Greenidge Generation Holdings Inc. Q2 FY2022 earnings call

• Team delivered strong operational performance in bitcoin production and planned uptime.
• Pivoted strategy to focus on liquidity, concentrating operations at existing sites in South Carolina and New York. Expect at least 3.6 exahash of installed mining capacity by first quarter of 2023 at these two locations, with infrastructure equipment procured and plan fully funded with less than $7.5 million in additional costs.
• Dresden, New York site has 100% uptime in second quarter and over 98% for last 12 months, plans to develop at least 2.1 exahash of mining capacity.
• Spartanburg, South Carolina site plans to develop at least 1.5 exahash of mining capacity by first quarter of 2023, with electrical service upgrade to 50 megawatts expected by then.
• Paused plans to develop future sites, exploring capital led options like JVs, partnerships for pipeline sites.
• At Dresden facility, curtailed certain miners and sold merchant power when power price came close to mining revenue per megawatt hour.
• Fleet efficiency improving, with reduction of older, less efficient miners in second quarter and expected to continue in second half of 2022.

Total revenue for the second quarter rose over 90% compared to the prior year second quarter. Cryptocurrency mining revenue increased 43% compared to the second quarter of 2021, though offset by an approximately 30% lower average bitcoin price. 621 bitcoins were produced during the quarter, almost 100% more than the prior year quarter. Quarter average hashrate increased almost 200% versus the prior year quarter average, but was partially offset by increased average difficulty of over 30%. Adjusted EBITDA in the second quarter was $2.9 million, down from $8.1 million in the second quarter of 2021, and adjusted EBITDA margin declined to 9.2% from 49.9% in the prior year quarter.

• Expect at least 3.6 exahash of installed mining capacity by first quarter of 2023 at existing South Carolina and New York sites.
• Plan for Spartanburg, South Carolina electrical service upgrade to 50 megawatts by first quarter of 2023.
• Plan fully funded with less than $7.5 million expected of additional costs for infrastructure build.
• Amended secured promissory note with B. Riley to extend maturity to June 2023, reduce monthly amortization payments and mandatory prepayments, and revise interest rate to 7.5% from 6%, with current principal balance $16.4 million.

• Price volatility in bitcoin and energy markets impacting mining economics.
• New York DEC denied renewal application for Title V Air Permit at Dresden facility, with lengthy hearing process expected to take a few years at minimum.
• Change in estimate of CCR liability at New York facility with potential for additional changes in future.
• Uncertainty regarding utilization of net operating loss carry forwards from Support.com acquisition.