SCHEDULE 13D/A: Atlas Capital Group Increases Stake in Greenidge Generation Holdings, Secures New Equity Payment Agreement

Atlas Capital and its affiliates have updated their beneficial ownership in Greenidge Generation Holdings Inc. to 34.5% and entered into an agreement for equity-based payments in exchange for continued letter of credit support.

Summary

• Atlas Capital Resources (A9) LP, Atlas Capital Resources (A9-Parallel) LP, Atlas Capital Resources (P) LP, GGH Bridge Investment LP, Atlas Capital GP LP, Atlas Capital Resources GP LLC, Andrew M. Bursky, and Timothy J. Fazio (collectively, the "Reporting Persons" or "Atlas") have filed an amendment to their Schedule 13D.
• The Reporting Persons collectively beneficially own 3,551,820 shares of Greenidge Generation Holdings Inc.'s Class A Common Stock (assuming conversion of all Class B shares), representing approximately 34.5% of the outstanding Class A Common Stock as of December 31, 2024.
• This ownership percentage is based on 10,292,233 shares of Class A Common Stock outstanding as of December 31, 2024, and assumes the conversion of 2,680,030 Class B Common Stock shares beneficially owned by the Reporting Persons.
• The reported share totals reflect a 10-to-1 reverse stock split of Class A and Class B Common Stock, effective May 16, 2023.
• On January 24, 2025, Greenidge Generation Holdings Inc. and Atlas entered into an Equity Interest Payment Agreement.
• Under this agreement, Atlas will maintain existing letters of credit for a specified period.
• In exchange, Greenidge will make an L/C Extension Payment of $1,369,990 and pay quarterly interest on the outstanding letters of credit.
• All payments from Greenidge to Atlas will be made in shares of Greenidge's Class A Common Stock, based on price formulas set forth in the agreement.
• The L/C Extension Payment is due within seven business days of the agreement's signing, and interest payments will commence upon signing, paid quarterly in arrears.
• Greenidge has agreed to enter into a customary registration rights agreement with Atlas upon request, covering all Class A Common Stock and convertible equity securities held by Atlas or its affiliates.

Sentiment

Score: 5

Explanation: Neutral to slightly negative. While securing credit support is positive, the method of payment via stock issuance implies cash conservation and will lead to shareholder dilution.

Positives

• Greenidge Generation Holdings Inc. has secured continued support for its letters of credit from Atlas, ensuring ongoing financial backing.
• The agreement allows Greenidge to make payments in Class A Common Stock, conserving cash resources.
• Atlas has secured future payments and the right to a registration rights agreement, which will facilitate the liquidity of their equity holdings.

Negatives

• Greenidge's agreement to pay in Class A Common Stock for L/C extension and interest payments will result in dilution for existing shareholders.
• The need to pay in stock rather than cash for credit support may indicate liquidity management challenges for Greenidge.

Risks

• Potential dilution of existing shareholder value due to the issuance of new Class A Common Stock for L/C Extension Payments and quarterly interest payments.
• Continued reliance on Atlas for maintaining letters of credit, which are critical for the company's operations.

Future Outlook

Greenidge Generation Holdings Inc. is obligated to make an L/C Extension Payment within seven business days of January 24, 2025, and will commence quarterly interest payments in arrears. The company will also enter into a customary registration rights agreement with Atlas upon request for their Class A and convertible Class B Common Stock holdings.

Industry Context

This document details a specific financial arrangement between Greenidge Generation Holdings Inc. and a major shareholder group, Atlas. It does not provide broader industry trends or competitive analysis.

Corporate Governance

Related Party Transactions

• An Equity Interest Payment Agreement was entered into between Greenidge Generation Holdings Inc. and Atlas (a group of significant shareholders), where Greenidge will make payments in Class A Common Stock for Atlas's continued support of letters of credit.

Stakeholder Impact

• Shareholders: Potential dilution of ownership percentage and value due to the issuance of new Class A Common Stock for payments.
• Creditors: The continued support of letters of credit by Atlas helps maintain Greenidge's financial stability and creditworthiness.

Next Steps

• Greenidge Generation Holdings Inc. to make the L/C Extension Payment within seven business days of January 24, 2025.
• Greenidge Generation Holdings Inc. to commence quarterly interest payments in arrears.
• Greenidge Generation Holdings Inc. to enter into a customary registration rights agreement with Atlas upon request.

Key Dates

Keywords

Greenidge Generation Holdings Inc., Atlas Capital, Schedule 13D, beneficial ownership, Class A Common Stock, Class B Common Stock, Equity Interest Payment Agreement, letters of credit, stock payment, registration rights, reverse stock split, dilution