DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and certain other criteria are met. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. When the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized and updated each reporting period as appropriate.

The contract for Support.com's largest customer was not renewed upon expiration on December 31, 2022. As a result of this material change in the business, management and the Board of Directors made the determination to consider various alternatives for Support.com, including the disposition of assets. As of December 31, 2022, the Company classified the Support.com business as held for sale and discontinued operations in these consolidated financial statements as a result of its strategic shift to strictly focus on its cryptocurrency datacenter and power generation operations.

In January 2023, Greenidge completed the sale of a portion of the assets of Support.com for net proceeds of approximately $2.6 million, and is continuing to evaluate alternatives for the remainder of the Support.com segment assets.

Major classes of assets and liabilities consist of the following:


	As of December 31,
$ in thousands	2022		2021
Assets:
Accounts receivable	$	3,996	$	5,287
Prepaid expenses and other current assets	1,253		1,662
Current assets held for sale	5,249		6,949

Property and equipment	743		1,079
Intangible assets, net	—		3,537
Goodwill	—		3,062
Other assets	481		264

Long-term assets held for sale	1,224		7,942
Assets held for sale	6,473		14,891

Liabilities:
Accounts payable	191		174
Accrued expenses	3,351		3,692
Income taxes payable	—		137
Current liabilities held for sale	3,542		4,003

Other long-term liabilities	432		368
Long-term liabilities held for sale	432		368
Liabilities held for sale	3,974		4,371

The Company reasonably expects to close on this transaction within one year; therefore, the assets and liabilities of Support.com have been presented as current as of December 31, 2022.

Financial results from discontinued operations consist of the following:


	For the Year Ended December 31,
$ in thousands	2022		2021
Revenue	$	31,464	$	9,952
Cost of revenue - services and other (exclusive of depreciation and amortization)	(14,791)		(5,430)
Depreciation and amortization	(1,298)		(381)
Selling, general and administrative	(9,852)		(3,352)
Merger and other costs	(1,343)		(32,087)
Goodwill and intangibles asset impairment charge	(5,672)		(42,307)
Other income, net	353		32
Pretax loss of discontinued operations	(1,139)		(73,573)
Income tax provision (benefit)	188		(7,493)
Loss from discontinued operations, net of tax	$	(1,327)	$	(66,080)

The Company’s effective income tax rate from discontinued operations for the years ended December 31, 2022 and 2021 was (16.5)% and 10.2%, respectively, primarily due to goodwill impairment and nondeductible transaction costs.

Support.com Goodwill and Intangible Assets

As described in Notes 1 and 3, on September 14, 2021 Greenidge and Support.com combined their respective businesses through an all-stock merger transaction that was accounted for as a business combination in accordance with ASC 805. Prior to the Merger, Greenidge did not have any goodwill or intangible assets. As of December 31, 2022, the Company has classified the Support.com business as held for sale and discontinued operations in these consolidated financial statements.

Goodwill

Changes in the carrying amount of goodwill related to the Company's discontinued operations were as follows:


$ in thousands
Balance December 31, 2020	$	—
Support acquisition (Note 3)	45,369
Impairment charge – Fourth Quarter 2021 (see below)	(42,307)
Balance December 31, 2021	3,062
Impairment charge – Fourth Quarter 2022 (see below)	(3,062)
Balance December 31, 2022	$	—

Greenidge performed its annual goodwill impairment test at December 31, 2021. The test concluded that the fair value of the Support Services reporting unit was less than its carrying value (including goodwill), and that a portion of the Company’s goodwill was impaired. In making this determination, the Company updated its discounted cash flow analysis, including updated business projections and weighted average cost of capital factors, as well as other valuation methodologies such as comparisons with similar companies and industry multiples. Accordingly, the Company recorded a non-cash goodwill impairment charge of $42.3 million which is included in loss from discontinued operations, net of tax in its consolidated statement of operations for the year ended December 31, 2021.

In the fourth quarter 2022, due to the contract expiration of Support.com's largest customer, the Company determined that this was a triggering event to test for goodwill impairment and determined that goodwill was fully impaired as the value of the Support.com reporting unit was below the fair value of the reporting unit. As a result of the analysis, the company recorded a goodwill impairment of $3.1 million which is included in the loss from discontinued operations, net of tax on the consolidated statement of operations.

Intangible Assets

Changes in the carrying amount of intangible assets related to the Company's discontinued operations were as follows:


$ in thousands	Customer Relationships		Tradename		Total
Balance December 31, 2020	$	—	$	—	$	—
Support acquisition (Note 3)	3,320		490		3,810
Amortization expense	(244)		(29)		(273)
Balance December 31, 2021	3,076		461		3,537
Amortization expense	(830)		(97)		(927)
Impairment charge – Fourth Quarter 2022 (see below)	(2,246)		(364)		(2,610)
Balance December 31, 2022	$	—	$	—	$	—

In the fourth quarter 2022, due to the contract expiration of Support.com's largest customer, the Company determined that this was a triggering event to test for intangible asset impairment and determined that both the customer relationships and the tradename were fully impaired as the value was below the expected future cash flows. As a result of the analysis, the Company recorded an impairment of the intangible assets of $2.2 million for customer relationships and $0.4 million for the tradename which is included in the loss from discontinued operations, net of tax on the consolidated statements of operations for the year ended December 31, 2022.