8-K: Gryphon Digital Mining Faces Nasdaq Delisting, Plans Appeal; Resolves Legal Dispute with Sphere 3D

Gryphon Digital Mining received a delisting notification from Nasdaq due to non-compliance with the minimum bid price rule but intends to appeal, while also settling its legal dispute with Sphere 3D Corp.

Summary

• Gryphon Digital Mining, Inc. received a delisting notification from Nasdaq on March 5, 2025, because its common stock price remained below $1.00 for 30 consecutive business days, violating Nasdaq Listing Rule 5550(a)(2).
• The company did not meet the requirements for a second compliance period.
• Gryphon intends to request a hearing before a Nasdaq Hearings Panel to appeal the delisting and present a compliance plan.
• The hearing request will temporarily halt the delisting process.
• The company has hired Donohoe Advisory Associates LLC to assist with the hearing preparation and compliance plan development.
• Gryphon Digital Mining also announced the settlement of its legal dispute with Sphere 3D Corp. on mutually acceptable terms, with no payments made.
• The settlement releases Gryphon from all known and unknown claims related to the dispute.
• The company is now focusing on executing its business strategy and capitalizing on opportunities in the bitcoin and AI space.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the delisting notice from Nasdaq, which overshadows the positive news of the settlement with Sphere 3D. The company faces uncertainty regarding its Nasdaq listing.

Positives

• Gryphon Digital Mining intends to appeal the Nasdaq delisting decision, which will temporarily halt the delisting process.
• The company has settled its legal dispute with Sphere 3D Corp., removing a potential distraction and cost.
• The company is focusing on its business strategy and opportunities in the bitcoin and AI space.

Negatives

• Gryphon Digital Mining received a Nasdaq delisting notification due to non-compliance with the minimum bid price rule.
• The company did not meet the requirements for a second compliance period.

Risks

• The Nasdaq Hearings Panel may not grant Gryphon an extension to regain compliance, leading to delisting.
• The hearing may be scheduled, and the Panel may issue a decision, more quickly than expected, which shorter timeline(s) may be unfavorable for the Company and the continued listing of the Company's Common Stock on The Nasdaq Capital Market.
• Failure to maintain Nasdaq listing could negatively impact investor confidence and the company's ability to raise capital.
• The company's business strategy in the bitcoin and AI space may not be successful.

Future Outlook

The company intends to present its plan of compliance and will seek approval for an extension to execute and demonstrate compliance to Nasdaq. Gryphon is also focusing on executing its business strategy and capitalizing on opportunities in the bitcoin and AI space.

Management Comments

• Steve Gutterman, Chief Executive Officer of Gryphon, commented: 'Were pleased to put this matter behind us and move forward. Our focus now is on executing our business strategy and capitalizing on exciting opportunities to drive innovation and create value for our shareholders.'

Industry Context

The delisting notification highlights the challenges faced by smaller companies in the volatile cryptocurrency and AI sectors to maintain share price compliance. The settlement of the legal dispute allows Gryphon to focus on its core business and compete more effectively in the digital asset market.

Comparison to Industry Standards

• Many cryptocurrency mining companies have faced similar challenges with maintaining Nasdaq listing requirements due to the volatility of cryptocurrency prices.
• Companies like Marathon Digital Holdings and Riot Platforms have also experienced periods of share price volatility, but have generally maintained compliance through various strategies, including reverse stock splits or demonstrating sufficient stockholder equity.
• The settlement with Sphere 3D is similar to other companies resolving legal disputes to streamline operations and reduce legal costs, a common practice in the industry.

Stakeholder Impact

• Shareholders face the risk of delisting, which could negatively impact the value of their investment.
• Employees may experience uncertainty due to the company's financial challenges and potential delisting.
• The company's ability to attract and retain customers and partners could be affected by its Nasdaq listing status.

Next Steps

• Gryphon intends to request a hearing before a Nasdaq Hearings Panel.
• The company will present its plan of compliance to the Panel.
• Gryphon will seek approval for an extension to execute and demonstrate compliance.
• The company will continue to execute its business strategy and capitalize on opportunities in the bitcoin and AI space.

Key Dates