EX-99.1 2 ea022103001ex99-1_gryphon.htm PRESS RELEASE DATED AS OF NOVEMBER 13, 2024

Exhibit 99.1

 

Gryphon Digital Mining, Inc. Reports Third Quarter 2024 Financial Results

 

LAS VEGAS, NV / Gryphon Digital Mining, Inc. (Nasdaq: GRYP) (“Gryphon,” the “Company,” “we,” “our,” and “us”), a bitcoin mining company that is focused on becoming the leader in low-cost, efficient operations, today reported financial results for its quarter ended September 30, 2024.

 

“The third quarter was fundamentally about strengthening our foundation and positioning Gryphon for future success,” said Steve Gutterman, CEO of Gryphon Digital Mining. “Through strategic initiatives, including key leadership appointments and a subsequent debt restructuring with Anchorage that converted approximately $13 million of debt to equity at an approximately 100% premium to our stock price at the time, we believe we’ve laid the groundwork for significant growth ahead.”

 

“Our strengthened leadership team, including Jimmy Vaiopoulos as Chairman and Sim Salzman remaining as CFO, along with Anchorage joining as our largest shareholder, has transformed our operational capabilities,” continued Mr. Gutterman. “We’re particularly gratified that our market capitalization exceeded $40 million as of yesterday’s closing, surpassing NASDAQ listing requirements, which we believe reflects growing market confidence in our strategic direction.”

 

“With this foundational work behind us, we’re energized about our prospects for Q4 and 2025,” added Mr. Gutterman. “We expect that our enhanced financial flexibility and focus on securing low-cost power deals position us to expand our Bitcoin mining operations while pursuing breakthrough opportunities in AI computing. We’ve set ambitious goals to build substantial market value while maintaining strong price per share fundamentals, and we expect to announce several exciting initiatives in the coming months that will demonstrate our commitment to maximizing shareholder value.”

 

Q3 2024 and Recent Highlights

 

●Mining revenues were $3.7 million for Q3 2024, compared to $5.2 million for Q3 2023.

 

●Breakeven Cost1 per Bitcoin in Q3 2024 was $59,213, compared to $22,625 in Q3 2023. The company continues to be focused on Breakeven Costs, which we believe is the best measure of what it costs to mine bitcoin on an operating basis, as opposed to sharing only electricity costs, which leaves out the other costs of mining.

 

●The Company recognized a net loss of $5.9 million in Q3 2024, which includes net non-cash expenses of $3.2 million. Net non-cash expenses consisted of items including: depreciation, employee stock-based compensation expense, fair market value of common stock issued to consultants, unrealized (gain) loss on marketable equity securities, change in the fair value of notes payable and unrealized gain on digital assets. This compares to a net loss in Q3 2023 of $8.1 million, which includes net non-cash expenses of $3.2 million.

 

●Adjusted EBITDA2 was a loss of $2.5 million in Q3 2024, compared to negative Adjusted EBITDA of $4.7 million in Q3 2023.

 

●The Company mined approximately 61 and 176 Bitcoin in the quarters ended September 30, 2024 and 2023, respectively.

 

 

 

 

Balance Sheet Highlights as of September 30, 2024

 

Assets

 

●Cash and cash equivalents: $0.4 million

 

●Bitcoin: $0.6 million

 

●Total current assets: $1.7 million

 

●Total mining assets (including deposits & intangible assets): $5.8 million

 

●Total assets: $7.5 million

 

Liabilities and Stockholders’ Equity

 

●Current liabilities: $26.4 million*

 

●Total liabilities: $26.4 million*

 

Note * - As previously disclosed, subsequent to September 30, 2024, the Company successfully refinanced the bitcoin denominated note of approximately $19 million in exchange for shares of the Company’s common stock and a $5 million principal note that carries a 4.25% interest rate.

 

Conference Call Information

 

Date: November 13, 2024
Time: 4:30 PM Eastern Time
Toll Free: 877-545-0320
International: 973-528-0002
Participant Access Code: 821126
Webcast Link: https://www.webcaster4.com/Webcast/Page/3030/51612

 

Conference Call Replay Information

 

Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 51612
Webcast Replay: https://www.webcaster4.com/Webcast/Page/3030/51612

 

(1) The Company defines Breakeven Cost per Bitcoin as (a) Cost of Revenues (excluding depreciation) divided by (b) total Bitcoin generated and received from the hashrate contributed to the mining pool operator. The Company mined approximately 61 and 176 Bitcoin in the quarters ended September 30, 2024 and 2023, respectively.

 

(2) The Company defines adjusted EBITDA as (a) GAAP net income (loss) plus (b) adjustments to add back the impacts of (1) depreciation and amortization, (2) interest expense, (3) income tax expense (benefit) and (4) adjustments for non-cash and non-recurring items which currently include (i) stock compensation expense, (ii) change in fair value of notes payable and (iii) unrealized (gain) loss on marketable equity securities.

 

2

 

 

Non-GAAP Figures

 

In addition to our results determined in accordance with GAAP, the Company also provides adjusted EBITDA and Breakeven Costs, which are non-GAAP measures. Each of these are not financial measures of performance under GAAP and, as a result, these measures may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. These non-GAAP measures are not meant to be considered in isolation and should be read only in conjunction with our Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K as filed with the Securities and Exchange Commission. Management uses Adjusted EBITDA and Breakeven Costs as a means of understanding, managing, and evaluating business performance and to help inform operating decision making. The Company relies primarily on its condensed consolidated financial statements to understand, manage, and evaluate our financial performance and uses the non-GAAP financial measures only supplementally. Reconciliations for each of these non-GAAP measures to the nearest GAAP financial measures are provided below.

 

Breakeven Analysis

 

   2023   Q3/23   Q3/24 
Mining Revenues  $21,052,000   $5,189,000   $3,689,000 
Bitcoin mined   739    176    61 
Value of one mined bitcoin  $28,487   $29,483   $60,475 
Cost of Revenues (excluding depreciation)  $13,462,000   $3,982,000   $3,612,000 
Cost to mine one bitcoin  $18,217   $22,625   $59,213 

 

For the nine months ended September 30,

 

Reconciliation to Adjusted EBITDA:  2024   2023 
Net loss  $(21,701,000)  $(17,619,000)
Exclude: Depreciation   9,435,000    11,906,000 
Exclude: Interest expense   908,000    530,000 
EBITDA   (11,358,000)   (5,183,000)
Non-cash/non-recurring operating expenses:          
Exclude: Stock based compensation expense   445,000    (629,000)
Exclude: Change in fair value of notes payable   7,089,000    7,607,000 
Exclude: Unrealized (gain) loss on marketable equity securities   293,000    74,000 
Adjusted EBITDA  $(3,531,000)  $1,869,000 

 

3

 

 

For the three months ended September 30,
         
Reconciliation to Adjusted EBITDA:  2024   2023 
Net loss  $(5,948,000)  $(8,086,000)
Exclude: Depreciation   2,896,000    4,067,000 
Exclude: Interest expense   288,000    162,000 
EBITDA   (2,764,000)   (3,857,000)
Non-cash/non-recurring operating expenses:          
Exclude: Stock based compensation expense   97,000    392,000 
Exclude: Change in fair value of notes payable   194,000    (1,342,000)
Exclude: Unrealized (gain) loss on marketable equity securities   21,000    75,000 
Adjusted EBITDA  $(2,452,000)  $(4,732,000)

 

Investor Notice

 

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 1A of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, as updated by our subsequent Quarterly Reports on Form 10-Q. If any of these risks were to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline, and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. See “Cautionary Statements Regarding Forward-Looking Statements” below.

 

Cautionary Statements Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that refer to projections, forecasts or other characterizations of future events or circumstances, including business, financial and operational results, such as, but not limited to, changes in the Company’s balance sheet, shareholder equity, repayment of the Anchorage Digital debt, opportunities in AI computing, regaining NASDAQ compliance, M&A activity and the ability to execute on value-accretive initiatives, and including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

 

The forward-looking statements are based on management’s current expectations and assumptions about future events and financial results and are based on currently available information as to the outcome and timing of future events. The forward-looking statements speak only as of the date of this press release or as of the date they are made. Except as otherwise required by applicable law, Gryphon disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. Gryphon cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Gryphon. In addition, Gryphon cautions you that the forward-looking statements contained in this press release are subject to the risks set forth in our filings with the Securities and Exchange Commission (the “SEC”), including the section titled “Risk Factors” in the Annual Report on Form 10-K filed with the SEC by Gryphon on April 1, 2024, as updated by our subsequent Quarterly Reports on Form 10-Q.

 

INVESTOR CONTACT:

 

Name: James Carbonara
Company: Hayden IR
Phone: (646)-755-7412
Email: james@haydenir.com

 

4

 

 

Gryphon Digital Mining, Inc and Subsidiaries

Condensed Consolidated Balance Sheets

 

   September 30,   December 31, 
   2024   2023 
   (Unaudited)     
Assets        
Cash and cash equivalents  $368,000   $915,000 
Restricted cash   -    8,000 
Accounts receivable   1,000    486,000 
Prepaid expenses   593,000    581,000 
Marketable securities   110,000    403,000 
Digital assets held for other parties   -    908,000 
Digital asset   616,000    2,097,000 
Total current assets   1,688,000    5,398,000 
           
Mining equipment, net   4,737,000    12,916,000 
Intangible asset   100,000    100,000 
Deposits   1,020,000    420,000 
Total assets  $7,545,000   $18,834,000 
           
Liabilities and stockholders’ deficit          
Accounts payable and accrued liabilities  $7,142,000   $3,649,000 
Obligation liability related to digital assets held for other parties   -    916,000 
Notes payable - current portion   19,266,000    14,868,000 
Current liabilities   26,408,000    19,433,000 
           
Stockholders’ deficit          
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none outstanding   -    - 
Common stock, $0.0001 par value, 150,000,000 shares authorized; 41,028,187 and 25,109,629 shares issued and outstanding, respectively.   3,000    2,000 
Additional paid-in capital   49,271,000    46,599,000 
Subscription receivable   -    (25,000)
Accumulated deficit   (68,137,000)   (47,175,000)
Total stockholder’s deficit   (18,863,000)   (599,000)
Total liabilities and stockholders’ deficit  $7,545,000   $18,834,000 

 

5

 

 

Gryphon Digital Mining, Inc and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
Revenues                
Mining activities  $3,689,000   $5,189,000   $16,694,000   $14,992,000 
Management services   -    288,000    -    844,000 
Total revenues   3,689,000    5,477,000    16,694,000    15,836,000 
Cost and expenses                    
Cost of revenues   3,612,000    3,982,000    12,252,000    9,542,000 
General and administrative expenses   2,439,000    804,000    8,728,000    3,250,000 
Stock based compensation expense   97,000    392,000    445,000    (629,000)
Depreciation   2,896,000    4,067,000    9,435,000    11,906,000 
Impairment of digital assets   -    17,000    -    250,000 
Impairment of miners   -    5,430,000    -    5,430,000 
Unrealized (gain) loss on digital assets   90,000    -    (1,295,000)   - 
Realized gain on sale of digital assets   -    (17,000)   -    (484,000)
Total operating expenses   9,134,000    14,675,000    29,565,000    29,265,000 
Loss from operations   (5,445,000)   (9,198,000)   (12,871,000)   (13,429,000)
                     
Other income (expense)                    
Unrealized loss on marketable securities   (21,000)   (75,000)   (293,000)   (74,000)
Realized gain from use of digital assets   -    9,000    -    3,809,000 
Change in fair value of notes payable   (194,000)   1,342,000    (7,089,000)   (7,607,000)
Interest expense   (288,000)   (162,000)   (908,000)   (530,000)
Loss on disposal of asset   -    (2,000)   (146,000)   (55,000)
Merger and acquisition cost   -    -    (394,000)   - 
Other income   -    -    -    267,000 
Total other income (expense)   (503,000)   1,112,000    (8,830,000)   (4,190,000)
                     
Loss before provision for income taxes   (5,948,000)   (8,086,000)   (21,701,000)   (17,619,000)
                     
Provision for income taxes   -    -    -    - 
Net loss  $(5,948,000)  $(8,086,000)  $(21,701,000)  $(17,619,000)
                     
Net loss per share, basic and diluted  $(0.15)  $(0.56)  $(0.58)  $(1.22)
Weighted average shares outstanding - basic and diluted   40,611,068    14,450,688    37,347,047    14,437,279 

 

6

 

 

Gryphon Digital Mining, Inc and Subsidiaries

Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Deficit

For the Nine Months Ended September 30, 2024

 

   Series Seed
Preferred Stock		   Series Seed II
Preferred Stock		   Common Stock   Additional
Paid-in		   Subscription   Accumulated   Total
Stockholders’		 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Receivable   Deficit   Deficit 
Balance as of December 31, 2023   8,845,171   $     -    460,855   $      -    25,109,629   $2,000   $ 46,599,000   $(25,000)  $(47,175,000)  $(599,000)
Revaluation of digital assets   -    -    -    -    -    -    -    -    739,000    739,000 
Common stock issued for cash   -    -    -    -    493,791    -    1,395,000    -    -    1,395,000 
Series Seed Preferred Stock converted to common stock   (8,845,171)   -    -    -    8,845,171    1,000    (1,000)   -    -    - 
Series Seed II Preferred Stock converted to common stock   -    -    (460,855)   -    460,855    -    -    -    -    - 
Common stock issued for vesting of RSUs   -    -    -    -    28,070    -    55,000    -    -    55,000 
Common stock issued for exercise of warrants   -    -    -    -    165,622    -    -    -    -    - 
Common stock issued for acquisition of Akerna’s net book value   -    -    -    -    2,921,362    -    (2,256,000)   -    -    (2,256,000)
Cancelation of stock subscription receivable   -    -    -    -    -    -    (25,000)   25,000    -    - 
Net loss   -    -    -    -    -    -    -    -    (11,744,000)   (11,744,000)
Balance as of March 31, 2024   -    -    -    -    38,024,500    3,000    45,767,000    -    (58,180,000)   (12,410,000)
Common stock issued for cash, net of expenses   -    -    -    -    544,578    -    424,000    -    -    424,000 
Common stock issued for vesting of RSUs   -    -    -    -    140,580    -    212,000    -    -    212,000 
Common stock issued for services   -    -    -    -    1,187,597    -    1,792,000    -    -    1,792,000 
Net loss   -    -    -    -         -    -    -    (4,009,000)   (4,009,000)
Balance as of June 30, 2024   -    -    -    -    39,897,255    3,000    48,195,000    -    (62,189,000)   (13,991,000)
Common stock issued for cash, net of expenses   -    -    -    -    1,046,262    -    974,000    -    -    974,000 
Common stock issued for vesting of RSUs   -    -    -    -    28,070    -    55,000    -    -    55,000 
Common stock issued for liabilities   -    -    -    -    56,600    -    47,000    -    -    47,000 
Net loss   -    -    -    -         -    -    -    (5,948,000)   (5,948,000)
Balance as of September 30, 2024   -   $-    -   $-    41,028,187   $3,000   $ 49,271,000   $-   $(68,137,000)  $(18,863,000)

 

7

 

 

Gryphon Digital Mining, Inc and Subsidiaries

Unaudited Condensed Consolidated Statement of Cash Flows

For the Nine Months Ended September 30, 2024

 

   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss  $(21,701,000)  $(17,619,000)
Adjustments to reconcile net loss to cash (used in) provided by operating activities          
Impairment of digital assets   -    250,000 
Realized gain from sale of digital assets   -    (484,000)
Realized gain from use of digital assets   -    (3,809,000)
Unrealized gain on digital assets   (1,295,000)   - 
Impairment of miners   -    5,430,000 
Depreciation expense   9,435,000    11,906,000 
Forfeiture of restricted stock grants   -    (1,910,000)
Compensation cost related to restricted common stock awards   445,000    1,093,000 
Fair value of common stock issued to consultants   1,708,000    - 
Compensation for services contributed by the Company’s president   -    188,000 
Unrealized loss (gain) on marketable securities   293,000    74,000 
Loss on asset disposal   146,000    55,000 
Change in fair value of notes payable   7,089,000    7,711,000 
Interest expense   891,000    530,000 
Digital asset revenue   (16,695,000)   (14,992,000)
Changes in operating assets and liabilities          
Proceeds from the sale of digital assets   16,649,000    13,958,000 
Accounts receivable   485,000    (114,000)
Prepaid expenses   (283,000)   7,000 
Accounts payable and accrued liabilities   465,000    790,000 
Net cash (used in) provided by operating activities   (2,368,000)   3,064,000 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of mining equipment   (1,075,000)   (1,542,000)
Proceeds from the sale of miners   171,000    - 
Refundable deposit   (600,000)   (360,000)
Net cash used in investing activities   (1,504,000)   (1,902,000)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Payment for insurance payable   (537,000)   (52,000)
Issuance of note payable for insurance premiums   569,000    132,000 
Loan modification payment for BTC note   -    (104,000)
Cash acquired in connection with the reverse recapitalization   500,000    - 
Proceeds from the issuance of common stock - private placement   1,395,000    - 
Proceeds from issuance of common stock - ATM   1,664,000    - 
Cash expenses for issuance of common stock   (266,000)   - 
Net cash provided by (used in) financing activities   3,325,000    (24,000)
           
Net change in cash   (547,000)   1,138,000 
           
Cash-beginning of period   915,000    267,000 
Cash-end of period  $368,000   $1,405,000 
Reconciliation of cash and cash equivalents and restricted cash          
Cash and cash equivalents  $368,000   $1,405,000 
Restricted cash   -    42,000 
Cash and cash equivalents and restricted cash  $368,000   $1,447,000 
Supplemental Disclosures of Cash Flow Information:          
Cash paid for interest  $-   $- 
Cash paid for income taxes  $-   $176,000 
           
Non-Cash investing and financing activities:          
Accrued expenses for issuance of common stock  $321,000   $620,000 
Digital assets used for principal and interest payment of note payable  $3,561,000   $7,005,000 

 

8