ABTC 10-K & 10-Q changes, risk factors and insider trading
American Bitcoin Corp. · Nasdaq · Finance Services · CIK 1755953 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We presently, and we expect to continue to be, highly concentrated in Bitcoin. Bitcoin is a highly volatile asset and fluctuations in the price of Bitcoin have in the past influenced, and are likely to continue to influence, our business, financial condition, and results of operations and the value of our securities.”
New heading “If we fail to grow our hashrate, we may be unable to compete and our business, financial condition, and results of operations could suffer.”
New heading “We may be unable to purchase Bitcoin miners at scale or face delays or difficulty in obtaining new Bitcoin miners at scale.”
New heading “We may be subject to additional risks associated with holding Bitcoin for our own account and with pledging our Bitcoin.”
New heading “The further development and acceptance of the Bitcoin network and other digital assets is subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of Bitcoin and other digital asset systems may adversely affect our business, financial condition, and results of operations.”
New heading “Our reliance on third-party mining pool service providers, including Foundry and Luxor, for our mining revenue payouts may have a negative impact on our business, financial condition, and results of operations.”
New heading “From time to time, we may enter into certain hedging transactions to generate income and partially offset volatility in Bitcoin prices, which may expose us to risks associated with such transactions.”
New heading “The Bitcoin reward for successfully uncovering a block will halve several times in the future and Bitcoin’s value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts.”
New heading “The characteristics of Bitcoin have been, and may in the future continue to be, exploited to facilitate illegal activity such as fraud, money laundering, tax evasion, and ransomware scams. Furthermore, the exchanges on which Bitcoin trades are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure than established, regulated exchanges for other assets. Such circumstances may result in a reduction in the price of Bitcoin and can adversely affect our business, financial condition, and results of operations.”
New heading “A failure to properly monitor and upgrade the Bitcoin network’s protocol could damage that network and an investment in our securities.”
New heading “There is a possibility of Bitcoin mining algorithms transitioning to "proof of stake" validation, which could make us less competitive and adversely affect our business, financial condition, and results of operations.”
New heading “If a malicious actor or botnet obtains control of a majority of the processing power active on any digital asset network, including the Bitcoin network, the blockchain may be manipulated in a manner that adversely affects us.”
New heading “Forks in the Bitcoin network may occur in the future, which may affect the value of Bitcoin held by us.”
New heading “Banks and financial institutions may not provide banking services or may cut off services to businesses that provide digital asset-related services or that accept digital assets as payment.”
New heading “Our operations are dependent upon maintaining a good relationship with Hut 8.”
New heading “We expect to raise significant amounts of additional capital to execute our strategy. We may be unable to raise the additional capital needed to operate and grow our business.”
New heading “We may not be able to compete effectively against our current and future competitors.”
New heading “We are subject to risks associated with our need for significant electrical power.”
New heading “Our business may be heavily impacted by political, social, economic, and other events and circumstances in the United States, Canada, or elsewhere.”
New heading “We may be exposed to cybersecurity threats and breaches.”
New heading “We may face the risk of Internet-related disruptions.”
New heading “Our success depends on key personnel whose continued service is not guaranteed.”
New heading “We are an early-stage company with limited operating history.”
New heading “New offerings or lines of business may subject us to additional risks.”
New heading “The pace of technological change continues to accelerate and our ability to react effectively to such change may present significant competitive risks.”
New heading “If we do not accurately predict our facility requirements or if Hut 8 fails to successfully develop and operate facilities at which we may host our miners, it could have a material adverse effect on our business, financial condition and results of operations.”
New heading “We have incurred, and expect to continue to incur, significant costs in connection with the Mergers.”
New heading “We may acquire other businesses and/or assets or form strategic alliances or joint ventures that could negatively affect our operating results, dilute shareholder ownership, increase debt, or cause us to incur significant expenses.”
New heading “We operate in the United States and Canada and engage with third parties outside of the United States, and we may further expand our operations internationally, which may expose us to risks associated with doing business internationally.”
New heading “Risks Related to Certain Regulations and Laws, Including Tax Laws”
New heading “Our operations are subject to various complex legal, regulatory, governmental, and technological uncertainties.”
New heading “The application of the CEA and the regulations promulgated thereunder by the CFTC to our business is unclear and is subject to change in a manner that is difficult to predict.”
New heading “If regulatory changes or interpretations require our registration as a "money services business" under the regulations promulgated by FinCEN under the authority of the Bank Secrecy Act or otherwise under state laws, we may incur significant compliance costs.”
New heading “Regulatory changes reclassifying Bitcoin as a security could lead to our classification as an "investment company" under the Investment Company Act of 1940 and could adversely affect the market price of Bitcoin and the market price of our listed securities.”
New heading “Our interactions with a blockchain may expose us to specially designated nationals or blocked persons and new legislation or regulation could adversely impact our business or the market for digital assets.”
New heading “We may be subject to substantial environmental or energy regulation and may be adversely affected by legislative or regulatory changes.”
New heading “We may be involved in legal proceedings from time to time, which could adversely affect us.”
New heading “Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.”
New heading “Developments regarding the treatment of Bitcoin for applicable U.S. and Canadian federal, state, provincial, local, and other tax purposes could adversely impact our business.”
New heading “Intellectual property rights claims may adversely affect the operation of some or all digital asset networks.”
New heading “We may not protect our intellectual property rights and other proprietary rights effectively.”
New heading “Our intellectual property may infringe claims of third-party intellectual property rights or other proprietary rights, which could adversely affect our business and profitability.”
New heading “Risks Related to Ownership of Our Class A Common Stock”
New heading “The market price of our Class A common stock may be volatile or may decline regardless of our operating performance.”
New heading “Our multi-class capital structure concentrates voting control with Hut 8 and certain of our other principal shareholders, who have the ability to control the direction of our business and significantly influence all matters submitted to our stockholders for approval.”
New heading “Our multi-class capital structure may adversely affect the trading market for our Class A common stock.”
New heading “Hut 8’s interests may conflict with our interests and the interests of our other stockholders.”
New heading “We rely on exemptions from certain Nasdaq corporate governance requirements for controlled companies.”
New heading “Sales of a substantial number of shares of Class A common stock or other securities by our stockholders could cause our Class A common stock price to fall.”
New heading “If equity research analysts do not publish research or reports or publish unfavorable research or reports about us, our business, market, stock price, and trading volume could decline.”
New heading “We incur, and will continue to incur, increased costs as a result of operating as a public company and our management team is required to devote substantial time to compliance initiatives.”
New heading “The historical financial information of Historical ABTC presented herein may not be representative of its results or financial condition if Historical ABTC had been operated as a standalone public company and as a result may not be representative of our results or financial condition.”
New heading “Our Charter includes a forum selection clause, which limits our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or other employees.”
New heading “Anti-takeover provisions in our Charter and Bylaws, as well as provisions of Delaware law, could delay or prevent a change of control.”
New heading “We do not expect to pay dividends on our Class A common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our Class A common stock.”
New heading “Key members of our management team have limited experience managing a public company.”
New heading “Our management will have broad discretion in the use of our cash and cash equivalents and may invest or spend these funds in ways with which you do not agree and in ways that may not increase the value of your investment.”
Removed heading “Described below are certain risks to our business and the industry in which we operate. You should carefully consider the risks described below, together with the financial and other information contained in this Annual Report on Form 10-K and in our other public disclosures. If any of the following risks actually occurs, our business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected. As a result, our future results could differ materially from historical results and from guidance we may provide regarding our expectations of our future financial performance, and the trading price of our common stock could decline.”
Removed heading “Risks Related to Our Business”
Removed heading “Bitcoin price volatility may affect our ability to effectively manage our growth plans and profitability.”
Removed heading “Gryphon’s success depends upon the value of Bitcoin; the value of Bitcoin may be subject to pricing risk and has historically been subject to wide swings.”
Removed heading “Regulatory, commercial and technical uncertainties may influence bitcoin prices.”
Removed heading “Failure to increase our hashrate may reduce our competitiveness and negatively impact our financial performance.”
Removed heading “Gryphon may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in Gryphon’s stock price, financing risk, risk of increased losses or impairments in its investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets.”
Removed heading “The adoption and long-term viability of digital asset networks is uncertain, and a decline in their growth or acceptance could negatively impact our business and the value of our stock.”
Removed heading “Geopolitical and economic crises could lead to increased uncertainty, large-scale selloffs of digital assets and a decline in bitcoin’s value, negatively impacting our business and stock price.”
Removed heading “We face risks related to technological obsolescence, vulnerability of the global supply chain for cryptocurrency hardware, potential trade restrictions and difficulty in obtaining new hardware, which may have a material adverse effect on our business.”
Removed heading “Bitcoin network forks, where the blockchain splits into two separate networks, could cause disruptions and negatively impact our business.”
Removed heading “A 51% attack on the Bitcoin network could undermine security and market confidence.”
Removed heading “Noise generated by our mining operations poses regulatory, legal, operational and reputational risks.”
Removed heading “We may experience liquidity constraints and need additional capital, which may not be available to us on favorable terms, or at all.”
Removed heading “The lack of regulation of digital asset exchanges which Bitcoin, and other cryptocurrencies, are traded on, may expose Gryphon to the effects of negative publicity resulting from fraudulent actors in the cryptocurrency space, and can adversely affect an investment in Gryphon.”
Removed heading “The U.S. political and economic environment could materially impact our business operations and financial performance, and uncertainty surrounding the potential legal, regulatory and policy changes by the new U.S. presidential administration may directly affect us and the global economy.”
Removed heading “We have engaged in, and may continue to engage in, strategic acquisitions and other transactions that could disrupt our business, dilute our stockholders, strain our financial resources and harm our operating results.”
Removed heading “The Bitcoin market is exposed to financially troubled cryptocurrency-based companies.”
Removed heading “The lack of legal recourse and insurance for our digital assets increases the risk of total loss in the event of theft or destruction.”
Removed heading “There is a lack of liquid markets for, and possible manipulation of, blockchain/cryptocurrency-based assets.”
Removed heading “Acceptance and/or widespread use of Bitcoin are uncertain.”
Removed heading “The bitcoin reward for successfully uncovering a block will halve several times in the future and Bitcoin value may not adjust to compensate Gryphon for the reduction in the rewards Gryphon receives from its mining efforts.”
Removed heading “Cryptocurrencies, including Bitcoin, face significant scaling obstacles that can lead to high fees or slow transaction settlement times.”
Removed heading “Transaction fees may decrease demand for Bitcoin and prevent expansion that could adversely impact an investment in Gryphon.”
Removed heading “The price of Bitcoin may be affected by the sale of Bitcoin by other vehicles investing in Bitcoin or tracking Bitcoin markets.”
Removed heading “The development of other cryptocurrencies and/or digital currencies may adversely affect the value of Bitcoin.”
Removed heading “If a malicious actor or botnet obtains control in excess of 50% of the processing power active on any digital asset network, including the Bitcoin network, it is possible that such actor or botnet could manipulate the blockchain in a manner that adversely affects an investment in Gryphon.”
Removed heading “The decentralized nature of cryptocurrency systems may lead to slow or inadequate responses to crises, which may negatively affect Gryphon’s business.”
Removed heading “The impact of geopolitical and economic events on the supply and demand for Bitcoin is uncertain.”
Removed heading “Gryphon faces risks of Internet disruptions, which could have an adverse effect on the price of Bitcoin.”
Removed heading “Fluctuations in the price of bitcoin may significantly influence the market price of our bitcoin holdings and therefore, the price of our common stock.”
Removed heading “If we fail to grow our hash rate, we may be unable to compete, and our results of operations could suffer.”
Removed heading “Gryphon is an early-stage company and has a limited history of generating profits.”
Removed heading “Gryphon may be unable to access sufficient additional capital to fund its operations or for future strategic growth initiatives.”
Removed heading “Gryphon’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about Gryphon’s ability continue as a “going concern.””
Removed heading “Gryphon’s loss of any of its management or advisory team, its inability to execute an effective succession plan, or its inability to attract and retain qualified personnel, could adversely affect Gryphon’s business.”
Removed heading “Gryphon’s bitcoin may be subject to loss, theft or restriction on access.”
Removed heading “Our ability to adopt technology in response to changing security needs or trends and reliance on third party, Bitgo Prime, for custody poses a challenge to the safekeeping of our digital assets.”
Removed heading “Incorrect or fraudulent cryptocurrency transactions may be irreversible.”
Removed heading “Gryphon may be affected by price fluctuations in the wholesale and retail power markets.”
Removed heading “If Gryphon is unable to secure and maintain its power supply at prices or on terms acceptable to it, a material adverse effect on Gryphon’s business, prospects, financial condition, and operating results would occur.”
Removed heading “Gryphon’s business is dependent on a small number of digital asset mining equipment suppliers.”
Removed heading “Mining machines rely on components and raw materials that may be subject to price fluctuations or shortages, including ASIC chips that have been subject to an ongoing significant shortage.”
Removed heading “Gryphon’s reliance primarily on a single model of miner may subject its operations to increased risk of design flaws.”
Removed heading “There are risks related to technological obsolescence, the vulnerability of the global supply chain to Bitcoin hardware disruption, and difficulty in obtaining new hardware, which may have a negative effect on Gryphon’s business.”
Removed heading “Gryphon’s use of third-party mining pools exposes it to additional risks.”
Removed heading “Gryphon relies on hosting arrangements to conduct its business, and the availability of such hosting arrangements is uncertain and competitive and may be affected by changes in regulation in one or more countries.”
Removed heading “The mining data centers at which Gryphon maintains its mining equipment may experience damages, including damages that are not covered by insurance.”
Removed heading “Gryphon may not be able to compete with other companies, some of whom have greater resources and experience.”
Removed heading “Gryphon may not adequately respond to price fluctuations and rapidly changing technology, which may negatively affect Gryphon’s business.”
Removed heading “There is a possibility of Bitcoin mining algorithms transitioning to proof of stake validation and other mining related risks, which could make Gryphon less competitive and ultimately adversely affect Gryphon’s business.”
Removed heading “Gryphon may not be able to realize the benefits of forks. Forks in a digital asset network may occur in the future which may affect the value of bitcoin held by Gryphon.”
Removed heading “The impacts of climate change may result in additional costs or risks.”
Removed heading “Terminations of agreements with hosting partners may materially our operations, financial condition, and results of operations.”
Removed heading “Restrictive covenants in the New Loan Agreement and Notes may limit our operating flexibility and ability to engage in certain transactions that may be in our long-term best interest.”
Removed heading “Risks Related to Governmental Regulation and Enforcement”
Removed heading “As cryptocurrencies may be determined to be investment securities, Gryphon may inadvertently violate the Investment Company Act of 1940 and incur large losses as a result and potentially be required to register as an investment company or terminate operations and Gryphon may incur third-party liabilities.”
Removed heading “Gryphon is subject to an extensive, highly evolving and uncertain regulatory and business landscape and any adverse changes to, or its failure to comply with, any laws and regulations, and adverse business reactions from counterparties could adversely affect its brand, reputation, business, operating results, and financial condition.”
Removed heading “There is no one unifying principle governing the regulatory status of cryptocurrency nor whether cryptocurrency is a security in each context in which it is viewed. Regulatory changes or actions in one or more countries may alter the nature of an investment in Gryphon or restrict the use of digital assets, such as cryptocurrencies, in a manner that adversely affects Gryphon’s business, prospects or operations.”
Removed heading “Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in Bitcoin-related activities or that accept bitcoin as payment, including financial institutions of investors in Gryphon’s common stock.”
Removed heading “Gryphon’s interactions with a blockchain may expose Gryphon to specially designated nationals or blocked persons or cause Gryphon to violate provisions of law that did not contemplate distributed ledger technology.”
Removed heading “Increased scrutiny and changing expectations from stockholders with respect to our environmental, social and governance (“ESG”) practices and the impacts of climate change may result in additional costs or risks.”
Removed heading “Targeted energy regulations and taxes could increase our costs and adversely affect our business.”
Removed heading “Gryphon’s management and compliance personnel have limited experience handling a listed cryptocurrency mining-related services company.”
Removed heading “If completed, the Captus Acquisition may not achieve its intended results and may result in us assuming unanticipated liabilities.”
Removed heading “The transactions contemplated by the Captus Agreement are subject to conditions that may not be satisfied on a timely basis or at all. Failure to complete the transactions contemplated by the Captus Agreement could have material and adverse effects on us.”
Removed heading “We will be subject to business uncertainties while the Captus Acquisition is pending, which could adversely affect our business.”
Removed heading “We expect to incur significant transaction costs in connection with the Captus Acquisition.”
Removed heading “Risks Related to Gryphon’s Securities”
Removed heading “Our stock price is volatile and subject to significant fluctuations.”
Removed heading “The stock price of the Company’s common stock may be volatile or may decline regardless of its operating performance and you may not be able to resell your shares at or above the purchase price.”
Removed heading “Gryphon’s operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause the Company’s stock price to fluctuate or decline.”
Removed heading “Gryphon’s executive officers, directors and principal stockholders, if they choose to act together, will continue to control or significantly influence all matters submitted to stockholders for approval.”
Removed heading “We have received a civil investigative demand from the United States Department of Justice (the “DOJ”) and a notice from the Small Business Administration (the “SBA”) relating to our PPP Loan under the CARES Act related to COVID-19, that the DOJ is reviewing documents related to the PPP Loan and the SBA is reviewing their prior decision to forgive our PPP Loan and may reverse that determination, and a reversal of the determination that we are eligible for forgiveness of the PPP Loan could negatively impact the Company.”
Removed heading “The issuance of shares of our common stock pursuant to the New Loan Agreement, Notes and Advisory Agreement may result in significant dilution to our stockholders.”
Removed heading “Sales of a substantial number of shares of Gryphon’s common stock by Gryphon’s stockholders in the public market could cause Gryphon’s stock price to fall.”
Removed heading “Delaware law and provisions in Gryphon’s amended and restated certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of Gryphon’s common stock.”
Removed heading “Gryphon’s amended and restated certificate of incorporation designate a state or federal court located within the state of Delaware as the exclusive forum for substantially all disputes between Gryphon and its stockholders, which could limit Gryphon’s stockholders’ ability to choose the judicial forum for disputes with Gryphon or its directors, officers or employees.”
Removed heading “To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.”
Removed heading “Gryphon does not currently intend to pay dividends on its common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of Gryphon’s common stock.”
Removed heading “There can be no assurance that we will continue to be able to comply with the continued listing standards of Nasdaq.”
Removed heading “Uncertainty in accounting standards for bitcoin and other cryptocurrencies may lead to financial restatements and business disruptions.”
Removed heading “Gryphon’s management is required to devote a substantial amount of time to comply with public company regulations.”
Largest changes
“Gryphon’s business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance, as well as counterparty risk in the markets in which it operates, including regulatory aspects from financial services, federal energy and other regulators, the SEC, the CFTC, credit, crypto asset custody, exchange, and transfer, cross-border and domestic money and crypto asset transmission, consumer and commercial lending, usury, foreign currency exchange, privacy, data governance, data protection, cybersecurity …”see in full comparison
“Due to our business activities, we may be subject to examinations, oversight, reviews, investigations, and inquiries, many of which have broad discretion to audit and examine our business. Moreover, laws and regulations related to economic sanctions, export controls, anti-bribery and anti-corruption, and other international activities can restrict or limit our ability to engage in transactions or dealings with certain counterparties in, or with, certain countries or territories or in certain activities. …”see in full comparison
“Our business may be heavily impacted by political, social, economic, and other events and circumstances in the United States, Canada, or elsewhere. These include natural disasters, pandemics (like the COVID-19 pandemic), political tensions, acts of terrorism, hostilities, or the perception that hostilities may be imminent, military conflicts, and acts of war and related responses, including sanctions or other restrictive actions. …”see in full comparison
“As cryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently, with certain governments deeming cryptocurrencies illegal, and others allowing their use and trade without restriction. In some jurisdictions, such as in the U.S., digital assets, like cryptocurrencies, are subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements. On March 8, 2022, President Biden announced an executive order on cryptocurrencies, which seeks to establish a unified federal regulatory regime for cryptocurrencies. …”see in full comparison
“The Office of Financial Assets Control ("OFAC") of the U.S. Department of the Treasury requires us to comply with its sanction program and not conduct business with persons named on its specially designated nationals ("SDN list"). However, because of the pseudonymous nature of blockchain transactions, we may inadvertently and without our knowledge engage in transactions with persons named on OFAC’s SDN list. …”see in full comparison
“The Office of Financial Assets Control of the U.S. Department of Treasury (“OFAC”) requires Gryphon to comply with its sanction program and not conduct business with persons named on its specially designated nationals list. However, because of the pseudonymous nature of blockchain transactions, Gryphon may inadvertently and without Gryphon’s knowledge engage in transactions with persons named on OFAC’s specially designated nationals list. …”see in full comparison
Full comparison: every changed paragraph (533)
Described below are certain risks to our business
and the industry in which we operate. You should carefully consider the risks described below, together with the financial and other information
contained in this Annual Report on Form 10-K and in our other public disclosures. If any of the following risks actually occurs, our business,
financial condition, results of operations, cash flows and prospects could be materially and adversely affected. As a result, our future
results could differ materially from historical results and from guidance we may provide regarding our expectations of our future financial
performance, and the trading price of our common stock could decline.
Risks Related to Our Business
Bitcoin price volatility may affect our ability to effectively manage our growth plans and profitability.
The market price of bitcoin
is extremely volatile, and in fiscal 2024 the price range of bitcoin was between approximately $39,000 and $106,000. The cost to mine
a bitcoin is independent of the then current price of bitcoin, so when bitcoin prices are low, the cost per coin to mine may consume much
of our available cash, limiting our ability to invest in expansion, upgrade mining equipment and infrastructure or fund other strategic
initiatives. Additionally, because our revenue is primarily derived from mining bitcoin, our profitability fluctuates in direct correlation
with bitcoin price movements. A decrease in bitcoin’s price results in a corresponding decrease in the value of the bitcoin we mine,
reducing our revenues and profitability on a dollar-for-dollar basis. Given the volatility of bitcoin prices, we are unable to accurately
predict our future growth trajectory or reliably forecast our revenue and profitability for any given reporting period. Our ability to
expand our operations depends on our assumptions regarding bitcoin’s future price. If those assumptions are incorrect, and bitcoin
prices fail to reach or sustain levels high enough to justify our capital expenditures, we may be unable to generate sufficient revenue
to maintain profitability or execute our growth strategy, which could materially and adversely impact our business, financial condition
and results of operations.
Gryphon’s success depends upon the
value of Bitcoin; the value of Bitcoin may be subject to pricing risk and has historically been subject to wide swings.
Gryphon’s operating
results depend on the value of Bitcoin because it is the only cryptocurrency that Gryphon mines. Specifically, Gryphon’s revenues
from its bitcoin mining operations are based on two factors: (1) the number of bitcoin rewards Gryphon successfully mines and (2) the
value of Bitcoin. In addition, Gryphon’s operating results are directly impacted by changes in the value of Bitcoin, because under
the value measurement model, impairment of Bitcoin and realized gains will be reflected in Gryphon’s statement of operations (i.e.,
Gryphon will be marking bitcoin to fair value each closing period). This means that Gryphon’s operating results will be subject
to swings based upon increases or decreases in the value of Bitcoin. Further, Gryphon’s current application-specific integrated
circuit, or ASIC, machines (which Gryphon refers to as “miners”) are principally utilized for mining bitcoin and cannot mine
other cryptocurrencies, such as ether, that are not mined utilizing the “SHA-256 algorithm.” If other cryptocurrencies were
to achieve acceptance at the expense of Bitcoin causing the value of Bitcoin to decline, or if Bitcoin were to switch its proof of work
algorithm from SHA-256 to another algorithm for which Gryphon’s miners are not specialized, or the value of Bitcoin were to decline
for other reasons, particularly if such decline were significant or over an extended period of time, Gryphon’s operating results
would be adversely affected, and there could be a material adverse effect on Gryphon’s ability to continue as a going concern or
to pursue Gryphon’s strategy at all, which could have a material adverse effect on Gryphon’s business, prospects or operations,
and harm investors.
Bitcoin market prices, which
have historically been volatile and are impacted by a variety of factors (including those discussed below), are determined primarily using
data from various exchanges, over-the-counter markets and derivative platforms. Furthermore, such prices may be subject to factors such
as those that impact commodities, more so than business activities, which could be subjected to additional influence from fraudulent or
illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions. Pricing may be the result of,
and may continue to result in, speculation regarding future appreciation in the value of Bitcoin, which inflates and makes its market
prices more volatile or creates “bubble” type risks for Bitcoin.
Regulatory, commercial and technical uncertainties
may influence bitcoin prices.
The market price of bitcoin
is subject to numerous uncertainties, including evolving regulatory frameworks, commercial adoption trends and technical risks, any of
which could negatively impact its value. Regulatory treatment of digital assets remains uncertain in various jurisdictions, and new regulations,
enforcement actions, or interpretations by governmental authorities could diminish bitcoin’s appeal, restrict its use or otherwise
depress its market price.
Beyond regulation, bitcoin’s price is influenced by factors such as:
Even if bitcoin adoption increases
in the short term, there is no guarantee that this growth will be sustained. Since bitcoin exists solely as digital records on the Bitcoin
blockchain, its value is also susceptible to technical risks, including:
Additionally, bitcoin’s
liquidity could be adversely affected if financial institutions, payment processors or market makers withdraw their support for bitcoin-related
services due to regulatory pressure, reputational concerns or operational risks. If any of these risks materialize, they could negatively
impact bitcoin’s market price, which, in turn, would adversely affect our business and financial condition.
Failure to increase our hashrate may reduce our competitiveness and negatively impact our financial performance.
Our ability to earn bitcoin
rewards is directly proportional to our mining power, or hashrate, relative to the total hashrate of the Bitcoin network. As more miners
enter the network and deploy more powerful mining equipment, the global hashrate increases, making it more difficult to successfully mine
bitcoin. To remain competitive, we must continuously invest in expanding our hashrate by acquiring new, more efficient mining hardware.
However, as demand for mining equipment grows, the cost of acquiring and deploying new miners increases, which could limit our ability
to scale. If we are unable to access capital to acquire additional miners, our hashrate may stagnate and we may fall behind our competitors.
If we fail to increase our hashrate at a pace that keeps up with network difficulty growth, our share of total bitcoin mining rewards
will decline, reducing our revenue and negatively impacting our financial performance.
Gryphon may face several risks due to disruptions
in the crypto asset markets, including but not limited to the risk from depreciation in Gryphon’s stock price, financing risk, risk
of increased losses or impairments in its investments or other assets, risks of legal proceedings and government investigations, and risks
from price declines or price volatility of crypto assets.
The use of crypto assets to,
among other things, buy and sell goods and services and complete other transactions is part of a new and rapidly evolving industry that
employs crypto assets based upon a computer generated mathematical and/or cryptographic protocol. The growth of this industry in general,
and the use of crypto assets in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development
or acceptance of developing protocols may adversely affect Gryphon’s operations. The factors affecting the further development of
the industry, include, but are not limited to:
Many crypto asset exchanges
currently do not provide the public with significant information regarding their ownership structure, management teams, corporate practices
or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, crypto asset exchanges,
which may cause the price of Bitcoin to decline. For example, in the first half of 2022, each of Celsius Network LLC, et al. (“Celsius”),
Voyager Digital Ltd., et al. (“Voyager”), and Three Arrows Capital (“Three Arrows”) declared bankruptcy, resulting
in a loss of confidence among participants in the crypto asset ecosystem and negative publicity surrounding crypto assets more broadly.
In November 2022, BlockFi Inc. (“BlockFi”) and FTX Trading Ltd. (“FTX”), the third largest crypto asset exchange
by volume at the time, halted customer withdrawals and shortly thereafter, FTX and its subsidiaries filed for bankruptcy. In December
2022, Core Scientific Inc. (“Core”), one of the largest publicly traded crypto mining companies in the U.S., filed for bankruptcy.
In January 2023, Genesis Global Holdco, LLC, et al. (“Genesis”) filed for bankruptcy.
In response to these events,
the crypto asset markets, including the market for Bitcoin specifically, have experienced extreme price volatility and several other entities
in the crypto asset industry have been, and may continue to be, negatively affected, further undermining confidence in the crypto asset
market and in Bitcoin. These events have also negatively impacted the liquidity of the crypto asset market as certain entities affiliated
with FTX engaged in significant trading activity. If the liquidity of the crypto asset market continues to be negatively impacted by these
events, crypto asset prices, including the price of Bitcoin, may continue to experience significant volatility and confidence in the crypto
asset markets may be further undermined. A perceived lack of stability in the crypto asset exchange market and the closure or temporary
shutdown of crypto asset exchanges due to business failure, hackers or malware, government-mandated regulation or fraud, may reduce confidence
at least in part in crypto asset networks and result in greater volatility in Bitcoin’s value. Because the value of Bitcoin is derived
from the continued willingness of market participants to exchange government-issued currency that is designated as legal tender in its
country of issuance through government decree, regulation or law for Bitcoin, should the marketplace for Bitcoin be jeopardized or disappear
entirely, permanent and total loss of the value of Bitcoin may result. Such a decrease in Bitcoin price may have a material and adverse
effect on Gryphon’s results of operations and financial condition as the results of Gryphon’s operations are significantly
tied to the price of Bitcoin.
The failure or insolvency
of large exchanges like FTX may cause the price of Bitcoin to fall and decrease confidence in the ecosystem, which could adversely affect
an investment in Gryphon. Such market volatility and decrease in Bitcoin price may have a material and adverse effect on Gryphon’s
results of operations and financial condition as the results of Gryphon’s operations are significantly tied to the price of Bitcoin.
As of the date hereof, Gryphon
has not experienced any material impact resulting from the bankruptcy filings of FTX, Three Arrows, Celsius, Voyager, BlockFi, and Genesis
and the attendant disruptions in the crypto asset markets. Genesis is owned by Digital Currency Group Inc. (“DCG”), which
also owns Foundry Digital LLC (“Foundry”), one of Gryphon’s mining pool providers. However, at this time, Gryphon believes
it is not subject to any material risks arising from its previous exposure to Genesis. Other than the Genesis entities, Gryphon (i) has
no direct exposure to any crypto asset entities that have recently filed for bankruptcy; (ii) has no assets that may not be recovered
due to these bankruptcies; and (iii) has no exposure to any other counterparties, customers, custodians or other crypto asset market third
parties known to Gryphon to have (x) experienced material excessive redemptions or withdrawals or suspended redemptions or withdrawals
of crypto assets, (y) the crypto assets of their customers unaccounted for, or (z) experienced material compliance failures.
The adoption and long-term viability of
digital asset networks is uncertain, and a decline in their growth or acceptance could negatively impact our business and the value of
our stock.
Bitcoin and other digital
assets are part of a new and rapidly evolving industry. The long-term growth and viability of digital assets depend on multiple factors,
including:
If bitcoin adoption stagnates
or declines, demand for bitcoin could weaken, which could negatively affect our business. A prolonged lack of growth in bitcoin adoption
could reduce market confidence, leading to lower trading volumes and diminished liquidity. Additionally, bitcoin’s price volatility
undermines its role as a medium of exchange, as retailers are less likely to accept it as a form of payment. Marketplace acceptance of
bitcoin as a medium of exchange and payment method may remain low. The relative lack of acceptance of bitcoin in the retail and commercial
marketplace, or a reduction of such use, limits the ability of end users to use bitcoin to pay for goods and services.
Further, as block rewards
decrease, higher transaction fees may be required to incentivize miners, potentially reducing bitcoin adoption and value. In order to
incentivize miners to continue to contribute processing power to any digital asset network, such network may either formally or informally
transition from a set reward to transaction fees earned upon solving for a block. This transition could be accomplished either by miners
independently electing to record in the blocks they solve only those transactions that include payment of a transaction fee or by the
digital asset network adopting software upgrades that require the payment of a minimum transaction fee for all transactions. If transaction
fees paid for digital asset transactions become too high, the marketplace may be reluctant to accept digital assets as a means of payment
and existing users may be motivated to switch from one digital asset to another digital asset or back to fiat currency. A decline in bitcoin
transactions and adoption could reduce demand, negatively impacting bitcoin’s price and affecting the value of our bitcoin holdings.
Geopolitical and economic crises could lead
to increased uncertainty, large-scale selloffs of digital assets and a decline in bitcoin’s value, negatively impacting our business
and stock price.
Bitcoin is an alternative
to fiat currencies that are backed by central governments, but its value is highly dependent on supply and demand. It is unclear how global
geopolitical and economic crises will affect the adoption and valuation of digital assets. However, such crises may lead to large-scale
acquisitions or sales of digital assets, causing significant price volatility. A large-scale selloff of bitcoin could decrease its value,
directly affecting our business and the price of our common stock. Additionally, broader macroeconomic instability, inflation and regulatory
uncertainty could impact our ability to conduct business efficiently and profitably. A significant decline in bitcoin’s value due
to economic or geopolitical factors could negatively affect our financial condition.
We face risks related to technological obsolescence,
vulnerability of the global supply chain for cryptocurrency hardware, potential trade restrictions and difficulty in obtaining new hardware,
which may have a material adverse effect on our business.
Bitcoin mining hardware experiences
wear and tear over time, requiring periodic repairs or replacement to maintain efficiency. Additionally, as mining technology evolves,
we must invest in newer, more efficient mining equipment to remain competitive, which requires significant capital expenditures.
Further, we have faced complications
related to the import of mining equipment in the past and may face such complications in the future. The global supply of miners is unpredictable
and presently heavily dependent on manufacturers based in China. Geopolitical matters, including the relationship between the United States
and other countries and trade restrictions and tariffs (or the threat of trade restrictions or tariffs), may impact our ability to import
miners or other equipment necessary for our operations. Restrictions or bans on mining equipment from China, whether due to trade restrictions,
national security concerns or geopolitical tensions, could disrupt our supply chain, increase equipment costs and delay our growth plans.
In addition, officials of
the U.S. Customs and Border Protection agency (“CBP”) have broad discretion regarding products imported into the United States,
and the CBP has on occasion detained or seized imported miners and other equipment necessary to the operation of our miners, which has
resulted in significant costs to us. If our imported mining equipment is detained or seized in the future, we may not be able to obtain
adequate replacement parts for our existing miners and other equipment or obtain additional miners and other equipment from manufacturers
on a timely basis or at all, which could have a material adverse effect on our results of operations and financial condition.
Bitcoin network forks, where the blockchain
splits into two separate networks, could cause disruptions and negatively impact our business.
Since the Bitcoin network
is an open-source project, any individual can download the Bitcoin network software and make any desired modifications, which are proposed
to users and miners on the Bitcoin network through software downloads and upgrades and typically posted to the Bitcoin development forum
on GitHub.com. A substantial majority of miners and Bitcoin users must consent to those software modifications by downloading the altered
software or upgrade that implements the changes. Otherwise, the changes do not become a part of the Bitcoin network.
Since the Bitcoin network’s
inception, changes to the network have been accepted by the vast majority of users and miners, ensuring that the network remains a coherent
economic system. However, a developer or group of developers could propose a modification to the Bitcoin network that is not accepted
by a vast majority of miners and users, but that is nonetheless accepted by a substantial population of participants in the Bitcoin network.
In such a case, and if the modification is material or not compatible with the prior version of Bitcoin network software, a fork in the
blockchain could develop and two separate Bitcoin networks could result with one running the pre-modification software program and the
other running the modified version (i.e., a second “Bitcoin” network).
Historically, the Bitcoin
community has worked to merge forked blockchains, but a prolonged or unresolved split could create confusion, disrupt the network and
affect bitcoin’s stability. A fork could decrease confidence in bitcoin, negatively impacting its price and, in turn, our business
and stock value.
A 51% attack on the Bitcoin network could
undermine security and market confidence.
The security of the Bitcoin
network relies on its decentralized nature, which makes it difficult for any single entity to control a majority of the network’s
mining power. However, if a malicious actor or coordinated group were to gain control of more than 50% of the total hashrate, a scenario
known as a “51% attack,” they could theoretically manipulate the network by:
A 51% attack could occur through
several mechanisms, including large-scale mining operations, through which a single entity invests in expansive mining facilities with
enough computing power to control the majority of the network; mining pool dominance, in which mining pool becomes so large that it collectively
controls more than 50% of the network’s hashrate; or botnet-based attacks, in which botnets (volunteers or hacked collections of
computers controlled by networked software coordinating the actions of the computers) are used to hijack computing resources and direct
them toward mining, effectively amassing enough power to launch an attack.
If a 51% attack were successfully
executed, it could lead to a loss of confidence in bitcoin’s security and reliability, causing its price to drop significantly.
Such an event could also prompt regulatory restrictions on cryptocurrency mining and trading, further exacerbating the negative impact
on our business.
Even if a 51% attack does
not occur, the mere perception that such an attack is possible could damage bitcoin’s credibility and discourage institutional adoption.
Given our dependence on bitcoin mining, any loss of trust in the security of the Bitcoin network could materially and adversely affect
our business, financial condition and results of operations.
Noise generated by our mining operations
poses regulatory, legal, operational and reputational risks.
Our mining operations involve
the use of a large number of high-powered miners and cooling systems that generate substantial noise. This noise poses risks to our business,
including community complaints, reputational damage, litigation risk, regulatory risk, operational constraints, increased costs and opposition
to expansion. These risks could lead to fines or penalties imposed by local governments, requirements to implement costly noise mitigation
measures, restrictions on our operating hours, reduction of scale of our operations, stricter noise controls regulations on our operations,
potential shutdown of data centers that cannot meet local noise regulations, damages resulting from lawsuits and difficulty obtaining
necessary permits and approvals for expanding existing data centers or establishing new site operations. These risks may negatively affect
our financial condition and results of operations.
We may experience liquidity constraints
and need additional capital, which may not be available to us on favorable terms, or at all.
Liquidity risk is the possibility
that we will be unable to meet our financial obligations as they come due. We will need to raise additional capital to expand our operations,
pursue our growth strategy in AI and HPC and respond to competitive pressures or unanticipated working capital requirements. We may seek
but fail to obtain additional debt or equity financing on favorable terms, if at all, which could impair our growth and adversely affect
our existing operations. Raising capital through equity financing could dilute existing stockholders and reduce the value of their investment.
Debt financing, on the other hand, could impose restrictive terms, prioritize creditors over stockholders or require us to maintain liquidity
levels or financial ratios that may not align with our business needs or be in the best interest of our stockholders.
The lack of regulation of digital asset
exchanges which Bitcoin, and other cryptocurrencies, are traded on, may expose Gryphon to the effects of negative publicity resulting
from fraudulent actors in the cryptocurrency space, and can adversely affect an investment in Gryphon.
The digital asset exchanges
on which Bitcoin is traded are relatively new and largely unregulated. Many digital asset exchanges do not provide the public with significant
information regarding their ownership structure, management teams, corporate practices, or regulatory compliance. As a result, the marketplace
may lose confidence in, or may experience problems relating to, such digital asset exchanges, including prominent exchanges handling a
significant portion of the volume of digital asset trading. In 2022, FTX and a number of other digital asset exchanges filed for bankruptcy
proceedings after failing to solve financial issues caused by the falling prices of Bitcoin and other cryptocurrencies. FTX and others
became the subjects of investigations by various governmental agencies for, among other things, fraud, which caused a loss of confidence
in cryptocurrency market participants and an increase in negative publicity for the digital asset ecosystem. As a result, many digital
asset markets, including the market for Bitcoin, did and continue to experience increased price volatility. The Bitcoin ecosystem may
continue to be negatively impacted and experience long term volatility if public confidence cannot rebound or decreases again due similar
future events.
These events are continuing
to develop and it is not possible to predict, at this time, every risk that they may pose to Gryphon, Gryphon’s service providers,
or the digital asset industry as a whole. A perceived lack of stability in the digital asset exchange market and the closure or temporary
shutdown of digital asset exchanges due to business failure, hackers or malware, government-mandated regulation, or fraud, may reduce
confidence in digital asset networks and result in greater volatility in cryptocurrency values. These potential consequences of a digital
asset exchange’s failure could adversely affect an investment in Gryphon.
The U.S. political and economic environment
could materially impact our business operations and financial performance, and uncertainty surrounding the potential legal, regulatory
and policy changes by the new U.S. presidential administration may directly affect us and the global economy.
Changes in U.S. political
leadership and economic policies may create uncertainty that materially affects our business and financial performance. Shifts in legal,
regulatory, and trade policies, particularly under a new presidential administration, could disrupt our operations and long-term strategy.
For example, if the U.S. government
establishes a strategic bitcoin reserve, large-scale purchases could create price volatility or artificial price suppression, making our
mining operations less profitable. Conversely, slow or no action in creating such a reserve could limit institutional adoption and negatively
impact bitcoin’s value, which could also harm our financial condition. Additionally, increased government influence over the Bitcoin
network could affect mining difficulty, transaction processing, and other technical aspects, further impacting our business.
We also face risks from trade
policy changes, including tariffs and restrictions on imports of mining equipment. The current administration has imposed, and may continue
to impose, tariffs on imports from key manufacturing regions, increasing costs and disrupting supply chains.
The scope and timing of potential
policy changes remain uncertain, making it difficult to plan for or mitigate these risks. Any such changes could materially and adversely
affect our business, financial condition, and results of operations.
We have engaged in, and may continue to engage in, strategic acquisitions and other transactions that could disrupt our business, dilute
our stockholders, strain our financial resources and harm our operating results.
As part of our growth strategy,
we have pursued strategic transactions, including the Captus Acquisition, miners and data centers. In the future, we may seek additional
opportunities to expand our mining operations, including purchasing energy assets, HPC and AI assets, miners, data centers and other facilities,
potentially from companies in financial distress. Our ability to grow through acquisitions depends on several factors, including the availability
of suitable opportunities at acceptable costs, our ability to compete effectively to attract those opportunities and access to financing.
Acquisitions may require us
to issue common stock, thereby diluting existing stockholders, or take on liabilities from acquired businesses. They may also result in
recording goodwill and intangible assets that require regular impairment testing, which could lead to periodic write-downs. Additionally,
acquisitions often involve significant costs, including integration expenses, restructuring charges and potential litigation risks.
Even when successful, acquisitions
and expansions may take considerable time to deliver anticipated benefits, if at all. Integrating new businesses, technologies, and personnel
can be complex and may divert management’s attention from daily operations. We may also face liabilities related to a target company’s
past operations. Entering new markets where we have little experience could pose additional challenges, particularly if competitors have
stronger market positions. Furthermore, we may struggle to generate sufficient revenue to justify acquisition costs, and the integration
process could disrupt relationships with employees, suppliers and other stakeholders.
Further, we may not be able
to pursue our current acquisition strategy in the future. Beyond energy assets, HPC and AI assets, bitcoin mining and related acquisitions,
we have explored, and may continue to explore, opportunities in adjacent or complementary businesses as market conditions allow. These
ventures may carry similar risks, including operational and financial challenges, and there is no guarantee they will provide the expected
benefits in a timely manner, if at all.
The Bitcoin market is exposed to financially
troubled cryptocurrency-based companies.
The failure of several cryptocurrency
platforms has impacted and may continue to impact the broader cryptocurrency economy; the full extent of these impacts may not yet be
known. Bitcoin is part of the cryptocurrency environment and is subject to price volatility resulting from financial instability, poor
business practices, and fraudulent activities of players in the cryptocurrency market. When investors in cryptocurrency and cryptocurrency-based
companies experience financial difficulty as a result of price volatility, poor business practices, and/or fraud, it has caused, and may
continue to cause, loss of confidence in the cryptocurrency space, reputational harm to cryptocurrency assets, heightened scrutiny by
regulatory authorities and law makers, and a steep decline in the value of Bitcoin, among other material impacts. Such adverse effects
have affected, and may in the future continue to affect, the profitability of Gryphon’s bitcoin mining operations.
The lack of legal recourse and insurance
for our digital assets increases the risk of total loss in the event of theft or destruction.
Our digital assets are not
insured against theft, loss or destruction. If an event occurs where we lose our digital assets, whether due to cyberattacks, fraud or
other malicious activities, we may not have any viable legal recourse or ability to recover the lost assets. Unlike funds held in insured
banking institutions, our digital assets are not protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection
Corporation. If our digital assets are lost under circumstances that render another party liable, there is no guarantee that the responsible
party will have the financial resources to compensate us. As a result, we and our stockholders could face significant financial losses.
Management's Discussion & Analysis (MD&A)
New heading “2025 Highlights”
New heading “Basis of Presentation”
New heading “Kearney (Kearney, Nebraska) and Granbury (Granbury, Texas)”
New heading “Medicine Hat (Medicine Hat, Alberta) and Salt Creek (Orla, Texas)”
New heading “Vega (Amarillo, Texas)”
New heading “Drumheller (Drumheller, Alberta)”
New heading “Key Factors Affecting ABTC’s Performance”
New heading “Price of Bitcoin”
New heading “Bitcoin network difficulty and hashrate”
New heading “Block reward and halving”
New heading “Adjusted EBITDA reconciliation:”
New heading “Income tax benefit (provision)”
New heading “Loss from discontinued operations”
New heading “Years Ended December 31, 2024 and 2023”
New heading “Adjusted EBITDA reconciliation:”
New heading “Cost of revenue”
New heading “Gains on digital assets”
New heading “Income tax (provision) benefit”
New heading “Investing Activities”
New heading “Long-lived Assets”
Removed heading “Breakeven Analysis”
Removed heading “Recent Developments”
Removed heading “Blockfusion Agreement”
Removed heading “Anchorage Loan Agreement”
Removed heading “Mining revenues”
Removed heading “Management services”
Removed heading “General and administrative expenses”
Removed heading “Stock-based compensation expense”
Removed heading “Depreciation expense”
Removed heading “Impairment of digital assets”
Removed heading “Impairment of miners”
Removed heading “Unrealized gain on digital assets”
Removed heading “Realized gain on sale of digital assets”
Removed heading “Unrealized loss (gain) on marketable securities”
Removed heading “Realized gain from use of digital assets”
Removed heading “Change in fair value of BTC Note”
Removed heading “Interest expense”
Removed heading “Loss on disposal of asset”
Removed heading “Merger and acquisition cost”
Removed heading “Gain on settlement of BTC Note”
Removed heading “Capital Expenditures and Other Obligations”
Removed heading “Blockfusion Co-location Mining Services Agreement”
Removed heading “Off-Balance Sheet Arrangements”
Removed heading “Recent Accounting Pronouncements”
Removed heading “Recently Adopted Pronouncements”
Largest changes
“In addition to the Company’s results determined in accordance with GAAP, the Company also provides adjusted EBITDA, which is not a measurement of financial performance under generally accepted accounting principles in the United States. The Company provides investors with reconciliations from net loss to adjusted EBITDA as components of Management’s Discussion and Analysis. …”see in full comparison
“Loss from discontinued operations was nil and $4.8 million for the years ended December 31, 2025 and 2024, respectively. On March 6, 2024, we announced the closure of Hut 8's Drumheller site in Alberta, Canada in connection with restructuring and optimization initiatives designed to strengthen financial performance. The $4.8 million loss primarily consisted of a $3.1 million impairment of long-term assets and $3.3 million of operating losses associated with the site closure, partially offset by a $1.6 million income tax benefit. …”see in full comparison
Full comparison: every changed paragraph (199)
Information regarding market and industry
statistics contained in this Report is included based on information available to the Company that the Company believes is accurate.
It is generally based on industry and other publications that are not produced for purposes of securities offerings or economic analysis.
The Company has not reviewed or included data from all sources and cannot assure investors of the accuracy or completeness of the data
included in this Report. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications
and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services.
The Company does not assume any obligation to update any forward-looking statement. As a result, investors should not place undue reliance
on these forward-looking statements.
The following discussion and analysis are
intended as a review of significant factors affecting the Company’sour financial condition and results of operations for the periods
indicated. The discussion should be read in conjunctiontogether with theour Company’s consolidatedcombined financial statements and the related notes presented
herein. In addition to historical information,and the followingother Management’sfinancial Discussioninformation andincluded Analysiselsewhere ofin Financialthis ConditionAnnual andReport. Results
ofThis Operationsdiscussion contains forward-looking statements that involve risks and uncertainties. ActualOur actual business, financial condition, and results of operations could differ significantlymaterially from
those expressed, implied or anticipated in these forward-looking statements as a result of certainvarious factorsfactors, including those discussed hereinbelow and anyelsewhere other
periodicin reportsthis filedAnnual andReport, toparticularly under "Item 1A. Risk Factors." See also "Cautionary Note Regarding Forward-Looking Statements" elsewhere in this Annual Report. Our historical results are not necessarily indicative of the results that may be filedexpected withfor any period in the Securities and Exchange Commission.future.
Business Overview
Our business objective is Bitcoin accumulation, and we aim to pursue that goal through a multi-pronged strategy that combines efficient Bitcoin mining, disciplined Bitcoin reserve expansion, and focused ecosystem engagement. We believe Bitcoin represents an emerging institutional-grade asset class that lacks a clear category leader in the form of a scaled, publicly traded platform purpose-built around Bitcoin accumulation, network participation, and ecosystem development. We are building American Bitcoin with the objective of becoming that platform.
2025 Highlights
Scaled Bitcoin Reserve. As of December 31, 2025, we accumulated approximately 5,401 Bitcoin in reserve, positioning us among the top 20 publicly traded Bitcoin treasury companies based on total Bitcoin holdings. As of March 25, 2026, we accumulated approximately 6,963 Bitcoin in reserve, positioning us among the top 16 publicly traded Bitcoin treasury companies based on total Bitcoin holdings. Our Bitcoin in reserve included 2,776 and 3,090 Bitcoin pledged for miner purchases as of December 31, 2025 and March 25, 2026, respectively.
Expansion of Mining Fleet. In August 2025, we purchased 16,299 Bitcoin miners, representing approximately 14.02 EH/s and in September 2025, we purchased an additional 981 Bitcoin miners, representing approximately 0.84 EH/s. Subsequently, in February 2026, we purchased 11,298 Bitcoin miners, representing approximately 3.05 EH/s. Upon the delivery and deployment of the recently purchased miners, our total owned fleet is expected to increase to approximately 89,000 miners, representing approximately 28.1 EH/s at an average fleet efficiency of 16.0 J/TH, and our operational fleet is expected to increase to approximately 59,000 miners, representing approximately 25.0 EH/s at an average efficiency of 14.1 J/TH.
Launch of 2025 At-The-Market Offering Program. On September 3, 2025, we entered into a Controlled Equity Offering Sales Agreement to establish an at-the-market equity program (the "2025 ATM"), allowing us to offer and sell up to $2.1 billion of our Class A common stock from time to time. As of December 31, 2025, we issued and sold an aggregate of 65,485,198 shares of our Class A common stock under the 2025 ATM for gross proceeds of approximately $240.5 million. Issuance costs incurred under the 2025 ATM totaled approximately $2.8 million through December 31, 2025. From January 1, 2026 to March 25, 2026, we issued and sold an aggregate of 83,955,130 shares of our Class A common stock under the 2025 ATM for gross proceeds of approximately $110.8 million and incurred issuance costs of approximately $0.4 million.
Merger with Gryphon. On May 9, 2025, Gryphon, Merger Sub Inc., Merger Sub LLC, and Historical ABTC entered into the Merger Agreement. On September 3, 2025, in accordance with the terms of the Merger Agreement, among other things, the Mergers were completed and Gryphon was renamed to American Bitcoin Corp. after the Closing. This transaction was accounted for under the acquisition method as a reverse acquisition with Historical ABTC identified as the accounting acquirer for financial statement reporting purposes.
Basis of Presentation
References to "we," us," our," and similar terms herein refer to:
(i) the “ASIC Compute” sub-segment of Hut 8’s “Compute” segment prior to the effectiveness of the Transactions on March 31, 2025;
(ii)
Historical ABTC following the effectiveness of the Transactions on April 1, 2025 until the consummation of the Mergers on September 3, 2025; and (iii) American Bitcoin Corp. (formerly known as Gryphon Digital Mining, Inc.) following the consummation of the Mergers on September 3, 2025.
On March 31, 2025, Hut 8, ADC, and the stockholders of ADC entered into a Contribution and Stock Purchase Agreement, pursuant to which Hut 8 contributed to ADC substantially all of Hut 8’s wholly-owned ASIC miners, in exchange for newly issued Class B Common Stock of ADC, representing 80% of the total and combined voting power and 80% of the issued and outstanding equity interests of ADC after giving effect to the issuance. In connection with the Transactions, ADC was renamed American Bitcoin Corp. and became a majority-owned subsidiary of Hut 8.
Until the effectiveness of the Transactions on March 31, 2025, we historically operated as the “ASIC Compute” sub-segment of Hut 8’s “Compute” segment and not as a standalone company; therefore, separate financial statements had not historically been prepared for us prior to April 1, 2025. Our Combined Financial Statements represent the historical assets, liabilities, operations, and cash flows directly attributable to us starting April 1, 2025; the prior periods have been prepared on a carveout basis through the use of a management approach from Hut 8’s Consolidated Financial Statements and accounting records and are presented on a standalone basis as if the operations had been conducted independently from Hut 8.
Following the effectiveness of the Transactions on March 31, 2025, we began operating as a standalone entity with our own accounting and financial records; therefore, starting April 1, 2025, our results of operations are the results directly attributed to our standalone operations rather than the Bitcoin mining operations of Hut 8. Our Combined Balance Sheets as of December 31, 2025 reflects the assets and liabilities that we directly own or are legally obligated to satisfy post-Transactions.
Prior to the effectiveness of the Transactions on March 31, 2025, all revenues and costs, as well as assets and liabilities directly associated with Hut 8’s Bitcoin mining sub-segment activities were included in our Combined Financial Statements, including Hut 8’s strategic Bitcoin reserve (which remained with Hut 8 following the effectiveness of the Transactions). Additional costs allocated to us include corporate general and administrative expenses, which consisted of various categories, including but not limited to: employee compensation and benefits, professional services, facilities and corporate office expenses, information technology, interest expenses, and stock-based compensation. The corporate and general administrative expenses allocated were primarily based on a percentage of revenue basis that was considered to be a reasonable reflection of the utilization of the services provided or benefit received during the periods presented, depending on the nature of the service received. Management believes the assumptions underlying our Combined Financial Statements, including the expense methodology and resulting allocation, are reasonable for all periods presented. However, the allocations may not include all of the actual expenses that would have been incurred by us had we operated as a standalone entity during such periods and may not reflect our results of operations, financial position, and cash flows had we been a standalone company during the periods presented. Actual costs that might have been incurred had we been a standalone company would depend on a number of factors, including our organizational structure, what corporate functions we might have performed directly or outsourced, and strategic decisions we might have made in areas such as executive management, legal, and other professional services, and certain corporate overhead functions. These costs also may not be indicative of the expenses that we may incur in the future or would have incurred if we had obtained these services from a third party.
All intracompany transactions within our operations prior to the effectiveness of the Transactions on March 31, 2025 have been eliminated. All intercompany transactions between us and Hut 8 on or before March 31, 2025 are considered to be effectively settled in our Combined Financial Statements at the time the transactions are recorded. The total net effect of these intercompany transactions considered to be settled are reflected in our Combined Statement of Cash Flows within financing activities and in our Combined Balance Sheets as net Hut 8 investment. At March 31, 2025, as described in the description of the Transactions above, the total net Hut 8 investment has been settled.
Prior to the effectiveness of the Transactions on March 31, 2025, our equity balance in our Combined Financial Statements represents the excess of total liabilities over assets. Net Hut 8 investment is primarily impacted by contributions from Hut 8 that are the result of net funding provided by or distributed to Hut 8.
Prior to the effectiveness of the Transactions on March 31, 2025, cash was managed through bank accounts controlled and maintained by Hut 8. We did not have legal ownership of any bank accounts containing cash balances prior to March 31, 2025. As such, cash held in commingled accounts with Hut 8 is presented within net Hut 8 investment on our Combined Balance Sheets. Subsequent to March 31, 2025, we have set up our own legally separate bank accounts to appropriately directly settle our liabilities and to manage our own cash.
Prior to the effectiveness of the Transactions on March 31, 2025, we were not a co-obligor on Hut 8’s third-party, long-term debt obligations nor were we expected to pay any portion of Hut 8's third-party, long-term debt. However, proceeds from Hut 8’s third-party debts were used to finance our purchase of Bitcoin miners or directly used for our Bitcoin mining-related activities and were therefore included in our Combined Financial Statements. While we are not a legal obligor, certain Bitcoin mining assets of ours were pledged as collateral as disclosed in Note 5. Digital Assets. Following the effectiveness of the Transactions on March 31, 2025, we are no longer connected to any of Hut 8's third-party debt obligations.
The Combined Financial Statements included in this Annual Report have been prepared in accordance with generally accepted accounting principles, in the United States ("GAAP").
Bitcoin Mining
We generate revenue from Bitcoin rewards by providing computation services to third-party mining pool operators, which combine the computing power of Bitcoin miners to increase the chance of solving a block and getting paid by the network. We provide the service of performing computations of our Bitcoin miners to these mining pool operators and receive in return a payout of Bitcoin based on a contractual formula which primarily calculates the computing power provided to the mining pool as a percentage of the total computing power of the network, regardless of whether the mining pool actually receives the Bitcoin award from the network.
As of December 31, 2025, we operated our Bitcoin miners at four sites under the MCSA with Hut 8:
Alpha (Niagara Falls, New York);
Medicine Hat (Medicine Hat, Alberta);
Salt Creek (Orla, Texas); and
Vega (Amarillo, Texas)
Kearney (Kearney, Nebraska) and Granbury (Granbury, Texas)
Until April 30, 2024, we also had Bitcoin mining operations hosted at sites in Kearney, Nebraska and Granbury, Texas.
Medicine Hat (Medicine Hat, Alberta) and Salt Creek (Orla, Texas)
During February and March 2025, mining activity at our Medicine Hat and Salt Creek sites was reduced due to a planned fleet upgrade, which was completed on April 4, 2025. The upgrade resulted in the deployment of higher efficiency Bitcoin miners, improving the efficiency of our Bitcoin mining operations.
Vega (Amarillo, Texas)
In August 2025, we entered into service orders with Hut 8 pursuant to the MCSA and MMSA to host additional Bitcoin miners at Hut 8’s Vega site in Amarillo, Texas, most of which were delivered in August with the remainder delivered in September 2025. Prior to August 2025, we did not mine at Hut 8’s Vega site.
Drumheller (Drumheller, Alberta)
We previously mined Bitcoin at Hut 8’s site in Drumheller, Alberta, which had been non-operational since March 2024. In March 2026, Hut 8 completed the reenergization of the Drumheller site, where we expect to deploy 11,298 Bitcoin miners to resume Bitcoin mining operations.
Key Factors Affecting ABTC’s Performance
Price of Bitcoin
Our business is heavily dependent on the price of Bitcoin, which is traded globally and has historically experienced significant volatility. We generate revenue from Bitcoin rewards we earn through third-party mining pool operators and Bitcoin we acquire through at-market purchases and strategic transactions to further build our strategic reserve. Under ASU 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"), Bitcoin is revalued at its fair value at the end of each reporting period, with changes to fair value recognized in net (loss) income. As a result, fluctuations in the price of Bitcoin may significantly impact our results of operations.
Bitcoin network difficulty and hashrate
Our business is not only impacted by the volatility in Bitcoin prices, but also by increases in the competition for Bitcoin production, specifically for Bitcoin mining. This increased competition is described as the network hashrate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the Bitcoin blockchain, and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires Bitcoin miners, like us, to upgrade our equipment to remain profitable and compete effectively with other miners. Conversely, a decline in network hashrate results in a decrease in difficulty, increasing mining proceeds and profitability.
Block reward and halving
The current Bitcoin reward for solving a block is 3.125 Bitcoin. The Bitcoin network is programmed such that the Bitcoin block reward is halved every 210,000 blocks mined, or approximately every four years. This reduction in reward spreads out the release of Bitcoin over a long period of time as fewer Bitcoin are mined with each halving event. Bitcoin halving events impact the number of Bitcoin we mine which, in turn, may have a potential impact on our results of operations. The last halving event occurred in April 2024, and the next halving event is expected to occur in 2028.
Power costs
Power costs are a significant component of our cost to mine a Bitcoin. Power costs can be highly volatile and sensitive to various factors outside of our control. We are subject to variable power prices and market rate fluctuations through our MCSA with Hut 8, through which power costs are incurred as a pass-through expense. Increased power costs impact the profitability of our Bitcoin mining operations.
In addition to our results determined in accordance with GAAP, we rely on Adjusted EBITDA to evaluate our business, measure our performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net loss or income, adjusted for impacts of interest expense, income tax benefit or provision, depreciation and amortization, loss on sale of property and equipment, gain on derivatives, gain on warrant liability, gain on debt extinguishment, the removal of non-recurring transactions, loss from discontinued operations, net of income tax benefit, stock-based compensation expense, and foreign exchange loss in the period presented. You are encouraged to evaluate each of these adjustments and the reasons that our Board and management team consider them appropriate for supplemental analysis.
Our Board and management team use Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense and income), asset base (such as depreciation and amortization), and other items (such as non-recurring transactions) that impact the comparability of financial results from period to period.
Net (loss) income is the GAAP measure most directly comparable to Adjusted EBITDA. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, its definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
For a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see "—Results of Operations" below.
Founded in October 2020,
Gryphon has traditionally been a bitcoin mining company based in Las Vegas, Nevada. Gryphon launched its mining operations in September
2021 upon the receipt of the first of 12 batches of 600 Bitmain S19j Pro Antminers. Gryphon’s current revenue model is to mine
and hold bitcoin, and then sell only the bitcoin that is necessary to pay its operating expenses and to reinvest in operational expansion.
The bitcoin that is sold to pay operating expenses and to reinvest in operational expansion is typically sold within 24-hours of receipt.
Gryphon operates approximately 9,660 bitcoin ASIC mining computers,
referred to as “miners,” from Bitmain Technologies Limited (“Bitmain”) that Gryphon has installed at third-party
hosted mining data centers located in New York and Pennsylvania. Revenue generated by the mining of bitcoin is measured on a dollar per
megawatt-hour (“MWh”) basis and is variable based on the price of Bitcoin, the measure of difficulty, transaction volume and
global hash rates.
For the year ended December
31, 2024 and 2023, Gryphon mined approximately 334 and 739 bitcoins, respectively. While Gryphon does not have any plans to acquire digital
assets other than bitcoin, it may do so in the future.
Breakeven Analysis
Below is a breakeven analysis
of Gryphon’s mining operations for years ended December 31, 2024 and 2023:
The breakeven analysis is
computed by taking the cost of revenues for the given period and dividing that sum by the number of Bitcoin Equivalent Coins Generated
during the same period. For instance, in (2024 the $15,818,000 cost of revenues is divided by the 334 Bitcoin Equivalent Coins Generated,
resulting in an average of $47,359 per coin). The BTC Equivalent calculation labeled as “Total BTC Equiv” in the table, is
determined by combining Gryphon’s bitcoin-mined during the period with the bitcoin equivalent amount of revenue earned from the
Sphere MSA. To calculate the latter, the revenue earned from the Sphere MSA during the period is divided by the average bitcoin price
as quoted by the Principal Market for that same period (labeled as “MSA BTC Equiv” in the table). The breakeven analysis is
an operational metric that does not take capital expenditures or financing mechanics into consideration. The calculation only considers
direct operational costs, such as electricity and hosting. The mining equipment was originally financed primarily through equity capital
raises and cash flows resulting from the sale of bitcoin generating by mining operations. As of December 31, 2024, there were no financing
agreements outstanding related to financing of mining equipment.
The breakeven analysis is
a non-GAAP measure, similar to the way the gold industry reports gold-equivalent ounces to provide uniform measure of various revenue
streams from different commodities (such as gold, copper, nickel, etc.). Much like the gold industry, the purpose of this calculation
is to offer the reader a bitcoin-equivalent datapoint for Gryphon’s two revenue streams within the context of its primary revenue
stream. This enables readers to easily compare Gryphon’s operations with other bitcoin mining companies. By dividing the total
cost of revenues by the number of bitcoin-equivalent coins generated, one arrives at the breakeven point for total BTC equiv. Therefore,
if Gryphon sells a bitcoin at the same price, it would have achieved a breakeven.
The breakeven cost of mining
bitcoin is influenced primarily by two factors. First, the cost of electricity sourced from Gryphon’s hosting providers, which
encompasses a combination of pass-through market electricity prices and profit-sharing arrangements. Second, it is affected by the global
hashrate of the Bitcoin network. Over the twelve-month period through the fourth quarter of 2024, the cost of electricity plus the profit-sharing
arrangement in place with the hosting provider has fluctuated due to seasonality from $0.0720 per kilowatt hour in the fourth quarter
of 2023 to $0.0447 per kilowatt hour in the fourth quarter of 2024, reaching a high of $0.0905 per kilowatt hour during Q1 of 2024. In
addition, the global hashrate of the Bitcoin network has shown a consistent upward trend, with sequential increases of 21.6%, 19.0%,
6.8% and 4.3% over the last four quarters ending December 31, 2024. This increase in the global hashrate has led to fewer bitcoins being
mined for the same amount of energy consumption. The combined effect of these changes in the two key cost drivers has resulted in an
increase in the overall breakeven level as of December 31, 2024 compared to December 31, 2023.
Recent Developments
What changed in the latest 10-Q
Risk Factors
As of the date of this Quarterly Report, there have been no material changes from the risk factors set forth in Part I, Item IA of the Annual Report. We are subject to various risks and uncertainties that could materially adversely affect our business, financial condition, results of operations, and the trading price of our Class A common stock. You should carefully read and consider the risks and uncertainties included in the Annual Report, together with all of the other information in the Annual Report and this Quarterly Report, including "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and our combined financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business, financial condition, or results of operations. The factors discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Income tax provision”
New heading “Results of Operations”
New heading “Six Months Ended June 30, 2026 and 2025”
New heading “Adjusted EBITDA reconciliation:”
New heading “Cost of revenue”
Removed heading “General and administrative expenses”
Largest changes
Full comparison: every changed paragraph (42)
Energization of Drumheller. In April 2026, we completed the delivery and deployment of ~11,298 Bitmain miners, representing 3.05 exahash per second ("EH/s") at 13.5 joules per terahash ("J/TH"), at the Drumheller site.
Reverse Stock Split. On June 22, 2026, at our Annual Meeting of Stockholders, our stockholders approved a proposal to authorize our board of directors to amend our Second Amended and Restated Certificate of Incorporation, as Amended (the "Charter") to effect a reverse stock split at a ratio within a range of 1-for-5 and 1-for-40 (or any number in between), as determined by our board of directors in its discretion. Following the completion of the Annual Meeting of Stockholders, on June 22, 2026, our board of directors approved the reverse stock split at a ratio of 1-for-15. On July 2, 2026, we filed an amendment to our Charter to effect a reverse stock split at a ratio of 1-for-15 of our outstanding shares of common stock. Our Class A common stock began trading on a split-adjusted basis under the symbol "ABTC" on July 6, 2026.
Scaled Bitcoin Reserve. As of MarchJune 31,30, 2026, we accumulated approximately 7,0218,000 Bitcoin in reserve, positioning us among the top 16 publicly traded Bitcoin treasury companies based on total Bitcoin holdings. Our Bitcoin in reserve included 3,090 Bitcoin pledged for miner purchases as of MarchJune 31,30, 2026.
Expansion of Mining Fleet. In February 2026, we purchased ~11,298 Bitcoin miners, representing 3.05 exahash per second ("EH/s") at 13.5 joules per terahash ("J/TH"). Our operational fleet, which reflects the portion of the owned fleet that is installed and energized, grew to approximately 59,000 miners, representing approximately 25.0 EH/s at an average efficiency of 14.1 J/TH. The delivery and deployment of the additional Bitcoin miners was completed in April 2026, increasing our total owned fleet capacity from 25.0 to 28.1 EH/s while improving overall portfolio efficiency from 16.3 to 16.0 J/TH.
Following the effectiveness of the Transactions on March 31, 2025, we began operating as a standalone entity with our own accounting and financial records; therefore, starting April 1, 2025, our results of operations are the results directly attributed to our standalone operations rather than the Bitcoin mining operations of Hut 8. Our Unaudited Condensed Consolidated and Combined Balance Sheets as of MarchJune 31,30, 2026 reflects the assets and liabilities that we directly own or are legally obligated to satisfy post-Transactions.
As of MarchJune 31,30, 2026, we operated our Bitcoin miners at five sites under the Master Colocation Services Agreement (the "MCSA") with Hut 8:
In August 2025, we entered into service orders with Hut 8 pursuant to the MCSA and the Master Managed Services Agreement (the "MMSA") to host additional Bitcoin miners at Hut 8’s Vega site in Amarillo, Texas, most of which were delivered in August 2025 with the remainder delivered in September 2025. Prior to August 2025, we did not mine at Hut 8’s Vega site.
In March 2026, Hut 8 reenergized its site in Drumheller, Alberta in anticipation of the delivery and deployment of approximately 11,298 Bitcoin miners, representing 3.05 exahash per second ("EH/s") at 13.5 joules per terahash ("J/TH"). The site, which had previously mined Bitcoin, had been non-operational since March 2024 due to elevated energy costs and underlying voltage issues impacting profitability. Deployment was completed in April 2026, enabling the addition of 3.05 EH/s of Bitcoin mining capacity and increasing our operating fleet capacity from 21.9 to 25.0 EH/s, while maintaining a consistent efficiency of 14.1 J/TH. As a result, our total fleet capacity increased from 25.0 to 28.1 EH/s, with overall portfolio efficiency improving to 16.0 J/TH.
In addition to our results determined in accordance with GAAP, we rely on Adjusted EBITDA to evaluate our business, measure our performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net loss,loss or income, adjusted for impacts of income tax (provision) benefit, depreciation and amortization, loss on sale of property and equipment, gain on derivatives, gain on warrant liability, the removal of non-recurring transactions, and stock-based compensation expense in the period presented. You are encouraged to evaluate each of these adjustments and the reasons that our Board and management team consider them appropriate for supplemental analysis.
Net loss or income is the GAAP measure most directly comparable to Adjusted EBITDA. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, its definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
Three Months Ended MarchJune 31,30, 2026 and 2025
(1) There were no non-recurring transactions for the three months ended MarchJune 31,30, 2026. Non-recurring transactions for the three months ended MarchJune 31,30, 2025 represent approximately $1.3$0.9 million of transaction costsMerger related totransaction the Contributions.costs.
Revenue
Revenue was $62.1$67.0 million and $12.3$30.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. This $49.8$36.7 million increase was primarily duedriven toby improvedhigher miningBitcoin efficiencies at the Medicine Hat and Salt Creek sitesproduction following our fleet upgrade. The upgrade included the installation of higher-efficiency machines and targeted infrastructure enhancements at Hut 8's sites to support higher rack-level power density. In addition, deployment of Bitcoin miners at the Vega site in August and September 20252025, which added approximately 14.86 EH/s to our mining fleet, and at the Drumheller site in March and April 2026, which added approximately 3.05 EH/s to our mining fleet. As a result, Bitcoin production increased to 817approximately 932 Bitcoin mined during the three months ended MarchJune 31,30, 2026, compared to 135approximately 308 Bitcoin mined during the three months ended MarchJune 31,30, 2025. This increase was partially offset by a decrease in the average revenue per Bitcoin mined to approximately $76,077$71,932 from approximately $91,500$98,425 for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Cost of revenue was $29.6$34.0 million and $11.7$15.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. This $17.9$18.7 million increase was primarily due to higher uptime resulting from the fleet upgrade that was completed in April 2025 at the Medicine Hat and Salt Creek sites. It was also driven by ourhigher energy consumption following the deployment of the Bitcoin miners at the Vega site in August and September 2025, which added approximately 14.86 EH/s to our mining fleet, and the Drumheller site in March and April 2026, which added approximately 3.05 EH/s to our mining fleet.
Depreciation and amortization expense was $26.6$28.2 million and $6.4$10.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The $20.2$18.2 million increase was primarily attributable to higher depreciation expense resulting from the fleet upgrade and the deployment of the Bitcoin miners at the Vega site in August and September 2025, and at the Drumheller site in March and April 2026 which increased our depreciable asset base.
General and administrative expenses
General and administrative ("G&A") expenses were $6.9$7.7 million and $14.4$3.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, representing aan decreaseincrease of $7.5$4.1 million. The decreaseincrease was primarily driven by (i) a $2.7$1.6 million decrease in general, marketing, and other administrative expenses due to streamlined back-office operations, (ii) a $2.3 million decreaseincrease in salaries and benefits dueas toa reducedresult of an increase in headcount, (iiiii) a $1.8 million decrease in stock-based compensation expense, and (iv) a $1.3 million decrease in transaction costs, partially offset by a $0.8$1.5 million increase in insurance expense due to higher coverage requirements as a standalone public company.company, and (iii) a $0.8 million increase in stock-based compensation expense, as no stock-based compensation plan was in place during the prior-year period.
Loss on digital assets werewas $117.2 million and $112.4$71.2 million for the three months ended MarchJune 31,30, 2026 and 2025,gains respectively.on digital assets were $3.0 million for the three months ended June 30, 2025. In connection with the Transactions on March 31, 2025, Hut 8's Bitcoin remained with Hut 8. As a result, immediately following the effectuation of the Transactions, we held no Bitcoin on our balance sheet. Starting April 1, 2025, we began to build our own strategic Bitcoin reserve. In the three months ended MarchJune 31,30, 2026, Bitcoin price declined from approximately $87,498$68,222 to approximately $68,222.$59,847. In the three months ended MarchJune 31,30, 2025, Bitcoin price declinedincreased from approximately $93,354$82,534 to approximately $82,534.$107,173.
Other income was $37.4$18.3 million and $20.9 millionnil for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The $16.5$18.3 million increase was primarily driven by a $16.4$18.3 million increase in gain on derivatives related to the Bitcoin redemption and put options with Bitmain.
Income tax provision
Income tax provision was $1.4 million and $1.0 million for the three months ended June 30, 2026 and 2025, respectively. This $0.4 million decrease in income tax benefit was primarily due to a change in valuation allowance, reflecting management's assessment of the extent to which deferred tax assets are more likely than not to be realized.
Results of Operations
Six Months Ended June 30, 2026 and 2025
Adjusted EBITDA reconciliation:
(1) There were no non-recurring transaction costs for the six months ended June 30, 2026. Non-recurring transactions for the six months ended June 30, 2025 represent approximately $2.2 million of transaction costs related to the Contributions.
Revenue was $129.1 million and $42.6 million for the six months ended June 30, 2026 and 2025, respectively. This $86.5 million increase was primarily due to the deployment of Bitcoin miners at the Vega site in August and September 2025, which added approximately 14.86 EH/s to our mining fleet, and the deployment of Bitcoin miners at the Drumheller site in March and April 2026, which added approximately 3.05 EH/s to our mining fleet. As a result, Bitcoin production increased to approximately 1,749 Bitcoin mined during the six months ended June 30, 2026, compared to approximately 443 Bitcoin mined during the six months ended June 30, 2025. This increase was partially offset by a decrease in the average revenue per Bitcoin mined to approximately $73,868 from approximately $96,321 for the six months ended June 30, 2026 and 2025, respectively.
Cost of revenue
Cost of revenue was $63.6 million and $27.0 million for the six months ended June 30, 2026 and 2025, respectively. This $36.6 million increase was primarily driven by higher energy consumption following the deployment of the Bitcoin miners at the Vega site in August and September 2025, which added approximately 14.86 EH/s to our mining fleet, and the deployment of Bitcoin miners at the Drumheller site in March and April 2026, which added approximately 3.05 EH/s to our mining fleet.
Depreciation and amortization expense was $54.9 million and $16.4 million for the six months ended June 30, 2026 and 2025, respectively. The $38.5 million increase was primarily attributable to higher depreciation expense resulting from the fleet upgrade and the deployment of the Bitcoin miners at the Vega site in August and September 2025, and at the Drumheller site in March and April 2026, which increased our depreciable asset base.
G&A expenses were $14.6 million and $18.0 million for the six months ended June 30, 2026 and 2025, respectively, representing a decrease of $3.4 million. The decrease was primarily driven by (i) a $2.2 million decrease in transaction costs as the Mergers were completed in 2025, and (ii) a $1.5 million decrease in general, marketing, and other administrative expenses due to streamlined back-office operations.
Loss on digital assets was $188.4 million and $109.4 million for the six months ended June 30, 2026 and 2025, respectively. In connection with the Transactions on March 31, 2025, Hut 8's Bitcoin remained with Hut 8. As a result, immediately following the effectuation of the Transactions, we held no Bitcoin on our balance sheet. Starting April 1, 2025, we began to build our own strategic Bitcoin reserve. In the six months ended June 30, 2026, Bitcoin price declined from approximately $87,498 to approximately $59,847. In the six months ended June 30, 2025, Bitcoin price increased from approximately $93,354 to approximately $107,173.
Other income
Other income was $55.7 million and $20.9 million for the six months ended June 30, 2026 and 2025, respectively. The $34.8 million increase was primarily driven by a $34.7 million increase in gain on derivatives related to the Bitcoin redemption and put options with Bitmain.
Income tax provision was $0.9$2.4 million orfor the threesix months ended MarchJune 31,30, 2026, compared to an income tax benefit of $13.5$12.5 million for the threesix months ended MarchJune 31,30, 2025. This $14.4$14.9 million decrease in income tax benefit was primarily due to the loss on digital assets for the three months ended March 31, 2026, which was driven by Hut 8 retaining a portionchange in valuation allowance, reflecting management's assessment of its Bitcoin on its standalone balance sheet and a decrease in the marketextent priceto ofwhich Bitcoin during the period. This loss reduced pre-tax income and, in turn, increased the incomedeferred tax benefitassets recognizedare formore thelikely period.than not to be realized.
Subsequent to the effectuation of the Transactions, our primary sources of liquidity included capital raised from investors, including equity sales and our strategic Bitcoin reserve, which we started to accumulate following the effectiveness of the Transactions on April 1, 2025. Our primary cash needs are for Bitcoin purchases to pursue our Bitcoin accumulation strategy, working capital to support our operations and growth, and equipment financing, including the purchase of additional Bitcoin miners.miners and infrastructure.
On September 3, 2025, we entered into a Controlled Equity Offering Sales Agreement to establish the 2025 ATM (the "2025 ATM"), allowing us to offer and sell up to $2.1 billion of our Class A common stock from time to time. From inception to MarchJune 31,30, 2026, we issued and sold 149,553,69112,121,321 shares of Class A common stock under our 2025 ATM for gross proceeds of $351.5$385.2 million.
We believe that our Bitcoin production, Bitcoin on our balance sheet, and cash flows generated from capital raised from investors and the Bitcoin on our balance sheet will meet our anticipated cash requirements in the short-term and long-term.
The following table summarizes our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:
Net cash used in operating activities was $42.5$63.8 million and $44.7$44.0 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Net cash used in operating activities for threesix months ended MarchJune 31,30, 2026 resulted primarily from a net loss of $81.8$138.9 million, partially offset by non-cash adjustments of $55.4$81.6 million and unfavorable changes in working capital of $16.1$6.5 million. Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 resulted primarily from net loss of $100.6$97.2 million, partially offset by deduction of non-cash adjustments of $70.3$48.1 million and unfavorablefavorable changes in working capital of $14.4$5.1 million.
Net cash used in investing activities totaled $61.8$65.8 million for the threesix months ended MarchJune 31,30, 2026, primarily consisting of $61.3$65.3 million of Bitcoin purchases and $0.5$0.4 million in deposits paid totowards the purchase of Bitcoin miners and mining equipment. Net cash provided by investing activities totaled $6.0 million for the threesix months ended MarchJune 31,30, 2025, consisting of $3.4 million in proceeds from Bitcoin sales, and $2.6 million in proceeds from sales of property and equipment.
Net cash provided by financing activities was $110.5$144.1 million for the threesix months ended MarchJune 31,30, 2026, which was primarily a result of $110.5$144.1 million from the issuance and sale of our Class A common stock through the 2025 ATM, net of fees. Net cash provided by financing activities was $38.6$244.0 million for the threesix months ended MarchJune 31,30, 2025, primarily consisting of $205.3 million from the issuance and sale of our Class A common stock through the 2025 ATM, net of fees and $38.6 million of net Hut 8 investment.
ABTC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (2 insiders, 3 trade dates, 756,981 shares, about $2.3M) and open-market sales in 0 filings. Net open-market shares: 756,981 (purchases minus sales); net value about $2.3M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-06 | Mateen Justin |
Open-market purchase | 162,438 | $6.19 | $1.0M |
| 2026-08-05 | Mateen Justin |
Open-market purchase | 144,543 | $6.40 | $925.1K |
| 2026-06-24 | Busch Richard |
Other | 254,778 | — | — |
| 2026-06-22 | Mateen Justin |
Option exercise | 254,778 | — | — |
| 2026-06-22 | Busch Richard |
Option exercise | 254,778 | — | — |
| 2026-06-22 | Broukhim Michael |
Option exercise | 270,701 | — | — |
| 2026-06-15 | Busch Richard |
Open-market purchase | 450,000 | $0.87 | $391.5K |
Well-known investors holding ABTC (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 3,119,343 | $2.1M | 0.0% | Added 77% |
| Renaissance Technologies | 2026-06-30 | 3,061,500 | $2.1M | 0.0% | Added 78% |
| Two Sigma Investments | 2026-06-30 | 2,189,173 | $1.5M | 0.0% | Added 264% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 73,205 | $49.9K | 0.0% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 52,713 | $35.9K | 0.0% | Added 159% |