Greenidge Generation(US:GREE)2023-11-14 22:11Cryptocurrency Operations - Greenidge's cryptocurrency datacenter operations consist of approximately 42,300 miners with a combined capacity of 4.6 EH/s, which will reduce to approximately 27,900 miners and 2.9 EH/s following the sale of the South Carolina Facility[122][124]. - The company generated revenue from three primary sources: datacenter hosting, cryptocurrency mining, and power and capacity[120]. - Greenidge's hosting agreements include a contract with Conifex Timber Inc. to host 750 miners and an agreement with Core Scientific, Inc. to host approximately 6,900 miners[128]. - The company has classified the Support.com business as held for sale and discontinued operations to focus on cryptocurrency datacenter and power generation operations[133]. Financial Performance - Datacenter hosting revenue for Q3 2023 was $12.1 million, a significant increase from $0 in Q3 2022[141]. - Cryptocurrency mining revenue decreased by $11.7 million, or 64%, to $6.6 million, primarily due to increased mining difficulty and the transition to hosting[142]. - Total revenue for Q3 2023 was $20.9 million, down 5% from $21.9 million in Q3 2022[137]. - Total operating costs and expenses decreased by $9.5 million, or 23%, to $31 million in Q3 2023 compared to $40.5 million in Q3 2022[145]. - Operating loss for Q3 2023 was $10.1 million, an improvement of $8.5 million from the operating loss of $18.6 million in Q3 2022[149]. - Adjusted net loss from continuing operations was $6.9 million, a reduction of 70% compared to $23 million in Q3 2022[146]. - Net loss from continuing operations was $13.2 million for Q3 2023, a 45% improvement compared to a net loss of $23.9 million in Q3 2022[153]. - Total revenue decreased by $23.2 million, or 31%, to $50.7 million compared to $73.9 million in the prior year[165]. - Net loss from continuing operations was $31.8 million, a reduction of $102.9 million, or 76%, compared to a loss of $134.7 million in the previous year[165]. Debt and Cash Flow - The sale of the South Carolina Facility to NYDIG was completed on November 9, 2023, for total consideration of approximately $28 million[124]. - Following the sale, Greenidge expects a cash inflow of $3.5 million from the return of its security deposit held by the local utility[125]. - The restructuring of NYDIG debt reduced the principal and accrued interest from $75.8 million to $17.3 million, achieving an aggregate debt reduction of $58.5 million[129]. - The Senior Secured Loan with NYDIG requires only $2.0 million in interest payments for 2023, significantly lower than the $62.7 million that would have been required under previous agreements[130]. - The company anticipates cash resources will be depleted by the end of Q1 2024, requiring additional capital to fund expenses and support working capital needs[202]. - Cash, restricted cash, and cash equivalents totaled $10.7 million as of September 30, 2023[191]. Operational Efficiency - Greenidge's New York Facility benefits from lower natural gas prices due to access to the Millennium Gas Pipeline price hub, enhancing operational efficiency[121]. - Average bitcoin price increased by 32% to $28,086 in Q3 2023 compared to $21,269 in Q3 2022[142]. - Average active hash rate for company-owned miners decreased by 50% to 1,069,816 EH/s compared to 2,149,893 EH/s in the prior period[137]. - The adjusted operating margin improved to -18.4% in Q3 2023 from -80.7% in Q3 2022[161]. Environmental Liabilities - As of September 30, 2023, the company recorded environmental liabilities of $29.4 million for remediation of coal ash pond and landfill sites[227]. - The company has recorded environmental liabilities that are both probable and estimable, with costs subject to change based on various factors[227]. - During the nine months ended September 30, 2023, the company recognized a charge of $1.6 million for the remeasurement of an environmental liability[227]. Impairment and Valuation - The company recognized a noncash impairment charge of $176.3 million for the year ended December 31, 2022, due to the carrying value exceeding the fair value of long-lived assets[223]. - An impairment charge of $4 million was recorded for the three-month period ending September 30, 2023, related to the remaining value of a building classified as Held for Sale[226]. - The fair value of the asset group was estimated to be within an approximate 15% to 20% range based on different valuation approaches[224]. Future Outlook - The company is evaluating future uses of remaining real estate assets in South Carolina, including land and a building not used for cryptocurrency mining[225]. - The company installed approximately 1,500 additional company-owned miners at existing facilities, which is expected to improve profits and liquidity for the remainder of 2023[196]. - The company completed an electrical upgrade at its South Carolina facility, increasing capacity to 44 MW, and amended NYDIG Hosting Agreements to increase the number of miners hosted[197].