Greenidge Generation raises doubt about continuation as going concern

Chicago, Dec. 20 – Bitcoin miner Greenidge Generation Holdings Inc. raised doubt about its ability to continue as a going concern and to manage its liabilities in light of the current operating environment, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

The company has entered into a non-binding term sheet with lender NYDIG ABL LLC for a reduction in debt in exchange for Bitcoin miners.

Specifically, the term sheet contemplates a purchase by NYDIG of miners with approximately 2.8 EH/s in exchange for a debt reduction of $56 million to $68 million.

No definitive agreement has been reached, though, the company cautions.

The company is also contemplating a transaction where the company would transfer miners to NYDIG and then operate the miners on behalf of NYDIG under a hosting services agreement.

As of Nov. 30, Greenidge’s cash and cash equivalents were $22 million, down from $38.5 million two months prior.

The monthly cash burn rate is around $8 million, with around $5.5 million of that total being paid to NYDIG for principal and interest payments.

The current cash burn rate is unsustainable by the company.

Greenidge says that it is at risk of having insufficient cash to support ongoing business operations in the next two months.

An equity raise is being explored. The company is also looking at a disposition of its assets and other transactions.

Potentially, though, the company will need to change course and pursue an in-court restructuring of its liabilities.

The company warns that agreements governing the company’s debt contain covenants that may limit its ability to advantage certain advantageous business opportunities.

In addition to the debt with NYDIG, the Prospect News archive shows that the company sold $25-par notes with an 8½% coupon due 2026. The company initially sold $50 million in a public offering and then a $17 million add-on.

Greenidge is an owner of a vertically integrated Bitcoin mining and power generation facility and is based in Fairfield, Conn.

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