Group 1 - A company associated with the Trump family, focused on Bitcoin operations, will go public through a merger with Gryphon Digital Mining [1] - The merger will be an all-stock transaction, with the new company retaining the brand of American Bitcoin Corp and expected to list on NASDAQ under the ticker "ABTC" [1] - Following the announcement, Gryphon's stock price surged by 420% in pre-market trading, reaching approximately $1.98 per share [1] Group 2 - Post-merger, existing shareholders of American Bitcoin Corp are expected to hold about 98% of the new company [2] - The new company will be led by the board and management team of American Bitcoin Corp, with Eric Trump continuing as Chief Strategy Officer [2] - The CEO of Hut 8 Corp stated that this transaction marks a significant step for American Bitcoin Corp, enabling it to become a large-scale, low-cost Bitcoin accumulation platform [2]

Core Viewpoint - American Bitcoin Corp. has entered into a definitive merger agreement with Gryphon Digital Mining, Inc. to become a publicly traded entity focused on Bitcoin accumulation at scale [1] Company Overview - American Bitcoin is a majority-owned subsidiary of Hut 8, dedicated to industrial-scale Bitcoin mining and strategic Bitcoin reserve development [4] - The company aims to create a low-cost Bitcoin accumulation platform, leveraging Hut 8's mining operations and Eric Trump's expertise in capital markets [4] Transaction Details - The merger will be a stock-for-stock transaction, with the combined company expected to trade on Nasdaq under the ticker symbol "ABTC" [1][7] - The anticipated closing timeline for the transaction is targeted for Q3 2025 [7] - Post-transaction, existing stockholders of American Bitcoin are expected to own approximately 98% of the combined company [7] Management and Governance - The combined company will be led by the management and board of directors of American Bitcoin, including key figures such as Eric Trump and Asher Genoot [1][7]

Core Viewpoint - Hut 8 Corp. announced a merger agreement for its subsidiary American Bitcoin to go public with Gryphon Digital Mining, aiming to enhance capital markets access and growth potential [1][3]. Company Overview - Hut 8 Corp. operates as an energy infrastructure platform focused on Bitcoin mining and high-performance computing, managing 1,020 megawatts of energy capacity across 15 sites in the U.S. and Canada [7]. - American Bitcoin is a majority-owned subsidiary of Hut 8, dedicated to building Bitcoin infrastructure and leveraging Hut 8's mining operations and capital allocation strategies [8]. Transaction Details - The merger will result in the combined entity operating under the American Bitcoin brand, with a board led by Mike Ho and a management team that includes Eric Trump [2]. - Upon completion, existing stockholders of American Bitcoin will own approximately 98% of the combined company, which is expected to trade on Nasdaq under the ticker symbol "ABTC" [3][2]. - The transaction is anticipated to close as early as Q3 2025 [2]. Strategic Implications - The merger is positioned as a strategic move to scale American Bitcoin as a vehicle for low-cost Bitcoin accumulation, providing direct access to growth capital independent of Hut 8's balance sheet [3]. - Hut 8 will continue to serve as the exclusive infrastructure and operations partner for American Bitcoin, ensuring stable revenue streams through long-term commercial agreements [4].

Financial Performance - Gryphon Digital Mining reported mining revenues of $3.845 million for Q4 2024, an increase from $3.689 million in Q3 2024[9] - The company achieved a net income of $0.4 million in Q4 2024, compared to a net loss of $11.0 million in fiscal 2023[9] - Total revenues for 2024 decreased to $20,539,000 from $21,925,000 in 2023, representing a decline of approximately 6.3%[24] - Mining activities revenue was $20,539,000, while management services revenue was $0 in 2024, compared to $873,000 in 2023[24] - The net loss for 2024 was $21,300,000, an improvement from a net loss of $28,599,000 in 2023, reflecting a decrease of approximately 25.6%[24] - The net loss per share improved to $(0.51) in 2024 from $(0.83) in 2023[24] Cash and Assets - Cash and cash equivalents increased from $368,000 to $735,000 during Q4 2024[6] - Total assets decreased from $18.834 million in 2023 to $7.632 million in 2024[22] - Cash flows from operating activities resulted in a net cash used of $3,396,000 in 2024, compared to a net cash provided of $3,011,000 in 2023[26] - Cash and cash equivalents at the end of the period were $735,000 in 2024, down from $915,000 in 2023[26] Liabilities and Expenses - Total liabilities decreased by over 70%, with $13 million of debt converted to equity[9] - Total operating expenses decreased to $38,286,000 in 2024 from $41,103,000 in 2023, a reduction of about 6.9%[24] - The company incurred merger and acquisition costs of $394,000 in 2024, with no such costs reported in 2023[24] Mining Operations - The breakeven cost per Bitcoin in Q4 2024 was $75,872, significantly higher than $23,902 in Q4 2023[9] - Gryphon mined approximately 61 Bitcoin in Q4 2024, down from 176 Bitcoin in Q4 2023[9] - The company reported a gain on settlement of BTC Note amounting to $6,248,000 in 2024, with no comparable gain in 2023[24] - The company purchased mining equipment for $1,075,000 in 2024, a decrease from $1,894,000 in 2023[26] Stock and Market Activity - The average trading volume of Gryphon's stock increased from approximately 249,000 shares per day in Q3 2024 to approximately 874,000 shares per day in Q4 2024[6] - The company closed a $2.85 million offering with 100% management and majority board participation[9] Future Opportunities - Gryphon is focused on closing the Captus Energy Acquisition, which is expected to represent a billion-dollar opportunity[4]

Financial Data and Key Metrics Changes - For the year ending December 31, 2024, the company mined approximately 3.34 Bitcoin and generated mining revenues of approximately $20.5 million, compared to 7.40 Bitcoin and revenues of approximately $21.1 million for the year ending December 31, 2023 [16] - Breakeven costs per Bitcoin for 2024 were $47,359, significantly higher than $18,192 for 2023, reflecting the halving event and a 66% increase in global hash rate [16][17] - Adjusted EBITDA for 2024 was approximately negative $5.5 million, a decline from $94,000 in 2023, impacted by $6 million in one-time legal and marketing fees [17][18] - The company recognized a net income of approximately $401,000 for Q4 2024, compared to a net loss of approximately $10.9 million for Q4 2023 [19][21] Business Line Data and Key Metrics Changes - The company mined 334 Bitcoin in 2024, a decrease from the previous year, indicating challenges in the mining segment [6] - The focus has shifted from Bitcoin mining as a primary revenue source to developing power assets for high-performance computing (HPC) and AI data centers [10][11] Market Data and Key Metrics Changes - The company noted a significant increase in global power demand driven by AI, estimating a 50% to 70% increase in power consumption in North America over the next five years [8] - The company aims to position itself as a leader in sustainable computing infrastructure, capitalizing on the growing demand for HPC and AI computing [29] Company Strategy and Development Direction - The company is transitioning from Bitcoin mining to developing energy assets, particularly natural gas, to support HPC and AI data centers [11][26] - The acquisition of Captus is a strategic move to become a major player in the HPC and AI computing infrastructure market, with potential power capacity of up to 4 gigawatts [14][27] - The management team has been strengthened, and a debt restructuring has improved the company's financial position [12][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the competitive nature of Bitcoin mining and the need to control energy costs to remain profitable [7] - The company is optimistic about the future, focusing on executing its strategic shift and maximizing shareholder value [30][31] Other Important Information - The company completed a debt restructuring with Anchorage Digital, converting $19.6 million of debt to equity, which has improved cash flow and reduced liabilities [22][24] - The management team and board members have personally invested in the company's equity raise, indicating strong confidence in the company's direction [14] Q&A Session Summary Question: Status of Ericsson in BC - The company terminated the original agreement to acquire 500 wells in British Columbia but is still interested in acquiring a subset of those assets with significant production and manageable liabilities [35][36] Question: Details on Captus and latency - The Captus site is approximately one hour outside Calgary and has excellent latency due to proximity to fiber connections [41] Question: Development and capital relationships - The company plans to secure the asset first, then develop the initial 136 megawatts while engaging potential customers and capital partners [52][51] Question: Competitiveness of Captus acquisition - There was significant interest in Captus, and the management team believes their commitment to the project helped secure the asset [56]

Strategy and Operations - Gryphon's new strategy focuses on acquiring and developing energy assets for AI and high-performance computing (HPC) data center infrastructure since September 2024[28]. - Gryphon operates approximately 9,660 bitcoin ASIC mining computers, generating revenue based on a dollar per megawatt-hour (MWh) basis, which is variable depending on Bitcoin price and global hash rates[30]. - Gryphon entered into a Co-Location Mining Services Agreement with Blockfusion for hosting 3,780 bitcoin miners, entitled to 12 MW of power at a cost of $156,000 per month[31]. - The Mawson Agreement allows Gryphon to host up to 5,880 miners with 20 MW of power at approximately $23.50 per MW/hour, with a minimum fee of about $165,521 per month[32]. - Gryphon is acquiring Captus Generation Ltd. and related entities for CAD $24 million, with a focus on developing AI HPC infrastructure on 850 acres in Alberta[50]. - The Captus Site is considered highly suitable for development due to its redundant natural gas lines, grid connectivity, and access to non-potable water[51]. - Gryphon has delivered 3,996 bitcoin miners to Blockfusion and 6,719 miners to Mawson subsequent to December 31, 2024[31][32]. - The Company entered into an Asset Purchase Agreement to acquire four natural gas generators with a combined standby rating of 1,900 kW and 566 bitcoin ASIC mining computers with a total hashrate capacity of approximately 57,120 TH/s[55]. - The total purchase price for the Giga Acquisition remains $1,500,000, with an additional advance payment of $250,000 made to the Seller[56]. - As of December 31, 2024, the Company operates a miner fleet composed of 7,128 S19j Pro Antminers, 552 S19k Pro Antminers, 276 S21 Antminers, and 878 S19j Pro + Antminers, with a total hashrate capacity of approximately 1,000 TH/s[63]. Financial Performance and Risks - Gryphon's revenue is primarily derived from bitcoin mining, with the price of bitcoin ranging between approximately $39,000 and $106,000 in fiscal 2024, directly impacting profitability[87]. - The company's operating results are significantly tied to the value of bitcoin, which is subject to high volatility and regulatory uncertainties[88]. - Gryphon's ability to earn bitcoin rewards is directly proportional to its mining power (hashrate), which must continuously expand to remain competitive[92]. - Gryphon's average bitcoin holding period was 30 days for the year ended December 31, 2024, compared to 25 days for the year ended December 31, 2023[72]. - Gryphon's traditional revenue model involves mining and holding bitcoin, selling only what is necessary for operating expenses and reinvestment[72]. - Gryphon's financial statements are prepared on a going concern basis, indicating substantial doubt about its ability to continue operations[160]. - Gryphon's future profitability is uncertain, and it may incur additional losses and negative cash flows in the foreseeable future[162]. - Gryphon may face liquidity constraints and need additional capital, which may not be available on favorable terms[115]. - Gryphon's digital assets are not insured against theft, loss, or destruction, increasing the risk of significant financial losses for the company and its stockholders[129]. - Gryphon's reliance on a single model of miner increases operational risks, as any design flaws could affect the entire system[182]. Regulatory Environment - Regulatory scrutiny of the blockchain and bitcoin industries is increasing, with multiple U.S. federal agencies involved in rulemaking and oversight[83]. - The U.S. government is working towards establishing a unified federal regulatory regime for cryptocurrencies, which may impact Gryphon's operations[217]. - Regulatory changes could require Gryphon to register and comply with securities laws, potentially leading to extraordinary expenses or operational changes[219]. - Certain jurisdictions have deemed cryptocurrencies illegal, which could adversely affect Gryphon's ability to operate and the value of its Bitcoin holdings[225]. - Gryphon's business is exposed to extensive and evolving regulatory risks, which could adversely affect its operations and financial condition[213]. - The evolving regulatory landscape may lead to increased operational burdens or the need to cease certain operations if compliance becomes too costly[219]. Market Dynamics and Competition - Gryphon faces significant competition from larger companies with greater resources, which may hinder its ability to expand and remain competitive[192]. - Gryphon's business relies on a limited number of digital asset mining equipment suppliers, making it vulnerable to supply fluctuations and price volatility[179]. - The ongoing shortage of ASIC chips, a critical component for mining machines, may impact Gryphon's self-mining operations and costs[180]. - Gryphon's operations may be impacted by cybersecurity risks, including potential attacks on its systems and the loss of access to private keys[166]. - Gryphon's ability to raise additional capital is essential for funding operations and strategic growth initiatives, with potential dilution of existing stockholders' interests[159]. Technological and Operational Challenges - Gryphon's hash rate growth is critical to remain competitive, as the global network hash rate is expected to increase with greater Bitcoin adoption[156]. - Gryphon must continually add new miners to grow its hash rate in line with the Bitcoin network hash rate to remain competitive[177]. - The price of new miners has increased due to rising demand and scarcity, which may hinder Gryphon's ability to fund hash rate growth[177]. - Gryphon's mining operations depend on third-party mining pools, exposing it to risks from potential downtime or issues with the pool operator[184]. - Gryphon's hosting arrangements are uncertain and competitive, with potential regulatory changes affecting availability[185]. External Factors and Market Sentiment - Gryphon's success is contingent upon the continued market acceptance and value of bitcoin, which may be influenced by various external factors including regulatory changes and market dynamics[90]. - Geopolitical and economic crises could lead to large-scale sell-offs of digital assets, negatively impacting Bitcoin's value and Gryphon's business[102]. - The failure or insolvency of major exchanges like FTX has led to significant price volatility in the crypto asset markets, adversely affecting Gryphon's financial condition[96]. - A decline in Bitcoin adoption could weaken demand, negatively impacting Gryphon's business and leading to lower trading volumes and diminished liquidity[100]. - Internet disruptions could significantly impact Gryphon's ability to mine Bitcoin and the overall price of Bitcoin[154].

Financial Data and Key Metrics Changes - Gryphon mined approximately 61 Bitcoin and generated mining revenues of $3.7 million in Q3 2024, compared to 176 Bitcoin and $5.2 million in the same period in the prior year [10] - Breakeven costs per Bitcoin in Q3 2024 were $59,213, significantly higher than $21,501 in Q3 2023, reflecting the halving event and increased global hashrate [10] - Adjusted EBITDA was approximately negative $2.5 million for Q3 2024, an improvement from negative $4.7 million in Q3 2023 [11] - The company recognized a net loss of $5.9 million in Q3 2024, compared to a net loss of $8.1 million in Q3 2023 [12] Business Line Data and Key Metrics Changes - The company has enhanced its leadership team to accelerate growth, including the appointment of a new Chairman and Board members with significant industry experience [5][6] - A transformative debt restructuring was completed, converting $13 million of debt to equity and restructuring the remaining $5 million on favorable terms, significantly strengthening the financial position [6][7] Market Data and Key Metrics Changes - The market capitalization of Gryphon has moved north of $40 million, exceeding NASDAQ listing requirements [7] - The average Bitcoin price during the quarter was $59,224, with the current price exceeding $90,000 [26] Company Strategy and Development Direction - The company is focused on both core Bitcoin mining operations and strategic expansion into AI infrastructure hosting, leveraging low-cost power [4][17] - Gryphon aims to diversify revenue and accelerate growth by becoming a leading provider of high-performance computing for AI applications [18][19] - The company plans to make meaningful progress towards AI hosting through organic development and potential strategic M&A [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to capitalize on the growing demand for AI compute, viewing it as a unique opportunity [17][18] - The company is committed to methodically building its core Bitcoin mining business while pursuing AI opportunities [19][20] Other Important Information - The company has secured ultra-low-cost power mining operations at around $0.01 per kilowatt hour, which is seen as a competitive advantage [9] - The debt restructuring has transformed a significant liability into a strength, with Anchorage becoming the largest shareholder and a key partner [38][39] Q&A Session Summary Question: Can you elaborate on your efforts in HPC? - The company is looking for new spaces to launch AI operations, not converting existing Bitcoin facilities [22] Question: Has anything happened with your cost of power recently? - The cost of power has been consistent, averaging around $0.062 to $0.063 per kilowatt hour, with efforts to find alternatives [23][24] Question: What was the average Bitcoin price during the quarter? - The average Bitcoin price was $59,224 [26] Question: How do you see the transition to lower-cost power? - The company is actively engaged in relocating its fleet and expects significant announcements by the end of the year [25][31] Question: What is the efficiency of the current fleet? - The current fleet is expected to be fully depreciated over the next 12 months, with profitability at Bitcoin prices above $65,000 [34] Question: What expertise will be needed for the HPC endeavor? - The company plans to add power experts and HPC specialists as it identifies significant power opportunities [40]

Mining Performance - For the three months ended September 30, 2024, Gryphon mined approximately 61 bitcoins, a decrease of 65% compared to 176 bitcoins mined in the same period of 2023[171]. - Mining revenues for Q3 2024 were $3,689,000, down 29% from $5,189,000 in Q3 2023[172]. - The cost to mine one bitcoin in Q3 2024 was $59,213, significantly higher than $22,625 in Q3 2023, reflecting increased operational costs[172]. - Gryphon's total bitcoin equivalent coins generated in Q3 2024 were 61, compared to 185 in Q3 2023, indicating a decline in mining efficiency[172]. - The average value of one mined bitcoin in Q3 2024 was $60,475, compared to $29,483 in Q3 2023, highlighting a substantial increase in bitcoin prices[172]. Financial Performance - Mining revenues increased to $16,694,000 for the nine months ended September 30, 2024, from $14,992,000 for the same period in 2023, representing an increase of $1,702,000 or 11.4%[188]. - The average value of Bitcoin rose to $60,000 for the nine months ended September 30, 2024, compared to $26,000 for the same period in 2023, an increase of $34,000 or 131%[188]. - Total revenues for the nine months ended September 30, 2024, were $16,694,000, up from $15,836,000 in 2023, reflecting a growth of $858,000 or 5.4%[187]. - Cost of revenues increased to $12,252,000 for the nine months ended September 30, 2024, from $9,542,000 in 2023, an increase of $2,710,000 or 28.4%[190]. - General and administrative expenses surged to $8,728,000 for the nine months ended September 30, 2024, from $3,250,000 in 2023, marking an increase of $5,478,000 or 168.6%[190]. - The Company reported a net loss of $21.7 million for the nine months ended September 30, 2024, and an adjusted EBITDA of $(3.53) million[262]. - For the three months ended September 30, 2024, the company reported a net loss of $5.95 million, an improvement from a net loss of $8.09 million in the same period of 2023, with an adjusted EBITDA of $(2.45) million[263]. Operational Costs - Gryphon's electricity cost per kilowatt hour decreased from $0.0709 in Q3 2023 to $0.0624 in Q3 2024, contributing to lower operational costs[176]. - General and administrative expenses surged to $2,439,000 for the three months ended September 30, 2024, up 203.4% from $804,000 in 2023[214]. - Professional fees increased to $1,128,000 for the three months ended September 30, 2024, from $479,000 in 2023, reflecting a rise of 135.5%[214]. Debt and Financing - Gryphon initiated an At The Market offering program with a total offering price of up to $70 million, having sold approximately 3.4 million shares for net proceeds of $2.8 million as of November 13, 2024[178]. - The restructuring of the Anchorage Loan resulted in the conversion of approximately $9.1 million into shares of Common Stock, issuing 8,287,984 shares at $1.10 per share[180]. - The New Loan Agreement includes a 4.25% interest rate and allows Anchorage to convert half of the outstanding principal at $1.10 per share and the remaining half at $1.50 per share[181]. - The Company entered into a Debt Repayment and Exchange Agreement on October 25, 2024, converting approximately $9.1 million of the Anchorage Loan into shares of common stock at $1.10 per share[249]. - The Restructured Loan has an interest rate of 4.25% payable monthly, with Anchorage given a first priority lien on all of Gryphon's assets[251]. - The BTC Note was amended to extend the maturity date to March 2026 and increase the interest rate to 6% per annum[239]. - Interest expense increased to $908,000 for the nine months ended September 30, 2024, from $530,000 in 2023, an increase of $378,000 or 71.3%[207]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $368,000 as of September 30, 2024, down from $915,000 as of December 31, 2023[226]. - The accumulated deficit increased to approximately $68,137,000 as of September 30, 2024, compared to $47,175,000 as of December 31, 2023[226]. - The Company anticipates needing additional capital resources to fund operations and may consider selling additional equity or debt securities[227]. - For the nine months ended September 30, 2024, net cash used in operating activities was approximately $2,368,000, with cash proceeds from the sale of digital assets at approximately $16,649,000 and cash expenditures of approximately $19,017,000[230]. - Net cash used in investing activities for the same period was approximately $1,504,000, primarily for the purchase of mining equipment costing approximately $1,075,000[231]. - Net cash provided by financing activities was approximately $3,325,000, mainly from cash proceeds of $3,059,000 from the issuance of common stock[232]. Legal and Compliance Issues - The company identified a material weakness in internal control over financial reporting due to insufficient staffing in the accounting department, which could lead to potential misstatements[269]. - The company is committed to enhancing its internal controls by adding resources and utilizing external audit firms to address identified weaknesses[272]. - The company reached a settlement in the Core Litigation, resolving claims against it and dismissing the complaint with prejudice[286]. - Dutchie filed a complaint against the Company alleging unfair competition and tortious interference, but the court dismissed the case in October 2023, allowing for an appeal[291]. - TreCom filed suit against the Company seeking recovery of approximately $4.2 million for breach of contract, with a trial set to commence on December 2, 2024[293]. - The Company established a loss contingency of $0.2 million related to the TreCom matter, which remains outstanding as of September 30, 2024[293]. - The former CEO was terminated for cause on September 17, 2024, and subsequently filed a wrongful termination claim against the Company[294][295]. - A special committee was created by the Board to oversee the handling of the wrongful termination claim[296]. - The Company intends to vigorously defend against all ongoing litigation and claims[291][295][296]. - Litigation may have an adverse impact on the Company due to defense costs and diversion of management resources[296].

Financial Performance - Mining revenues for Q3 2024 were $3.7 million, down from $5.2 million in Q3 2023[3] - The company reported a net loss of $5.9 million in Q3 2024, an improvement from a net loss of $8.1 million in Q3 2023[4] - Adjusted EBITDA loss narrowed to $2.5 million in Q3 2024, compared to a loss of $4.7 million in Q3 2023[5] - Total revenues for the three months ended September 30, 2024, were $3,689,000, a decrease of 32.5% compared to $5,477,000 for the same period in 2023[16] - The company reported a net loss of $5,948,000 for the three months ended September 30, 2024, compared to a net loss of $8,086,000 for the same period in 2023, indicating an improvement of 26.1%[16] - The net loss for the nine months ended September 30, 2024, was $21,701,000, compared to a net loss of $17,619,000 for the same period in 2023, representing an increase in loss of approximately 23.5%[21] Mining Operations - Breakeven cost per Bitcoin increased to $59,213 in Q3 2024, compared to $22,625 in Q3 2023[3] - The company mined approximately 61 Bitcoin in Q3 2024, significantly lower than 176 Bitcoin mined in Q3 2023[5] - Mining activities generated revenues of $3,689,000 for the three months ended September 30, 2024, down from $5,189,000 in the prior year, reflecting a decline of 29%[16] Assets and Liabilities - Total current assets as of September 30, 2024, were $1.7 million, with total assets amounting to $7.5 million[6] - Current liabilities stood at $26.4 million as of September 30, 2024, following a successful debt restructuring[6] - Total current assets decreased to $1,688,000 as of September 30, 2024, from $5,398,000 at December 31, 2023, representing a decline of 68.7%[15] - Total liabilities increased to $26,408,000 as of September 30, 2024, compared to $19,433,000 at December 31, 2023, reflecting a rise of 36.5%[15] - The company’s accumulated deficit increased to $(68,137,000) as of September 30, 2024, compared to $(47,175,000) at the end of 2023, representing a deterioration of 44.4%[15] - The company reported total stockholders' deficit of $(18,863,000) as of September 30, 2024, compared to $(599,000) at December 31, 2023, indicating a significant increase in deficit[15] Cash Flow and Investments - Cash used in operating activities was $(2,368,000) for 2024, a significant decrease from the cash provided of $3,064,000 in 2023[21] - The company reported a net cash used in investing activities of $(1,504,000) in 2024, compared to $(1,902,000) in 2023, showing a reduction in cash outflow[21] - Cash at the end of the period was $368,000, down from $1,405,000 at the end of the previous year, reflecting a decrease of approximately 73.8%[21] Expenses and Impairments - General and administrative expenses surged to $2,439,000 for the three months ended September 30, 2024, compared to $804,000 in the same period last year, marking an increase of 203.6%[16] - The impairment of digital assets was recorded at $1,295,000 in 2024, while there was no impairment reported in 2023[21] - The depreciation expense for the nine months ended September 30, 2024, was $9,435,000, down from $11,906,000 in 2023, indicating a decrease of about 20.7%[21] Strategic Initiatives - The company aims to enhance financial flexibility and secure low-cost power deals to expand Bitcoin mining operations and explore AI computing opportunities[2] - Market capitalization exceeded $40 million, reflecting growing market confidence in the company's strategic direction[2] - The company plans to announce several initiatives in the coming months to maximize shareholder value[2] Stock and Shares - The weighted average shares outstanding for basic and diluted calculations increased to 40,611,068 for the three months ended September 30, 2024, compared to 14,450,688 in the prior year[16] - The company recognized a fair value of common stock issued to consultants amounting to $1,708,000 in 2024[21] - The proceeds from the sale of digital assets were $16,649,000 in 2024, an increase from $13,958,000 in 2023, representing a growth of approximately 19.2%[21]

Financial Data and Key Metrics Changes - Gryphon Digital Mining reported a quarterly average hash rate of 899 petahashes per second in Q2 2024, a 20% increase from the same quarter in the previous year [3] - Mining revenues for Q2 2024 were $5.5 million, compared to $4.9 million in the same period last year [8] - Breakeven costs increased to approximately $45,452 in Q2 2024 from $34,063 in Q1 2024, reflecting the halving event and increased global hash rate [8] - The net loss for Q2 2024 was $4 million, compared to a net loss of $2.6 million in Q2 2023 [10] - Adjusted EBITDA for Q2 2024 was approximately negative $3 million, compared to negative $4.2 million in Q2 2023 [10] Business Line Data and Key Metrics Changes - Gryphon mined approximately 84 Bitcoin in Q2 2024, with an average Bitcoin price increase from $25,428 to $59,572, a 134% rise [8][9] - The average efficiency for the active fleet of approximately 8,825 Bitcoin mining machines was around 28 joules per terahash as of June 30, 2024 [11] Market Data and Key Metrics Changes - The daily average global hash rate increased by 68% from 357.7 exahash to 602.1 exahash per day year-over-year [8] - Recent market fluctuations in Bitcoin prices were attributed to factors such as Germany selling off Bitcoin holdings and geopolitical instability [5] Company Strategy and Development Direction - The company is focused on growth and has vetted over 25 acquisition prospects, emphasizing accretive opportunities [7] - Gryphon aims to maintain a competitive advantage through a flexible cost structure that allows production costs to decrease with falling Bitcoin prices [6] - The company is actively pursuing low-cost power sources to enhance its operational efficiency and position for future growth [15] Management's Comments on Operating Environment and Future Outlook - Management believes the current market represents the bottom of the upcycle for Bitcoin, expecting prices to trend higher in the coming months [5] - The company is well-positioned to navigate market conditions due to its unique cost structure and operational efficiencies [6] - Management highlighted the importance of maintaining a low-cost profile in the post-halving environment to ensure long-term success [14] Other Important Information - Gryphon was selected to join the Russell Microcap Index, reflecting significant progress in capital markets [4] - The CFO announced his decision to step down, with a transition plan in place [7] Q&A Session Summary Question: Background on power draw and fleet upgrades - The company currently draws approximately 28 megawatts from its hydro-powered facility and is looking for opportunities to upgrade its machines [17][18] Question: General and administrative expenses outlook - Normal expenditures are around $2.2 million per month, with recent increases due to marketing expenses [20] Question: Insights on acquisition opportunities - The company is focusing on finding low-cost power and has passed on several opportunities due to unfavorable cost structures [21][24] Question: Approach to distressed private situations - Many companies overvalue themselves, and the company is waiting for market corrections to negotiate better deals [27][28] Question: Impact of low-cost operations on acquisitions - The company’s low-cost structure positions it well for potential acquisitions, especially in a tougher market [30] Question: Interest in specific acquisition targets - The company remains interested in several attractive acquisition opportunities and is actively engaged in discussions [32]