||||
Other accrued liabilities |
1,216 | 879 | ||||||
Short-term lease liability |
12 | 58 | ||||||
Short-term deferred revenue |
1,189 | 881 | ||||||
|
|
|
|
|||||
Total current liabilities |
4,851 | 3,919 | ||||||
Other long-term liabilities |
907 | 911 | ||||||
|
|
|
|
|||||
Total liabilities |
5,758 | 4,830 | ||||||
|
|
|
|
|||||
Stockholders’ equity: |
||||||||
Common stock; par value $0.0001, 50,000 shares authorized; 24,572 issued and 24,220 outstanding at June 30, 2021 and 19,973 issued and 19,490 outstanding at December 31, 2020 |
3 | 2 | ||||||
Additional paid-in capital |
259,620 | 250,954 | ||||||
Treasury stock, at cost (483 shares at March 31, 2021 and December 31, 2020) |
(5,297 | ) | (5,297 | ) | ||||
Accumulated other comprehensive loss |
(2,482 | ) | (2,419 | ) | ||||
Accumulated deficit |
(211,597 | ) | (208,804 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
40,247 | 34,436 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | 46,005 | $ | 39,266 | ||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenue: |
||||||||||||||||
Services |
$ | 7,979 | $ | 10,606 | $ | 17,117 | $ | 22,117 | ||||||||
Software and other |
533 | 428 | 1,026 | 866 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
8,512 | 11,034 | 18,143 | 22,983 | ||||||||||||
Cost of revenues: |
||||||||||||||||
Cost of services |
5,401 | 7,136 | 11,406 | 14,821 | ||||||||||||
Cost of software and other |
91 | 36 | 181 | 65 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
5,492 | 7,172 | 11,587 | 14,886 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
3,020 | 3,862 | 6,556 | 8,097 | ||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and IT |
555 | 968 | 1,479 | 2,008 | ||||||||||||
Sales and marketing |
334 | 517 | 759 | 1,330 | ||||||||||||
General and administrative |
2,980 | 1,904 | 7,186 | 3,957 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
3,869 | 3,389 | 9,424 | 7,295 | ||||||||||||
Income (loss) from operations |
(849 | ) | 473 | (2,868 | ) | 802 | ||||||||||
Interest income and other, net |
75 | 173 | 117 | 257 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes |
(774 | ) | 646 | (2,751 | ) | 1,059 | ||||||||||
Income tax provision |
25 | 29 | 42 | 78 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (799 | ) | $ | 617 | $ | (2,793 | ) | $ | 981 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) per share—basic and diluted |
$ | (0.03 | ) | $ | 0.03 | $ | (0.13 | ) | $ | 0.05 | ||||||
Weighted average common shares outstanding—basic |
24,150 | 19,054 | 22,189 | 19,060 | ||||||||||||
Weighted average common shares outstanding—diluted |
24,150 | 19,352 | 22,189 | 19,336 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net income (loss) |
$ | (799 | ) | $ | 617 | $ | (2,793 | ) | $ | 981 | ||||||
Other comprehensive income (loss): |
||||||||||||||||
Change in foreign currency translation adjustment |
(59 | ) | (11 | ) | (60 | ) | (222 | ) | ||||||||
Change in net unrealized gain (loss) on investments |
1 | 38 | (3 | ) | 37 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss) |
(58 | ) | 27 | (63 | ) | (185 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive income (loss) |
$ | (857 | ) | $ | 644 | $ | (2,856 | ) | $ | 796 | ||||||
|
|
|
|
|
|
|
|
Common Stock |
||||||||||||||||||||||||||||
Shares |
Amount |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders’ Shares |
||||||||||||||||||||||
Balances at March 31, 2020 |
19,054 | $ | 2 | $ | 250,206 | $ | (5,297 | ) | $ | (2,592 | ) | $ | (208,886 | ) | $ | 33,433 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income |
— | — | — | — | — | 617 | 617 | |||||||||||||||||||||
Other comprehensive income |
— | — | — | — | 27 | — | 27 | |||||||||||||||||||||
Issuance of common stock upon exercise of stock options for cash |
1 | — | — | — | — | — | — | |||||||||||||||||||||
Issuance of common stock under employee stock purchase plan |
24 | — | 17 | — | — | — | 17 | |||||||||||||||||||||
Stock-based compensation expense |
— | — | 118 | — | — | — | 118 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at June 30, 2020 |
19,079 | $ | 2 | $ | 250,341 | $ | (5,297 | ) | $ | (2,565 | ) | $ | (208,269 | ) | $ | 34,212 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at March 31, 2021 |
24,089 | $ | 3 | $ | 259,401 | $ | (5,297 | ) | $ | (2,424 | ) | $ | (210,798 | ) | $ | 40,885 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss |
— | — | — | — | — | (799 | ) | (799 | ) | |||||||||||||||||||
Other comprehensive loss |
— | — | — | — | (58 | ) | — | (58 | ) | |||||||||||||||||||
Issuance of common stock upon exercise of stock options & RSU releases & employee share purchases |
131 | — | 66 | — | — | — | 66 | |||||||||||||||||||||
Stock-based compensation expense |
— | — | 153 | 0 | 0 | 153 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at June 30, 2021 |
24,220 | $ | 3 | $ | 259,620 | $ | (5,297 | ) | $ | (2,482 | ) | $ | (211,597 | ) | $ | 40,247 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
||||||||||||||||||||||||||||
Shares |
Amount |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders’ Shares |
||||||||||||||||||||||
Balances at December 31, 2019 |
19,054 | $ | 2 | $ | 250,092 | $ | (5,297 | ) | $ | (2,380 | ) | $ | (209,250 | ) | $ | 33,167 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income |
— | — | — | — | — | 981 | 981 | |||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | (185 | ) | — | (185 | ) | |||||||||||||||||||
Issuance of common stock upon exercise of stock options for cash |
1 | — | — | — | — | — | — | |||||||||||||||||||||
Issuance of common stock under employee stock purchase plan |
24 | — | 17 | — | — | — | 17 | |||||||||||||||||||||
Stock-based compensation expense |
— | — | 232 | — | — | — | 232 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at June 30, 2020 |
19,079 | $ | 2 | $ | 250,341 | $ | (5,297 | ) | $ | (2,565 | ) | $ | (208,269 | ) | $ | 34,212 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2020 |
19,490 | $ | 2 | $ | 250,954 | $ | (5,297 | ) | $ | (2,419 | ) | $ | (208,804 | ) | $ | 34,436 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss |
— | — | — | — | — | (2,793 | ) | (2,793 | ) | |||||||||||||||||||
Other comprehensive loss |
— | — | — | — | (63 | ) | — | (63 | ) | |||||||||||||||||||
Issuance of common stock upon exercise of stock options & RSU releases & employee share purchases |
820 | — | 1,063 | — | — | — | 1,063 | |||||||||||||||||||||
Issuance of common stock per Greenidge Merger Agreement |
3,910 | 1 | 7,233 | — | — | — | 7,234 | |||||||||||||||||||||
Stock-based compensation expense |
— | — | 370 | — | — | — | 370 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at June 30, 2021 |
24,220 | $ | 3 | $ | 259,620 | $ | (5,297 | ) | $ | (2,482 | ) | $ | (211,597 | ) | $ | 40,247 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Operating Activities: |
||||||||
Net income (loss) |
$ | (2,793 | ) | $ | 981 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: |
||||||||
Depreciation |
187 | 145 | ||||||
Amortization of premiums and discounts on investments |
(45 | ) | 34 | |||||
Stock-based compensation |
370 | 232 | ||||||
Changes in assets and liabilities: |
||||||||
Accounts receivable, net |
1,505 | 2,149 | ||||||
Prepaid expenses and other current assets |
61 | 129 | ||||||
Other long-term assets |
139 | (163 | ) | |||||
Accounts payable |
(128 | ) | 41 | |||||
Accrued compensation |
428 | 961 | ||||||
Other accrued liabilities |
275 | (188 | ) | |||||
Other long-term liabilities |
(16 | ) | (82 | ) | ||||
Deferred revenue |
309 | (167 | ) | |||||
|
|
|
|
|||||
Net cash provided by operating activities |
292 | 4,072 | ||||||
Investing Activities: |
||||||||
Purchases of property and equipment |
(115 | ) | (830 | ) | ||||
Purchases of investments |
(400 | ) | — | |||||
Maturities of investments |
10,687 | 7,869 | ||||||
|
|
|
|
|||||
Net cash provided by investing activities |
10,172 | 7,039 | ||||||
Financing Activities: |
||||||||
Proceeds from employee stock purchase plan |
15 | 17 | ||||||
Proceeds from exercise of stock options |
1,048 | — | ||||||
Proceeds from Greenidge transaction stock issuance |
7,234 | — | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
8,297 | 17 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
8 | 18 | ||||||
|
|
|
|
|||||
Net increase in cash and cash equivalents |
18,769 | 11,146 | ||||||
Cash and cash equivalents at beginning of period |
13,526 | 10,087 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 32,295 | $ | 21,233 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information: |
||||||||
Income taxes paid |
$ | 41 | $ | 2 | ||||
|
|
|
|
• | Time-Based Services—In connection with the provisions of certain services programs, fees are calculated based on contracted time-based rates with partners. For these programs, we recognize |
revenue as services are performed, based on billable time of work delivered by our technology specialists. These services programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred. |
• | Tier-Based Services—In connection with the provisions of certain services programs, fees are calculated on partner subscription tiers based on number of subscribers. For these programs, we recognize revenue as services are performed, and are billed based on the tier level of number of subscribers supported by our experts. |
• | Subscriptions—Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods. |
• | Incident-Based Services—Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery. |
Balance at December 31, 2020 |
$ | 881 | ||
Deferred revenue |
495 | |||
Recognition of unearned revenue |
(187 | ) | ||
|
|
|||
Balance at June 30, 2021 |
$ | 1,189 | ||
Balance at December 31, 2019 |
$ | 1,193 | ||
Deferred revenue |
1,452 | |||
Recognition of unearned revenue |
(1,619 | ) | ||
|
|
|||
Balance at June 30, 2020 |
$ | 1,026 |
As of June 30, 2021 |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
||||||||||||
Cash |
$ | 8,347 | $ | — | $ | — | $ | 8,347 | ||||||||
Money market funds |
23,948 | — | — | 23,948 | ||||||||||||
Certificates of deposit |
507 | — | — | 507 | ||||||||||||
Commercial paper |
775 | — | — | 775 | ||||||||||||
Corporate notes and bonds |
4,419 | — | 1 | 4,420 | ||||||||||||
U.S. government treasury |
500 | — | — | 500 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 38,496 | $ | — | $ | 1 | $ | 38,497 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Classified as: |
||||||||||||||||
Cash and cash equivalents |
32,295 | — | — | 32,295 | ||||||||||||
Short-term investments |
6,200 | — | 1 | 6,201 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 38,495 | $ | — | $ | 1 | $ | 38,496 | ||||||||
|
|
|
|
|
|
|
|
As of December 31, 2020 |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
||||||||||||
Cash |
$ | 10,918 | $ | — | $ | — | $ | 10,918 | ||||||||
Money market funds |
1,258 | — | — | 1,258 | ||||||||||||
Certificates of deposit |
492 | — | — | 492 | ||||||||||||
Commercial paper |
3,274 | — | (1 | ) | 3,273 | |||||||||||
Corporate notes and bonds |
9,423 | 4 | — | 9,427 | ||||||||||||
U.S. government treasury |
4,599 | — | — | 4,599 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 29,964 | $ | 4 | $ | (1 | ) | $ | 29,967 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Classified as: |
||||||||||||||||
Cash and cash equivalents |
13,526 | — | — | 13,526 | ||||||||||||
Short-term investments |
16,438 | 4 | (1 | ) | 16,441 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 29,964 | $ | 4 | $ | (1 | ) | $ | 29,967 | |||||||
|
|
|
|
|
|
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
Due within one year |
$ | 5,701 | $ | 13,248 | ||||
Due within two years |
500 | 3,193 | ||||||
|
|
|
|
|||||
$ | 6,201 | $ | 16,441 | |||||
|
|
|
|
• | Level 1—Quoted prices for identical instruments in active markets. |
• | Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
• | Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net income (loss) |
$ | (799 | ) | $ | 617 | $ | (2,793 | ) | $ | 981 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings per share—basic and diluted |
$ | (0.03 | ) | $ | 0.03 | $ | (0.13 | ) | $ | 0.05 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares of common stock outstanding—basic |
24,150 | 19,054 | 22,189 | 19,060 | ||||||||||||
Weighted-average shares of common stock outstanding—diluted |
24,150 | 19,352 | 22,189 | 19,336 |
Number of Shares (in thousands) |
Weighted Average Exercise Price per Share |
Weighted Average Remaining Contractual Term (in years) |
Aggregate Intrinsic Value (in thousands) |
|||||||||||||
Outstanding at December 31, 2020 |
2,629 | $ | 1.64 | 8.79 | $ | 1,605 | ||||||||||
Granted |
40 | 2.39 | — | |||||||||||||
Exercised |
(633 | ) | 1.68 | — | ||||||||||||
Forfeited |
(336 | ) | 1.71 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at June 30, 2021 |
1,700 | $ | 1.62 | 8.65 | $ | 3,821 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at June 30, 2021 |
327 | $ | 1.61 | 6.83 | 790 | |||||||||||
|
|
|
|
|
|
|
|
Number of Shares (in thousands) |
Weighted Average Exercise Price per Share |
Weighted Average Remaining Contractual Term (in years) |
Aggregate Intrinsic Value (in thousands) |
|||||||||||||
Outstanding at December 31, 2020 |
131 | $ | 2.05 | 0.7 | $ | 287 | ||||||||||
Granted |
100 | 2.15 | ||||||||||||||
Released |
(100 | ) | $ | 2.15 | ||||||||||||
Forfeited |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at June 30, 2021 |
131 | 2.05 | 0.2 | $ | 504 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at June 30, 2021 |
— | — | — | |||||||||||||
|
|
|
|
|
|
|
|
• | We obtained an understanding of management’s process to identify and evaluate tax obligations and uncertain tax positions and evaluated the design of key controls used by management therein. |
• | We evaluated the completeness and accuracy of deferred income taxes and the income tax provision by agreement to material tax filings. |
• | We assessed the reasonableness of the key judgements and estimates inherent in management’s assessment of their tax obligation and uncertain tax positions, including analysis over forecasts and tax elections. |
• | We involved our tax specialists with our evaluation of management’s judgements related to recognition of current and deferred income taxes and identified uncertain tax positions by analyzing the related tax law, statutes, and regulations and their application to the company’s positions. |
• | We evaluated the adequacy of the Company’s disclosure in Notes 1 and 7 in relation to the income taxes. |
December 31, |
||||||||
2020 |
2019 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 13,526 | $ | 10,087 | ||||
Short-term investments |
16,441 | 16,327 | ||||||
Accounts receivable, net |
6,975 | 9,398 | ||||||
Prepaid expenses and other current assets |
670 | 728 | ||||||
|
|
|
|
|||||
Total current assets |
37,612 | 36,540 | ||||||
Property and equipment, net |
1,115 | 533 | ||||||
Intangible assets |
— | 250 | ||||||
Right of use assets, net |
61 | 68 | ||||||
Other assets |
478 | 649 | ||||||
|
|
|
|
|||||
TOTAL ASSETS |
$ | 39,266 | $ | 38,040 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 366 | $ | 277 | ||||
Accrued compensation |
1,735 | 1,610 | ||||||
Other accrued liabilities |
879 | 940 | ||||||
Short-term lease liability |
58 | 61 | ||||||
Short-term deferred revenue |
881 | 1,193 | ||||||
|
|
|
|
|||||
Total current liabilities |
3,919 | 4,081 | ||||||
Other long-term liabilities |
911 | 792 | ||||||
|
|
|
|
|||||
Total liabilities |
4,830 | 4,873 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 3) |
||||||||
Stockholders’ equity: |
||||||||
Common stock; par value $0.0001, 50,000 shares authorized; 19,973 issued and 19,490 outstanding at December 31, 2020 and 19,537 issued and 19,054 outstanding at December 31, 2019 |
2 | 2 | ||||||
Additional paid-in capital |
250,954 | 250,092 | ||||||
Treasury stock, at cost (483 shares at December 31, 2020 and 2019) |
(5,297 | ) | (5,297 | ) | ||||
Accumulated other comprehensive loss |
(2,419 | ) | (2,380 | ) | ||||
Accumulated deficit |
(208,804 | ) | (209,250 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
34,436 | 33,167 | ||||||
|
|
|
|
|||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 39,266 | $ | 38,040 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Revenue: |
||||||||
Services |
$ | 42,079 | $ | 59,545 | ||||
Software and other |
1,785 | 3,788 | ||||||
|
|
|
|
|||||
Total revenue |
43,864 | 63,333 | ||||||
Cost of revenue: |
||||||||
Cost of services |
28,697 | 46,714 | ||||||
Cost of software and other |
224 | 151 | ||||||
|
|
|
|
|||||
Total cost of revenue |
28,921 | 46,865 | ||||||
|
|
|
|
|||||
Gross profit |
14,943 | 16,468 | ||||||
Operating expenses: |
||||||||
Engineering and IT |
3,655 | 4,078 | ||||||
Sales and marketing |
2,362 | 1,760 | ||||||
General and administrative |
8,874 | 7,679 | ||||||
|
|
|
|
|||||
Total operating expenses |
14,891 | 13,517 | ||||||
Income from operations |
52 | 2,951 | ||||||
Interest income and other, net |
496 | 1,049 | ||||||
|
|
|
|
|||||
Income before income taxes |
548 | 4,000 | ||||||
Income tax provision |
102 | 154 | ||||||
|
|
|
|
|||||
Net income |
$ | 446 | $ | 3,846 | ||||
|
|
|
|
|||||
Net income per share—basic and diluted |
$ | 0.02 | $ | 0.20 | ||||
Weighted average common shares outstanding—basic |
19,192 | 18,977 | ||||||
Weighted average common shares outstanding—diluted |
19,369 | 19,026 |
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Net income |
$ | 446 | $ | 3,846 | ||||
Other comprehensive income (loss): |
||||||||
Foreign currency translation adjustment |
(44 | ) | 49 | |||||
Net unrealized gain on investments |
5 | 78 | ||||||
|
|
|
|
|||||
Other comprehensive income (loss) |
(39 | ) | 127 | |||||
|
|
|
|
|||||
Comprehensive income |
$ | 407 | $ | 3,973 | ||||
|
|
|
|
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders’ Equity |
|||||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||||||
Balances at December 31, 2018 |
18,955 | $ | 2 | $ | 268,794 | $ | (5,297 | ) | $ | (2,507 | ) | $ | (213,096 | ) | $ | 47,896 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income |
— | — | — | — | — | 3,846 | 3,846 | |||||||||||||||||||||
Dividend payout |
— | — | (19,054 | ) | — | — | — | (19,054 | ) | |||||||||||||||||||
Other comprehensive loss |
— | — | — | — | 127 | — | 127 | |||||||||||||||||||||
Issuance of common stock upon exercise of stock options & RSU releases |
73 | — | — | — | — | — | — | |||||||||||||||||||||
Issuance of common stock under employee stock purchase plan |
26 | — | 48 | — | — | — | 48 | |||||||||||||||||||||
Stock-based compensation expense |
— | — | 304 | — | — | — | 304 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2019 |
19,054 | $ | 2 | $ | 250,092 | $ | (5,297 | ) | $ | (2,380 | ) | $ | (209,250 | ) | $ | 33,167 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income |
— | — | — | — | — | 446 | 446 | |||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | (39 | ) | — | (39 | ) | |||||||||||||||||||
Issuance of common stock upon exercise of stock options & RSU releases |
392 | — | 191 | — | — | — | 191 | |||||||||||||||||||||
Issuance of common stock under employee stock purchase plan |
44 | — | 37 | — | — | — | 37 | |||||||||||||||||||||
Stock-based compensation expense |
— | — | 634 | — | — | — | 634 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2020 |
19,490 | $ | 2 | $ | 250,954 | $ | (5,297 | ) | $ | (2,419 | ) | $ | (208,804 | ) | $ | 34,436 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Operating Activities: |
||||||||
Net income |
$ | 446 | $ | 3,846 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
Depreciation |
314 | 294 | ||||||
Amortization of premiums and discounts on investments |
65 | 83 | ||||||
Stock-based compensation |
634 | 304 | ||||||
Impairment of intangible asset |
250 | — | ||||||
Changes in assets and liabilities: |
||||||||
Accounts receivable, net |
2,423 | 2,893 | ||||||
Prepaid expenses and other current assets |
41 | 282 | ||||||
Other long-term assets |
142 | 40 | ||||||
Accounts payable |
87 | (92 | ) | |||||
Accrued compensation |
120 | (1,804 | ) | |||||
Accrued legal settlement |
— | (10,000 | ) | |||||
Other accrued liabilities |
(46 | ) | 26 | |||||
Other long-term liabilities |
104 | 18 | ||||||
Deferred revenue |
(312 | ) | 58 | |||||
|
|
|
|
|||||
Net cash provided by (used in) operating activities |
4,268 | (4,052 | ) | |||||
Investing Activities: |
||||||||
Purchases of property and equipment |
(896 | ) | (124 | ) | ||||
Disposal of property and equipment |
— | 3 | ||||||
Purchase of investments |
(13,375 | ) | (34,898 | ) | ||||
Proceeds from sale of investments |
— | 9,766 | ||||||
Maturities of investments |
13,200 | 33,267 | ||||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities |
(1,071 | ) | 8,014 | |||||
Financing Activities: |
||||||||
Payment of dividend |
— | (19,054 | ) | |||||
Proceeds from exercise of stock options |
191 | — | ||||||
Proceeds from employee stock purchase plan |
37 | 48 | ||||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
228 | (19,006 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents |
14 | (51 | ) | |||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
3,439 | (15,095 | ) | |||||
Cash and cash equivalents at beginning of year |
10,087 | 25,182 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of year |
$ | 13,526 | $ | 10,087 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for income tax |
$ | 135 | $ | 98 | ||||
|
|
|
|
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
As of December 31, 2020 |
||||||||||||||||
Cash |
$ | 10,918 | $ | — | $ | — | $ | 10,918 | ||||||||
Money market funds |
1,258 | — | — | 1,258 | ||||||||||||
Certificates of deposit |
492 | — | — | 492 | ||||||||||||
Commercial paper |
3,274 | — | (1 | ) | 3,273 | |||||||||||
Corporate notes and bonds |
9,423 | 4 | — | 9,427 | ||||||||||||
U.S. government treasury |
4,599 | — | — | 4,599 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 29,964 | $ | 4 | $ | (1 | ) | $ | 29,967 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Classified as: |
||||||||||||||||
Cash and cash equivalents |
$ | 13,526 | $ | — | $ | — | $ | 13,526 | ||||||||
Short-term investments |
16,438 | 4 | (1 | ) | 16,441 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 29,964 | $ | 4 | $ | (1 | ) | $ | 29,967 | ||||||||
|
|
|
|
|
|
|
|
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
As of December 31, 2019 |
||||||||||||||||
Cash |
$ | 7,814 | $ | — | $ | — | $ | 7,814 | ||||||||
Money market funds |
1,137 | — | — | 1,137 | ||||||||||||
Certificates of deposit |
475 | — | — | 475 | ||||||||||||
Commercial paper |
6,912 | — | (1 | ) | 6,911 | |||||||||||
Corporate notes and bonds |
7,922 | 15 | (4 | ) | 7,933 | |||||||||||
U.S. government agency securities |
2,145 | — | (1 | ) | 2,144 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 26,405 | $ | 15 | $ | (6 | ) | $ | 26,414 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Classified as: |
||||||||||||||||
Cash and cash equivalents |
$ | 10,087 | $ | — | $ | — | $ | 10,087 | ||||||||
Short-term investments |
16,318 | 15 | (6 | ) | 16,327 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 26,405 | $ | 15 | $ | (6 | ) | $ | 26,414 | ||||||||
|
|
|
|
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Due within one year |
$ | 13,248 | $ | 12,754 | ||||
Due within two years |
3,193 | 3,573 | ||||||
|
|
|
|
|||||
$ | 16,441 | $ | 16,327 | |||||
|
|
|
|
As of December 31, 2020 |
In Gain Position Less Than 12 Months |
In Loss Position More Than 12 Months |
Total in Gain Position |
|||||||||||||||||||||
Description |
Fair Value |
Unrealized Gain |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Gain |
||||||||||||||||||
Certificates of deposit |
$ | 492 | $ | — | $ | — | $ | — | $ | 492 | $ | — | ||||||||||||
Corporate notes and bonds |
9,502 | 5 | 3,195 | (2 | ) | 12,697 | 3 | |||||||||||||||||
U.S. government agency securities |
4,599 | — | — | — | 4,599 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 14,593 | $ | 6 | $ | 3,195 | $ | (2 | ) | $ | 17,788 | $ | 3 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019 |
In Gain Position Less Than 12 Months |
In Loss Position More Than 12 Months |
Total in Gain Position |
|||||||||||||||||||||
Description |
Fair Value |
Unrealized Gain |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Gain |
||||||||||||||||||
Certificates of deposit |
$ | 475 | $ | — | $ | — | $ | — | $ | 475 | $ | — | ||||||||||||
Corporate notes and bonds |
10,120 | 15 | 4,714 | (5 | ) | 14,834 | 10 | |||||||||||||||||
U.S. government agency securities |
2,145 | (1 | ) | — | — | 2,145 | (1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 12,740 | $ | 14 | $ | 4,714 | $ | (5 | ) | $ | 17,454 | $ | 9 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount |
||||
Balance, December 31, 2018 |
$ | 13 | ||
Provision for doubtful accounts |
40 | |||
Accounts written off |
(25 | ) | ||
|
|
|||
Balance, December 31, 2019 |
28 | |||
|
|
|||
Provision for doubtful accounts |
37 | |||
Accounts written off |
(61 | ) | ||
|
|
|||
Balance, December 31, 2020 |
$ | 4 | ||
|
|
• | identification of the contract, or contracts, with a customer; |
• | identification of the performance obligations in the contract; |
• | determination of the transaction price; |
• | allocation of the transaction price to the performance obligations in the contract; and |
• | recognition of revenue when, or as, we satisfy a performance obligation. |
• | Hourly-Based Services—In connection with the provisions of certain services programs, fees are calculated based on contracted hourly rates with partners. For these programs, we recognize revenue as services are performed, based on billable hours of work delivered by our technology experts. These service programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred. |
• | Tier-Based Services—In connection with the provisions of certain services programs, fees are calculated on partner subscription tiers based on number of subscribers. For these programs, we recognize revenue as services are performed, and are billed based on the tier level of number of subscribers supported by our experts. |
• | Subscriptions—Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods. |
• | Incident-Based Services—Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery. |
Amount |
||||
Balance, December 31, 2018 |
$ | 1,135 | ||
Deferred revenue |
1,887 | |||
Recognition of unearned revenue |
(1,829 | ) | ||
|
|
|||
Balance, December 31, 2019 |
1,193 | |||
|
|
|||
Deferred revenue |
1,243 | |||
Recognition of unearned revenue |
(1,555 | ) | ||
|
|
|||
Balance, December 31, 2020 |
$ | 881 | ||
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Net income |
$ | 446 | $ | 3,846 | ||||
|
|
|
|
|||||
Basic: |
||||||||
Weighted-average common shares outstanding |
19,192 | 18,977 | ||||||
|
|
|
|
|||||
Basic earnings per share |
$ | 0.02 | $ | 0.20 | ||||
|
|
|
|
|||||
Diluted |
||||||||
Weighted-average common shares outstanding |
19,192 | 18,977 | ||||||
Effect of dilutive securities: |
||||||||
Stock options and restricted stock units |
177 | 49 | ||||||
|
|
|
|
|||||
Diluted weighted-average commons shares outstanding |
19,369 | 19,026 | ||||||
|
|
|
|
|||||
Diluted earnings per share |
$ | 0.02 | $ | 0.20 | ||||
|
|
|
|
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
As of December 31, 2020 |
||||||||||||||||
Money market funds |
$ | 1,258 | $ | — | $ | — | $ | 1,258 | ||||||||
Certificates of deposit |
— | 492 | — | 492 | ||||||||||||
Commercial paper |
— | 3,273 | — | 3,273 | ||||||||||||
Corporate notes and bonds |
— | 9,427 | — | 9,427 | ||||||||||||
U.S. government agency securities |
— | 4,599 | — | 4,599 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,258 | $ | 17,791 | $ | — | $ | 19,049 | ||||||||
|
|
|
|
|
|
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
As of December 31, 2019 |
||||||||||||||||
Money market funds |
$ | 1,137 | $ | — | $ | — | $ | 1,137 | ||||||||
Certificates of deposit |
— | 475 | — | 475 | ||||||||||||
Commercial paper |
— | 6,911 | — | 6,911 | ||||||||||||
Corporate notes and bonds |
— | 7,933 | — | 7,933 | ||||||||||||
U.S. government agency securities |
— | 2,144 | — | 2,144 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,137 | $ | 17,463 | $ | — | $ | 18,600 | ||||||||
|
|
|
|
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
United States |
$ | 1,110 | $ | 532 | ||||
Philippines |
4 | 1 | ||||||
India |
1 | — | ||||||
|
|
|
|
|||||
Total |
$ | 1,115 | $ | 533 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Computer equipment and software |
$ | 8,114 | $ | 7,233 | ||||
Furniture and office equipment |
140 | 142 | ||||||
Leasehold improvements |
348 | 348 | ||||||
Construction in progress |
50 | 32 | ||||||
Accumulated depreciation |
(7,537 | ) | (7,222 | ) | ||||
|
|
|
|
|||||
Total property and equipment, net |
$ | 1,115 | $ | 533 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Accrued expenses |
$ | 369 | $ | 536 | ||||
Self-insurance accruals |
270 | 404 | ||||||
Payroll tax deferral |
240 | — | ||||||
|
|
|
|
|||||
Total other accrued liabilities |
$ | 879 | $ | 940 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Deferred tax liability, net |
443 | 428 | ||||||
Long-term income tax payable |
223 | 355 | ||||||
Payroll tax deferral |
240 | — | ||||||
Other long-term liabilities |
5 | 9 | ||||||
|
|
|
|
|||||
Total other long-term liabilities |
$ | 911 | $ | 792 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Stock-based compensation expense related to grants of: |
||||||||
Stock options |
$ | 224 | $ | 130 | ||||
RSU |
374 | 155 | ||||||
ESPP |
36 | 19 | ||||||
|
|
|
|
|||||
Total |
$ | 634 | $ | 304 | ||||
|
|
|
|
|||||
Stock-based compensation expense recognized in: |
||||||||
Cost of service |
$ | 28 | $ | 40 | ||||
Engineering and IT |
25 | 25 | ||||||
Sales and marketing |
38 | 38 | ||||||
General and administrative |
543 | 201 | ||||||
|
|
|
|
|||||
Total |
$ | 634 | $ | 304 | ||||
|
|
|
|
2010 Plan/Restated Plan |
Employee Stock Purchase Plan |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Risk-free interest rate |
0.4 | % | 1.7 | % | 0.2 | % | 2.0 | % | ||||||||
Expected term (in years) |
6.1 | 3.1 | 0.5 | 0.5 | ||||||||||||
Volatility |
42.5 | % | 35.6 | % | 74.4 | % | 42.4 | % | ||||||||
Expected dividend |
0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||
Weighted-average grant date fair value |
$ | 0.55 | $ | 0.52 | $ | 0.34 | $ | 0.43 |
Number of shares |
Weighted- average exercise price per share |
Weighted- average remaining contractual term (in years) |
Aggregate intrinsic value (in thousands) |
|||||||||||||
Outstanding at December 31, 2018 |
803 | $ | 2.89 | 8.43 | $ | 54 | ||||||||||
Granted |
90 | 0.94 | ||||||||||||||
Exercised |
— | — | ||||||||||||||
Forfeited |
(77 | ) | 1.97 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2019 |
816 | $ | 1.77 | 7.49 | $ | 16 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Granted |
2,394 | 1.56 | ||||||||||||||
Exercised |
(147 | ) | 1.30 | 116 | ||||||||||||
Forfeited |
(434 | ) | 1.58 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2020 |
2,629 | $ | 1.64 | 8.79 | $ | 1,605 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at December 31, 2020 |
724 | $ | 1.74 | 6.77 | $ | 468 | ||||||||||
|
|
|
|
|
|
|
|
Plan |
Option plans ranges of exercise prices |
Number of outstanding options |
Weighted- average remaining contractual life |
Weighted- average exercise price |
||||||||||||
2010 Plan/Restated Plan |
$1.29 – $16.67 | 2,029,176 | 8.61 | $ | 1.86 | |||||||||||
Inducement Plan |
$0.56 – $16.67 | 600,000 | 9.37 | $ | 1.33 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
2,629,176 | ||||||||||||||||
|
|
|
|
|
|
|
|
Number of shares |
Weighted- average exercise price per share |
Weighted- average remaining contractual term (in years) |
Aggregate intrinsic value (in thousands) |
|||||||||||||
Outstanding at December 31, 2018 |
96 | $ | 2.78 | 0.60 | $ | 227 | ||||||||||
Granted |
243 | 1.39 | ||||||||||||||
Vested |
(73 | ) | 2.06 | |||||||||||||
Forfeited |
(17 | ) | 2.75 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2019 |
249 | $ | 1.62 | 0.60 | $ | 271 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Granted |
127 | 1.97 | ||||||||||||||
Vested |
(245 | ) | 1.57 | |||||||||||||
Forfeited |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2020 |
131 | $ | 2.05 | 0.70 | $ | 287 | ||||||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
United States |
$ | 50 | $ | 3,634 | ||||
Foreign |
498 | 366 | ||||||
|
|
|
|
|||||
Total |
$ | 548 | $ | 4,000 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Current: |
||||||||
Federal |
$ | — | $ | — | ||||
State |
9 | 16 | ||||||
Foreign |
45 | 118 | ||||||
|
|
|
|
|||||
Total current |
$ | 54 | $ | 134 | ||||
|
|
|
|
|||||
Deferred: |
||||||||
Federal |
$ | — | $ | — | ||||
State |
— | — | ||||||
Foreign |
48 | 20 | ||||||
|
|
|
|
|||||
Total deferred |
$ | 48 | $ | 20 | ||||
|
|
|
|
|||||
Provision for income taxes |
$ | 102 | $ | 154 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Provision of Federal statutory rate |
$ | 115 | $ | 835 | ||||
State taxes |
9 | 16 | ||||||
Permanent differences/other |
1,825 | (13 | ) | |||||
Stock-based compensation |
(23 | ) | 23 | |||||
Federal valuation allowance used |
(1,824 | ) | (707 | ) | ||||
|
|
|
|
|||||
Provision for income taxes |
$ | 102 | $ | 154 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Deferred tax assets |
||||||||
Fixed assets |
$ | 13 | $ | 78 | ||||
Accruals and reserves |
122 | 92 | ||||||
Stock options |
247 | 197 | ||||||
Net operating loss carryforwards |
36,608 | 38,335 | ||||||
Federal and state credits |
3,227 | 3,461 | ||||||
Foreign credits |
163 | 159 | ||||||
Intangible assets |
1,497 | 1,789 | ||||||
Research and development expense |
1,487 | 1,858 | ||||||
|
|
|
|
|||||
Gross deferred tax assets |
43,364 | 45,969 | ||||||
Valuation allowance |
(43,238 | ) | (45,846 | ) | ||||
|
|
|
|
|||||
Total deferred tax assets |
126 | 123 | ||||||
|
|
|
|
|||||
Deferred tax liabilities (1) |
(569 | ) | (551 | ) | ||||
|
|
|
|
|||||
Net deferred liabilities |
$ | (443 | ) | $ | (428 | ) | ||
|
|
|
|
(1) | Of this amount, $554,000 relates to the Indian subsidiaries unremitted earnings deferred tax liability. The net deferred income tax liabilities are recorded in other long-term liabilities in the accompanying balance sheet. |
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Balance, beginning of year |
$ | 2,121 | $ | 2,117 | ||||
Increase related to prior year tax positions |
3 | 4 | ||||||
Decrease related to prior year tax positions |
(126 | ) | — | |||||
Settlements with tax authorities |
(78 | ) | — | |||||
|
|
|
|
|||||
Balance, end of year |
$ | 1,920 | $ | 2,121 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Operating leases |
||||||||
Right-of-use |
$ | 61 | $ | 68 | ||||
Lease liabilities—short term |
$ | 58 | $ | 61 | ||||
Lease liabilities—long-term |
3 | 7 | ||||||
|
|
|
|
|||||
Total lease liabilities |
$ | 61 | $ | 68 | ||||
|
|
|
|
Operating leases |
||||
2021 |
$ | 59 | ||
2022 |
3 | |||
Total |
$ | 62 | ||
Less: imputed interest |
(1 | ) | ||
|
|
|||
Present value of lease liabilities |
$ | 61 | ||
|
|
Operating cash flows from operating leases |
$ | 181 | ||
Right-of-use |
$ | 169 |
Years Ending December 31, |
Operating Leases |
|||
2021 |
$ | 59 | ||
2022 |
3 | |||
|
|
|||
Total minimum lease payments |
$ | 62 | ||
|
|
Amount to be paid |
||||
SEC Registration Fee |
$ | 18,959 | ||
Accounting fees and expenses |
100,000 | |||
Legal fees and expenses |
500,000 | |||
Miscellaneous fees and expenses |
15,000 | |||
Total |
$ | 633,959 | ||
Exhibit No. |
Description | |
104 | Cover Page Interactive Data File, formatted in Inline XBRL (included within the Exhibit 101 attachments) |
* | Filed herewith |
** | Previously filed. |
+ | Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) or Item 601(b)(2) of Regulation S-K. We hereby undertake to furnish copies of the omitted schedule or exhibit upon request by the Securities and Exchange Commission |
GREENIDGE GENERATION HOLDINGS INC. | ||
By: | /s/ Jeffrey E. Kirt | |
Jeffrey E. Kirt | ||
Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Jeffrey E. Kirt |
Chief Executive Officer (Principal | October 4, 2021 | ||
Jeffrey E. Kirt | Executive Officer) and Director | |||
* |
Chief Financial Officer (Principal | October 4, 2021 | ||
Timothy Rainey | Financial and Accounting Officer) | |||
* |
Vice Chairman of the Board of | October 4, 2021 | ||
George (Ted) Rogers | Directors | |||
* |
Chairman of the Board of Directors | October 4, 2021 | ||
Timothy Fazio | ||||
* |
Director | October 4, 2021 | ||
Jerome Lay | ||||
* |
Director | October 4, 2021 | ||
Andrew M. Bursky | ||||
* |
Director | October 4, 2021 | ||
Timothy Lowe | ||||
* |
Director | October 4, 2021 | ||
Daniel Rothaupt | ||||
* |
Director | October 4, 2021 | ||
David Filippelli | ||||
* |
Director | October 4, 2021 | ||
Michael Neuscheler |
*By: | /s/ Jeffrey E. Kirt | |
Jeffrey E. Kirt, Attorney-in-fact |