# American Bitcoin Corp.: Form 10-Q for the period ended Jun 30, 2025

- Company: [American Bitcoin Corp.](/companies/abtc.md) (CIK 1755953)
- Form: 10-Q
- Filed: 2025-08-14
- Accepted by EDGAR: Aug 14, 2025, 16:06 ET
- Period: 2025-06-30
- Accession: 0001213900-25-076632
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1755953/000121390025076632/ea0252376-10q_gryphon.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1755953/000121390025076632/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $1.4m | us-gaap:Revenues |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $2.9m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $1.6m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $3.7m | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$2.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$7.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $6.0k | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $9.0k | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$5.3m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$11.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.07 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.16 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.07 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.16 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 75,986,148 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 72,517,950 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$4.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $558.0k | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2025-06-30 | $678.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $3.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $6.2m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $11.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $17.2m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | −$11.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 46,360 characters.

*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’s financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with the Company’s consolidated financial statements and the notes presented herein. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from those expressed, implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the Securities and Exchange Commission.*

### Business Overview

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 5,880 bitcoin ASIC mining computers, referred to as “miners,” from Bitmain Technologies Limited (“Bitmain”) that Gryphon has installed at a third-party hosted mining data center located in 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. See “Recent Developments – Blockfusion Agreement” below.

For the six months ended June 30, 2025 and 2024, Gryphon mined approximately 31 and 226 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 six months ended June 30,

|  | 2025 | 2024 |
| --- | ---: | ---: |
| Mining Revenues | $2,935,000 | $13,005,000 |
| Bitcoin mined | 31.13 | 225.64 |
| Value of one mined bitcoin | $94,282 | $57,637 |
| Cost of Revenues (excluding depreciation) | $3,662,000 | $8,640,000 |
| Cost to mine one bitcoin | $117,636 | $38,291 |
| Total Bitcoin mined | 31 | 84 |
| Breakeven of Total Bitcoin mined | $117,636 | $38,291 |

The breakeven analysis is computed by taking the cost of revenues for the given period and dividing that sum by the number of Bitcoin mined during the same period. For instance, for the six months ended June 30, 2025 the $3,662,000 cost of revenues is divided by the 31 Bitcoin mined, resulting in an average of $117,636 per coin. 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 June 30, 2025, 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 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 mined, one arrives at the breakeven point. 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. During the six months ended June 30, 2025, the cost of electricity has fluctuated due to increased demand year over year from $0.0736 per kilowatt hour during the six months ended June 30, 2024 to $0.0926 per kilowatt hour during the six months ended June 30, 2025, reaching a high of $0.1223 per kilowatt hour during January 2025. In addition, the global hashrate of the Bitcoin network has shown a consistent upward trend, with sequential increases of 4.4%, 16.9%, 9.2% and 9.1% over the last four quarters ending June 30, 2025. 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 June 30, 2025 compared to June 30, 2024.

### Recent Developments

### ABTC Merger Agreement

See “Explanatory Note” and “Note 1 – Organization and Summary of Significant Accounting Policies “ABTC Merger” to the unaudited condensed consolidated financial statements for the six months ended June 30, 2025 included in this Report.

### Blockfusion Agreement

On December 1, 2024, the Company entered into an agreement with Blockfusion USA, Inc. (“Blockfusion”) to provide hosting services for 3,780 of the Company’s bitcoin miners not to exceed 12MW of allocated power (“Blockfusion MSA”) for a period of twelve months (November 30, 2025), automatically renewing for one month extensions until terminated by either party, (“Term”). The Company was required to pay to Blockfusion a monthly facility fee of $13,000 per MW, for an aggregate of $156,000 (“Facility Fee”) for standard levels of maintenance of the Company’s Mining Equipment, including fault diagnosis and software upgrades, and racking and unracking of faulty machines. The Company’s monthly power usage would charge to the Company without a Blockfusion markup charge. At the signing of the Blockfusion MSA, the Company was required to pay (i) an initial monthly Facility Fee of $156,000 to be applied to the December 2024 Facility fee, (ii) a deposit in the aggregate of $600,000, as follows: $200,000 on December 6, 2024, $200,000 on January 1, 2025 and $200,000 on February 1, 2025 (“Cash Deposit”) and (iii) the Company was required, prior to January 27. 2025, and thereafter at all times during the Term, maintain an irrevocable letter of credit, or prior to January 31, 2025 maintain a cash deposit and thereafter at all times during the Term, in the amount of $1,200,000 (“LOC Deposit”). As of the release date of these consolidated Financial Statements, the Cash Deposit has been paid and is not outstanding while the LOC Deposit remains outstanding.

On April 15, 2025, due to high industry hash rates and high energy costs, Gryphon Digital Mining, Inc. (the “Company”) and Blockfusion USA, Inc. (“Blockfusion”) agreed to suspend mining operations and curtail service, respectively.

### Captus Energy

On January 8, 2025, the Company and Alberta Ltd., entered into a Share and Unit Purchase Agreement (the “Captus Agreement”) with BTG Energy Corp., a Canadian corporation (“BTG Energy”), BTG Power Corp., a Canadian corporation (“BTG Power”) and West Lake Energy Corp., a Canadian corporation (“West Lake,” and together with BTG Energy and BTG Power, the “Vendors”). Pursuant to the Captus Agreement, the Company was to acquire from the Vendors all of the issued and outstanding shares or units, as applicable, of (i) Captus Generation Ltd. (“Captus GP”) and BowArk Energy Ltd., each a Canadian corporation, and (ii) Captus General Limited Partnership, a Canadian limited partnership (collectively “Captus Energy,” and the transaction contemplated by the Captus Agreement, the “Captus Acquisition”).

In connection with the Captus Agreement, on January 8, 2025, as a material inducement to their agreeing to become employees of the Company, the Company granted a restricted stock award to each of Harry Andersen, Paul Connolly, Mark Taylor and Steve Giacomin (collectively, the “Restricted Stock Awards”). The Restricted Stock Awards were intended to constitute “employment inducement awards” under the Nasdaq Stock Market Rules. The aggregate restricted stock shares issued was 4,083,003.

On May 29, 2025, the Company entered into an Assignment and Amending Agreement (“Assignment Agreement”) with Captus Energy and 2703444 Alberta LTD (“Assignee”). Captus Energy consented to the Company’s assignment of its rights and interests in the Captus agreement to the Assignee, which agreed to the assumption of the rights and interest in the Captus agreement for $1.00. As of the Assignment date, the Company wrote off the Captus Acquisition cost of approximately $1,292,000 classified as the merger and acquisition expenses in accompanying unaudited condensed consolidated statement of operations. In addition, the Restricted Stock Awards were cancelled and returned to the Company.

### Results of Operations

#### Six months ended June 30, 2025 compared to the six months ended June 30, 2024

The following table shows the Company’s results of operations for the six months ended June 30,

| Revenues | 2025 | 2024 | Change Dollar | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Mining revenues | $2,935,000 | $13,005,000 | $(10,070,000) | (77.4)% |
| Operating cost |  |  |  |  |
| Cost of revenues (excluding depreciation) | 3,662,000 | 8,640,000 | (4,978,000) | (57.6) |
| General and administrative expenses | 4,647,000 | 6,289,000 | (1,641,000) | (26.1) |
| Stock-based compensation expense | 811,000 | 348,000 | 463,000 | 133.0 |
| Depreciation expense | 1,586,000 | 6,539,000 | (4,953,000) | (75.7) |
| Unrealized gain on digital assets | (73,000) | (1,385,000) | 1,311,000 | 94.7 |
| Total operating expenses | 10,633,000 | 20,431,000 | (9,798,000) | (48.0) |
| Loss from operations | (7,698,000) | (7,426,000) | 272,000 | 3.7 |
| Other expenses | (3,839,000) | (8,327,000) | (4,488,000) | (53.9) |
| Loss before provision for income taxes | $(11,537,000) | $(15,753,000) | $(4,216,000) | (26.8)% |

#### Mining revenues

Mining revenues decreased to $2,935,000 for the six months ended June 30, 2025 from $13,005,000 for the six months ended June 30, 2024. The decrease in mining revenues of $10,070,000 was due to a combination of factors. The average value of bitcoin mined for the six months ended June 30, 2025 was $94,000 compared to $58,000 for the six months ended June 30, 2024, an increase of $36,000, or 63.0%. For the six months ended June 30, 2025, the Company had approximately 10,700 miners in operation compared to approximately 8,800 for the six months ended June 30, 2024. However, these increases in revenue recognized per bitcoin earned and operational miners were offset by the increase in global hashrate as well as the 50% reduction in block rewards due to the halving event in April 2024.

During the six months ended June 30, 2025 and 2024, the average daily global hashrate was 875.7 exahash and 602.1 exahash, respectively, an increase of 45%.

#### Cost of revenues

Cost of revenues decreased to $3,662,000 for the six months ended June 30 2025, from $8,640,000 for the six months ended June 30, 2024. The decrease of $4,978,000 was primarily due to the decrease in the number of Bitcoin mined offset by (i) an increase in Bitcoin network hashrate and (ii) higher energy costs.

#### General and administrative expenses

|  | 2025 | 2024 | Change Dollar | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Professional fees | $1,562,000 | $1,939,000 | $(377,000) | (19.4)% |
| Investor and public relations expenses | 1,046,000 | 3,354,000 | (2,308,000) | (68.8) |
| Salaries and wages | 1,264,000 | 454,000 | 810,000 | 178.4 |
| Insurance expense | 274,000 | 327,000 | (53,000) | (16.2) |
| Corporate stock expense | 137,000 | 110,000 | 27,000 | 24.5 |
| Other expenses | 364,000 | 105,000 | 259,000 | 246.6 |
| Total general and administrative expenses | $4,647,000 | $6,289,000 | $(1,642,000) | (26.1)% |

Professional fees decreased to $1,562,000 for the six months ended June 30, 2025, from $1,939,000 for the six months ended June 30, 2024. The decrease of $377,000 relates to (i) a $205,000 decrease in legal related fees, (ii) a $98,000 decrease in accounting related fees, and (iii) a $74,000 decrease in other professional fees.

Investor and public relations expenses decreased to $1,046,000 for the six months ended June 30, 2025, from $3,354,000 for the six months ended June 30, 2024. Given the pending merger with ABTC, management has suspended the use of third-party consultants for investor and public relations services.

Salaries and wages increased to $1,264,000 for the six months ended June 30, 2025, from $454,000 for the six months ended June 30, 2024. The increase of $810,000 is due (i) $419,000 for 2025 bonus accruals for our executive officers, (ii) $216,000 increase in compensation related to our CEO and VP of Energy, both hired during Q4 of 2024, (iii) $70,000 increase in employee benefits, and (iv) $105,000 increase in compensation for our directors.

Other expenses increased to $364,000 for the six months ended June 30, 2025, from $105,000 for the six months ended June 30, 2024. The increase of $259,000 was due to an increase of $290,000 for repair work on our miner fleet, offset by a general decrease in other expenses of approximately $30,000.

#### Stock-based compensation expense

Stock-based compensation expense increased to $811,000 for the six months ended June 30, 2025, from $348,000 for the six months ended June 30, 2024. The increase is due to the issuance of restricted stock units to our CEO, VP of Energy and members of the Board of Directors during the fourth quarter of 2024.

#### Depreciation expense

Depreciation decreased to $1,586,000 for the six months ended June 30, 2025, from $6,539,000 for the six months ended June 30, 2024. The decrease is due to the average remaining useful life of the mining fleet as of June 30, 2025 was 23 months, while the average remaining useful life of the mining fleet as of June 30, 2024 was 52 months.

#### Unrealized gain on digital assets

For the six months ended June 30, 2025, the Company incurred an unrealized gain on digital assets of $74,000 as compared to an unrealized gain of $1,385,000 for the six months ended June 30, 2024. The fair market value of a Bitcoin as of December 31, 2024 was approximately $93,000 as compared to approximately $107,000 as of June 30, 2025. The increase of approximately $14,000 and the number of Bitcoin held by us (approximately 9 as of June 30, 2025) resulted in the unrealized gain for the six months ended June 30, 2025. The fair market value of a Bitcoin as of December 31, 2023 was approximately $43,000 as compared to approximately $62,000 as of June 30, 2024. The increase of approximately $19,000 and the number of Bitcoin held by us (approximately 16 as of June 30, 2024) resulted in an unrealized gain for the six months ended June 30, 2024.

Other income (expense)

|  | 2025 | 2024 | Changes Dollar | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Unrealized loss on marketable securities | $(43,000) | $(272,000) | $(229,000) | (84.2)% |
| Gain on extinguishment of account payable | 449,000 | - | (449,000) | (100.0) |
| Change in fair value of BTC Note | - | (6,895,000) | (6,895,000) | (100.0) |
| Merger and acquisition costs | (3,164,000) | (394,000) | 2,770,000 | 703.0 |
| Loss on disposal of asset | (83,000) | (146,000) | (63,000) | (43.2) |
| ABTC merger costs | (989,000) | - | 989,000 | 100.0 |
| Interest expense | (9,000) | (620,000) | (611,000) | (98.5) |
| Total other expense | $(3,839,000) | $(8,327,000) | $(4,488,000) | (53.9)% |

#### Unrealized loss on marketable securities

For the six months ended June 30, 2025, unrealized loss on marketable securities was $43,000, as compared to $272,000 for the six months ended June 30, 2024. The loss for the six months ended June 30, 2025 related to a decrease in the fair market value of the underlying securities held.

#### Gain on extinguishment of accounts payable

On March 7, 2025, the Company and Sphere 3D entered into a settlement and release agreement on mutually acceptable terms. The Settlement Agreement fully resolved all pending litigation between the Company and Sphere 3D, and each party fully released the other party from any known or unknown and unsuspected claims. As such the Company was relieved of a $449,000 payable to Sphere 3D, which was expensed as of the settlement date.

#### Change in fair value of BTC Note

During the year ended December 31, 2024, the Company had a note payable denominated in Bitcoin, which was accounted for under the fair value method of accounting. For the six months ended June 30, 2024, the Company recognized a $6,895,000 increase in the fair value of notes payable. The note payable was settled in October 2024; therefore, the Company did not incur a fair value change for the six months ended June 30, 2025.

#### Merger and acquisition costs

For the six months ended June 30, 2025 merger and acquisition cost increased to $3,164,000 compared to $394,000 for June 30, 2024. During the six months ended June 30, 2025, the Company terminated the Giga Purchase Agreement and the Erikson Purchase Agreement. For the Giga Purchase Agreement, the Company had approximately $350,000 of cash deposits. For the Erikson Purchase Agreement, the Company had $447,000 of cash deposits and $161,000 of professional fees. The cash deposits and related professional fees were expensed as of each of the acquisition termination dates.

As of the Captus Assignment Agreement, the Company had approximately $1,953,000 of cash deposits and related professional fees, which were expensed as of the assignment date.

Also, the Company had approximately $223,000 of fees related to three other potential acquisitions. The $253,000 was expensed upon the termination dates of the contracts.

#### Loss on disposal of asset

Loss on disposal of asset was $83,000 for the six months ended June 30, 2025, as compared to $146,000 for the six months ended June 30, 2024. The loss related to the April 2025 disposal of 66 miners with a cost basis of approximately $132,000 and accumulated depreciation of approximately $49,000.

#### ABTC merger costs

On May 9, 2025, the Company entered into an Agreement and Plan of Merger with ABTC. For the six months ended June 30, 2025, the Company incurred approximately $989,000 of costs related to the ABTC merger, consisting of $543,000 for legal fees, $103,000 for accounting services, $200,000 for fairness opinion, $128,000 for the modification of the Anchorage warrant, and $15,000 of other miscellaneous expenses.

#### Interest expense

For the six months ended June 30, 2025, interest expense was $9,000 as compared to $620,000 for June 30, 2024. For the six months ended June 30, 2024 interest expense was related to the note payable denominated in Bitcoin. As to the Bitcoin denominated note payable was settled in October 2024 and accounted for as a troubled debt restructuring, the new note payable principal balance was increased for aggregate interest expense accrued under the prior note, and as such the monthly interest payment reduces the note payable balance; therefore, the Company did not recognize interest expense for the six months ended June 30, 2025.

#### Three months ended June 30, 2025 compared to the three months ended June 30, 2024

The following table shows the Company’s results of operations for the three months ended June 30,

| Revenues | 2025 | 2024 | Change Dollar | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Mining revenues | $1,377,000 | $5,515,000 | $(4,138,000) | (75.0)% |
| Operating cost |  |  |  |  |
| Cost of revenues (excluding depreciation) | 1,608,000 | 3,803,000 | (2,195,000) | (57.7) |
| General and administrative expenses | 1,647,000 | 3,828,000 | (2,181,000) | (57.0) |
| Stock-based compensation expense | 39,000 | 140,000 | (101,000) | (72.1) |
| Depreciation expense | 515,000 | 3,292,000 | (2,777,000) | (84.4) |
| Unrealized (gain) loss on digital assets | (200,000) | 318,000 | (518,000) | (162.9) |
| Total operating expenses | 3,609,000 | 11,381,000 | (7,772,000) | (68.3) |
| Loss from operations | (2,232,000) | (5,866,000) | (3,634,000) | (62.0) |
| Other (expenses) income | (3,025,000) | 1,857,000 | (4,882,000) | (262.9) |
| Loss before provision for income taxes | $(5,257,000) | $(4,009,000) | $1,248,000 | 31.1% |

#### Mining revenues

Mining revenues decreased to $1,377,000 for the three months ended June 30, 2025 from $5,515,000 for the three months ended June 30, 2024. The decrease in mining revenues of $4,138,000 was due to a combination of factors. The average value of bitcoin mined for the three months ended June 30, 2025 was $98,000 compared to $66,000 for the three months ended June 30, 2024, an increase of $32,000, or 49.0%. For the three months ended June 30, 2025, the Company had approximately 10,600 miners in operation compared to approximately 8,800 as of June 30, 2024. However, these increases in revenue recognized per bitcoin earned and operational miners were offset by the increase in global hashrate as well as the 50% reduction in block rewards due to the halving event in April 2024.

During the three months ended June 30, 2025 and 2024, the average daily global hashrate was 875.7 exahash and 602.1 exahash, respectively, an increase of 45%.

#### Cost of revenues

Cost of revenues decreased to $1,608,000 for the three months ended June 30, 2025, from $3,803,000 for the three months ended June 30, 2024. The decrease of $2,195,000 was primarily due to a decrease in the number of Bitcoin mined offset by (i) an increase in Bitcoin network hashrate and (ii) higher energy costs.

#### General and administrative expenses

|  | 2025 | 2024 | Change Dollar | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Professional fees | $419,000 | $891,000 | $(472,000) | (53.0)% |
| Investor and public relations expenses | 313,000 | 2,467,000 | (2,154,000) | (87.3) |
| Salaries and wages | 618,000 | 221,000 | 397,000 | 179.6 |
| Insurance expense | 124,000 | 160,000 | (36,000) | (22.5) |
| Corporate stock expense | 88,000 | 110,000 | (22,000) | (20.0) |
| Other expenses | 85,000 | (21,000) | 106,000 | (504.8) |
| Total general and administrative expenses | $1,647,000 | $3,828,000 | $(2,181,000) | (57.0)% |

Professional fees decreased to $419,000 for the three months ended June 30 2025, from $891,000 for the three months ended June 30, 2024. The decrease of $472,000 relates to (i) a $552,000 decrease in legal fees, (ii) a $34,000 decrease in accounting fees, and (iii) a $114,000 increase in other fees.

Investor and public relations expenses decreased to $313,000 for the three months ended June 30, 2025, from $2,467,000 for the three months ended June 30, 2024. Given the pending merger with ABTC, management has suspended the use of third-party consultants for investor and public relations services.

Salaries and wages increased to $618,000 for the three months ended June 30, 2025, from $221,000 for the three months ended June 30, 2024. The increase of $397,000 was due (i) $209,000 for bonus accruals for our executive officers, (ii) a $108,000 increase in compensation related to our CEO and VP of Energy, both hired during Q4 of 2024, (iii) a $23,000 increase in employee benefits, and (iv) a $57,000 increase in compensation for our directors.

#### Stock-based compensation expense

Stock-based compensation expense decreased to $39,000 for the three months ended June 30, 2025, from $140,000 for the three months ended June 30, 2024. For the three months ended June 30, 2025 our stock based compensation expense was $287,000, which was offset by a $248,000 reversal for the 2025 first quarter expense for the Captus Energy restricted stock awards, which were canceled during the second quarter of 2025, due to the Captus Energy Assignment Agreement.

#### Depreciation expense

Depreciation decreased to $515,000 for the three months ended June 30, 2025, from $3,292,000 for the three months ended June 30, 2024. The decrease is due to the fact that average remaining useful life of the mining fleet as of June 30, 2025 was 23 months, while average remaining useful life of the mining fleet as of June 30, 2024 was 52 months.

#### Unrealized loss (gain) on digital assets

For the three months ended June 30, 2025 the Company incurred an unrealized gain on digital assets of $200,000 as compared to an unrealized loss of $318,000 for the three months ended June 30, 2024. The fair market value of Bitcoin as of March 31, 2025 was approximately $83,000 as compared to approximately $107,000 as of June 30, 2025. The increase of approximately $24,000 and the number of Bitcoin held (approximately 9 as of June 30, 2025) resulted in the unrealized gain for the three months ended June 30, 2025. The fair market value of a Bitcoin as of April 30, 2023 was approximately $71,000 as compared to approximately $62,000 as of June 30, 2024. The decrease of approximately $9,000 and the number of Bitcoin held by us (approximately 16 as of June 30, 2024) resulted in an unrealized loss for the three months ended June 30, 2024.

|  | 2025 | 2024 | Changes Dollar | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Unrealized gain (loss) on marketable securities | $23,000 | $(56,000) | $79,000 | 141.1% |
| Change in fair value of BTC Note | - | 2,743,000 | (2,743,000) | (100.0) |
| Merger and acquisition costs | (1,970,000) | (394,000) | (1,576,000) | (400.0) |
| Loss on disposal of asset | (83,000) | (146,000) | 63,000 | 43.2 |
| ABC merger costs | (989,000) | - | (989,000) | (100.0) |
| Interest expense | (6,000) | (290,000) | 284,000 | 97.9 |
| Total other expense | $(3,025,000) | $1,857,000 | $(4,882,000) | (262.9)% |

32

#### Unrealized gain (loss) on marketable securities

For the three months ended June 30, 2025 unrealized gain on marketable securities was $23,000, as compared to an unrealized loss of $56,000 for the three months ended June 30, 2024. The gain for the three months ended June 30, 2025 related to an increase in the fair market value of the underlying securities held.

#### Change in fair value of BTC Note

During the year ended December 31, 2024, the Company had a note payable denominated in Bitcoin, which was accounted for under the fair value method of accounting. For the three months ended June 30, 2024, the Company recognized a $2,743,000 increase in the fair value of notes payable. The note payable was settled in October 2024; therefore, the Company did not incur a fair value change for the three months ended June 30, 2025.

#### Merger and acquisition costs

As of the date of the Captus Assignment Agreement, the Company had approximately $1,953,000 of cash deposits and related professional fees, which were expensed as of the assignment date.

#### Loss on disposal of asset

Loss on disposal of assets was $83,000 for the three months ended June 30, 2025, as compared to $146,000 for the three months ended June 30, 2024. The loss related to the April 2025 disposal of 66 miners with a cost basis of approximately $132,000 and accumulated depreciation of approximately $49,000.

#### ABTC Merger costs

On May 9, 2025, the Company entered into an Agreement and Plan of Merger with ABTC. For the six months ended June 30, 2025, the Company incurred approximately $989,000 of costs related to the ABTC merger, consisting of $543,000 for legal fees, $103,000 for accounting services, $200,000 for fairness opinion, $128,000 for the modification of the Anchorage warrant, and $15,000 of other miscellaneous expenses.

#### Interest expense

Interest expense of $290,000 for the three months ended June 30, 2024, was related to the note payable denominated in Bitcoin. As to the Bitcoin denominated note payable was settled in October 2024 and accounted for as a troubled debt restructuring, the new note payable principal balance was increased for aggregate interest expense accrued under the prior note, and as such the monthly interest payment reduces the note payable balance; therefore, the Company did not recognize interest expense for the three months ended June 30, 2025.

### Liquidity and Capital Resources

As of June 30, 2025 and December 31, 2024, the Company had cash and cash equivalents of $678,000 and $735,000, respectively, and an accumulated deficit of approximately $79,272,000 and $67,735,000, respectively. The Company financed its operations primarily through proceeds from the sales of its equity securities through private placements, its at-the-market program as described below, borrowings pursuant to the Sphere 3D Note and the BTC Note and cash flow from its digital currency mining operations.

The Company believes that its current levels of cash will not be sufficient to meet its anticipated cash needs for its operations for at least the next 12 months. The Company will require additional capital resources to fund its operations and pay its obligations as they come due over the next twelve months. The Company may also need to implement a strategy to expand its business or other investments or acquisitions. The Company may sell additional equity or debt securities or enter into a credit facility to satisfy its capital requirements. The sale of additional equity securities could result in dilution to its shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require the Company to agree to operating and financial covenants that would restrict its operations. Financing may not be available in amounts or on terms acceptable to the Company if at all. Any failure by the Company to raise additional funds on terms favorable to it, or at all, could limit its ability to expand its business operations and could harm its overall business prospects.

On June 10, 2024, the Company filed a prospectus supplement for the offering, issuance and sale of up to a maximum aggregate offering price of $70.0 million of common stock that may be issued and sold under an at-the-market issuance sales agreement with Ladenburg Thalmann & Co. Inc., Kingswood Investments, a division of Kingswood Capital Partners, LLC, PI Financial (US ) Corp. and ATB Capital Markets USA Inc., each respectively acting as sales agents (the “ATM”). The Company has used and intend to continue to use the net proceeds from the ATM for general corporate purposes, including without limitation, repurchases and redemptions of our common stock and general working capital. The ATM will terminate upon the earlier of (i) the issuance and sale of all of the shares of the common stock subject to the conditions set forth in the ATM or (ii) termination of the ATM as otherwise permitted thereunder. The ATM may be terminated at any time by either the Company or any sales agent with respect to itself upon five days’ prior notice, or by the sales agents at any time in certain circumstances, including the occurrence of a material adverse effect on us. As of June 30, 2025, approximately $62.036 million in capacity remains under the ATM.

### Summary of Cash Flow

The following table provides detailed information about the Company’s net cash flow for the six months ended June 30,

|  | 2025 | 2024 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(4,098,000) | $(782,000) |
| Net cash used in investing activities | $(1,815,000) | $(954,000) |
| Net cash provided by financing activities | $5,856,000 | $2,040,000 |

#### Net cash used in operating activities

Net cash used in operating activities was approximately $4,098,000 for the six months ended June 30, 2025, and consisted primarily of cash proceeds from the sale of digital assets of approximately $3,094,000, offset by cash expenditures for operating activities of approximately $7,192,000.

Net cash used in operating activities was approximately $782,000 for the six months ended June 30, 2024, and consisted primarily of cash proceeds from the sale of digital currency of approximately $12,969,000, offset by cash expenditures for operating activities of approximately $13,751,000.

#### Net cash used in investing activities

Net cash used in investing activities was approximately $1,815,000 for the six months ended June 30, 2025, and consisted of (i) the purchase of mining equipment for approximately $558,000 and (ii) cash disbursements of approximately $1,257,000 for deposits under asset acquisition agreements.

Net cash used in investing activities was approximately $954,000 for the six months ended June 30, 2024, and consisted of (i) the purchase of mining equipment for approximately $1,075,000, (ii) a cash disbursement of $50,000 for a refundable deposit, and (iii) proceeds of $171,000 from the sale of miners.

#### Net cash provided by financing activities

Net cash provided by financing activities was approximately $5,856,000 for the six months ended June 30, 2025, and consisted primarily of (i) a loan of $343,000 for our insurance policy premiums, (ii) insurance premium loan payments of $161,000, (iii) $2,116,000 of cash proceeds from a registered direct offering of the Company’s common stock, (iv) $76,000 for costs related to the registered direct offering, (vi) $3,872,000 of cash received from the sale of the Company’s common stock using the ATM, (vii) $114,000 for cost related to the ATM, and (viii) $124,000 of cash payments for the interest on the Note Payable.

Net cash provided by financing activities was approximately $2,040,000 for the six months ended June 30, 2024, and consisted primarily of (i) insurance premium payments of $279,000, (ii) $2,054,000 of cash proceeds from issuance of the Company’s common stock offset by the payment of $235,000 for costs related to the issuance of common stock, and $500,000 of cash received from the acquisition of Akerna.

### Capital Expenditures and Other Obligations

#### Blockfusion Agreement

See “—Recent Developments—Blockfusion Agreement” above.

#### Mawson Agreement

See “—Recent Developments—Mawson Agreement” above.

#### Note Payable

On May 25, 2022, Anchorage entered into an Equipment Loan and Security Agreement (as amended on March 27, 2023) with Gryphon Opco I LLC, an indirect wholly owned subsidiary of the Company, pursuant to which Anchorage loaned Gryphon Opco the principal amount of 933.333333 bitcoin. Gryphon Opco’s obligations under the Anchorage Loan Agreement were secured by certain equipment and software rights of Gryphon Opco and were guaranteed by Gryphon.

On October 25, 2024, Gryphon, its direct and indirect subsidiaries, as applicable, and Anchorage entered into the Debt Repayment and Exchange Agreement; Loan, Guaranty and Security Agreement, Form of Pre-Funded Warrant and Form of $1.50 Warrant to restructure the Anchorage Loan and terminate the existing the Anchorage Loan Agreement. Pursuant to the New Anchorage Agreements, (i) approximately $9.1 million of the Anchorage Loan was converted into shares of Common Stock, at an ascribed value of $1.10 per share, resulting in the issuance of 8,287,984 shares of Common Stock to Anchorage in a private placement pursuant to Section 4(a)(2) of the Securities Act, (ii) approximately $3.9 million of the Anchorage Loan was converted into warrants to purchase 3,530,198 shares of Common Stock, which warrants are exercisable immediately, have an unlimited term and an exercise price of $0.01 per share, in a private placement pursuant to Section 4(a)(2) of the Securities Act and (iii) the remaining $5 million of the Anchorage Loan was exchanged for a new $5 million loan pursuant to the New Loan Agreement.

Pursuant to the New Loan Agreement:

- the outstanding principal and interest are denominated in dollars;
- the interest rate is 4.25% payable monthly;
- Anchorage has been given a first priority lien on all of Gryphon and its subsidiaries’ assets;
- covenants related to mining machine locations and covenant ratios in the Anchorage Loan Agreement have been removed; and
- Anchorage may convert half of the outstanding principal at a price of $1.10 per share of Common Stock and the remaining half at a price of $1.50 per share of Common Stock.

The New Loan Agreement contains customary representations, warranties and agreements by Gryphon, customary conditions to closing, indemnification obligations of the Company and the purchasers, including for liabilities arising under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Loan Agreement were made only for the purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties.

Pursuant to the New Anchorage Agreements, Gryphon also issued Anchorage warrants to purchase 2,000,000 shares of Common Stock, which warrants are exercisable immediately, will expire five years from the date of issuance and have an exercise price of $1.50 per share. The $1.50 Warrants were issued in a private placement pursuant to Section 4(a)(2) of the Securities Act.

The Restructured Loan and the Anchorage Warrants cannot be converted or exercised, respectively, if Anchorage (together with its affiliates) would beneficially own in excess of 19.99% of the number of shares of Common Stock outstanding as of the date of the New Anchorage Agreements after giving effect to such conversion or exercise without the approval of Gryphon’s stockholders. Gryphon has agreed to seek such approval at its next annual meeting of stockholders.

On May 10, 2025, Gryphon entered into a warrant amendment with Anchorage to amend the $1.50 Warrants. Pursuant to the Amendment, Gryphon reduced the exercise price of the $1.50 Warrants from $1.50 to $0.55 per share and, subject to the closing of the Mergers, will remove Section 15 of the $1.50 Warrants, which provides most favored nation rights.

All of the Anchorage Warrants have been exercised and none remain outstanding.

### Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

### Critical Accounting Estimates

The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable after taking into account our circumstances and expectations for the future based on available information. Our actual results could differ from these estimates.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above.

The critical accounting policies, and the judgements, estimates, and assumptions associated with such policies, that we believe have the greatest potential impact on the consolidated financial statements are disclosed in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Recent Accounting Pronouncements

From time to time, the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through the issuance of an Accounting Standards Update (“ASU”). The Company considers the applicability and impact of all ASUs on the Company’s financial position, results of operations, cash flows, or presentation thereof. Described below are ASUs that are not yet effective but may be applicable to the Company’s financial position, results of operations, cash flows, or presentation thereof. As of the issuance of these consolidated financial statements, there were no ASUs that management assessed and determined to be applicable to the Company’s financial position, results of operations, cash flows, or presentation thereof.

### Non-GAAP Financial Measures

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

Adjusted EBITDA is not a financial measure of performance under GAAP and, as a result, these measures may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. These non-GAAP measures are not meant to be considered in isolation and should be read only in conjunction with the Company’s Interim Reports on Form 10-Q and its Annual Reports on Form 10-K as filed with the Securities and Exchange Commission. Management uses adjusted EBITDA and the supplemental information provided herein as a means of understanding, managing, and evaluating business performance and to help inform operating decision making. The Company relies primarily on its consolidated financial statements to understand, manage, and evaluate its financial performance and use the non-GAAP financial measures only supplementally.

The following is a reconciliation of our non-GAAP adjusted EBITDA to its most directly comparable GAAP measure (i.e., net income (loss)) for the six months ended June 30:

| Reconciliation to Adjusted EBITDA: | 2025 | 2024 |
| --- | ---: | ---: |
| **Net loss** | $(11,537,000) | $(15,753,000) |
| Exclude: Depreciation | 1,586,000 | 6,539,000 |
| Exclude: Interest expense | 9,000 | 620,000 |
| **EBITDA** | (9,942,000) | (8,594,000) |
| Non-cash/non-recurring operating expenses: |  |  |
| Exclude: Stock-based compensation expense | 811,000 | 348,000 |
| Exclude: Change in fair value of notes payable | - | 6,895,000 |
| Exclude: Unrealized loss on marketable securities | 43,000 | 272,000 |
| Adjusted EBITDA | $(9,088,000) | $(1,079,000) |

### Recently Adopted Pronouncements

On December 13, 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. The new standard is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted. The Company adopted ASU 2023-08 on January 1, 2024. The adoption of the ASU 2023-08 was a $740,000 increase of our digital assets, as of January 1, 2024.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (ASC Topic 280): Improvements to Reportable Segment Disclosures.” The amendments require the disclosure of significant segment expenses as well as expanded interim disclosures, along with other changes to segment disclosure requirements. The standard will be effective for fiscal years beginning after December 15, 2023, and interim periods beginning on or after December 15, 2024. We have implemented the provisions of the ASU 2023-07. See Note 1.

## Controls and procedures

As filed, 4,661 characters.

### Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report, our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”) conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a - 15(e) and 15d - 15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosures.

Based on their evaluation, the Certifying Officers concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective.

The material weakness related to internal control over financial reporting that was identified at June 30, 2025 was that we did not have sufficient personnel staffing in our accounting and financial reporting department. As a result, we were not able to achieve adequate segregation of duties and were not able to provide for adequate review of the financial statements.

This control deficiency could result in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis. However, our management believes that the material weakness identified does not result in the restatement of any previously reported financial statements or any other related financial disclosure, and management does not believe that the material weakness had any effect on the accuracy of our financial statements included as part of this Report.

We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking action and implementing additional enhancements or improvements, as necessary and as funds allow. Management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:

- Continue the process that was started during 2024 of adding to the Company’s internal resources to enhance its capabilities in the areas of technical accounting, financial reporting, and internal controls, that may include hiring a full-time person dedicated to internal controls.
- Utilize external third-party audit and SOX 404 implementation firms to enable the Company to improve the Company’s controls related to its material weaknesses.
- Continue to evaluate existing processes and implement new processes and controls where necessary in connection with remediating the Company’s material weaknesses, such that these controls are designed, implemented, and operating effectively.

The Company recognizes that the material weaknesses in its internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Because the Company’s remediation efforts are ongoing, it cannot provide any assurance that these remediation efforts will be successful or that its internal control over financial reporting will be effective as a result of these efforts.

The Company continues to evaluate and work to improve its internal control over financial reporting related to the identified material weaknesses, and management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above. In addition, the Company will report the progress and status of the above remediation efforts to the Audit Committee on a periodic basis.

### Changes in Internal Control over Financial Reporting

During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 26,029 characters.

Except for the additional risk factors set forth below, there have been no material changes to our Risk Factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 31, 2025, as amended.

### Neither Gryphon nor ABTC can be sure if or when the Mergers will be completed.

The consummation of the Mergers is subject to the satisfaction or waiver of various conditions. Neither Gryphon nor ABTC can guarantee that the closing conditions set forth in the ABTC Merger Agreement will be satisfied. If Gryphon is unable to satisfy the closing conditions in ABTC’s favor or if other mutual closing conditions are not satisfied, ABTC will not be obligated to complete the Mergers. Under certain circumstances, Gryphon would be required to pay ABTC a termination fee of $5,000,000, in addition to the out-of-pocket fees and expenses incurred by or on behalf of ABTC in connection with the transactions contemplated by the ABTC Merger Agreement.

If the Mergers are not completed, the Gryphon Board, in discharging its fiduciary obligations to Gryphon stockholders, will evaluate other strategic alternatives or financing options that may be available, which alternatives may not be as favorable to Gryphon stockholders as the Mergers, if available at all. Any future sale, merger, financing or other transaction may be subject to further stockholder approval. Gryphon may also be unable to find, evaluate or complete other strategic alternatives, which may have a material adverse effect on Gryphon’s business, financial condition or results of operations.

Gryphon’s and ABTC’s efforts to complete the Mergers could cause substantial disruptions in and create uncertainty surrounding, their respective businesses, which may materially adversely affect their results of operation and businesses. Uncertainty as to whether the Mergers will be completed may also affect Gryphon’s and ABTC’s ability to retain and motivate existing employees. A substantial amount of Gryphon’s and ABTC’s management’s and employees’ attention is being directed toward the Closing and thus is being diverted from their respective day-to-day operations. Uncertainty as to Gryphon’s and ABTC’s future could adversely affect their relationship with collaborators, suppliers, vendors, regulators and other business partners and stakeholders. For example, vendors, collaborators and other counterparties may defer decisions concerning working with Gryphon or ABTC or seek to change existing business relationships with Gryphon or ABTC, during the pendency of the Mergers. Changes to or termination of, existing business relationships could adversely affect Gryphon’s results of operations and financial condition, as well as the market price of Gryphon Common Stock. The adverse effects of the pendency of the Mergers could be exacerbated by any delays in the Closing or by the termination of the ABTC Merger Agreement.

***The Closing is subject to approval by the Gryphon stockholders and the ABTC stockholders. Failure to obtain these approvals would prevent the Closing.***

The Closing is subject to certain approvals by the Gryphon stockholders and the ABTC stockholders. Failure to obtain the required stockholder approvals may result in a material delay in or the abandonment of, the Mergers. Any delay in completing the Mergers may materially adversely affect the timing and benefits that are expected to be achieved from the Mergers.

***Gryphon stockholders will experience significant ownership and voting power dilution in connection with the Mergers and may not realize a benefit from the Mergers commensurate with that dilution.***

Pursuant to the terms of the ABTC Merger Agreement and upon the Closing, the Gryphon stockholders as of immediately prior to the First Effective Time are expected to own 2.0% of the Combined Company Common Stock and the ABTC stockholders as of immediately prior to the First Effective Time are expected to own 98.0% of the Combined Company Common Stock, each on a fully diluted basis. ABTC stockholders who hold ABTC Class B Common Stock, including ABH, which is a wholly owned subsidiary of Hut 8, and certain other stockholders of ABTC, will receive Class B Common Stock, which will entitle the holder thereof to 10,000 votes per share. The Class A Common Stock that will be held by other stockholders of the Combined Company, including stockholders of Gryphon, will entitle the holder thereof to one vote per share. While the actual Exchange Ratio will be determined at the Closing, it is currently expected that ABTC stockholders as of immediately prior to the First Effective Time will collectively represent approximately 99.99% and holders of equity interests of Gryphon as of immediately prior to the First Effective Time will collectively represent less than 0.01% of the total combined voting power of Combined Company capital stock, respectively, at the Closing. In addition, it is currently expected that at the Closing, on the same basis, Hut 8 will own approximately 64.37% of the then-outstanding Combined Company Common Stock, on a fully diluted basis, which is expected to represent approximately 80.00% of the total combined voting power of the Combined Company capital stock.

Accordingly, the issuance of Combined Company Common Stock to ABTC stockholders in the Mergers will significantly reduce the ownership stake and relative voting power of each share of Gryphon Common Stock held by current Gryphon stockholders. Consequently, following the Mergers, the ability of current Gryphon stockholders to influence Combined Company management will be substantially reduced.

If the Combined Company is unable to realize the strategic and financial benefits currently anticipated from the Mergers, Gryphon stockholders will have experienced substantial dilution of their ownership interests in Gryphon without receiving the expected commensurate benefit or only receiving part of the commensurate benefit to the extent the Combined Company is able to realize only part of the expected strategic and financial benefits currently anticipated from the Mergers.

### The intended benefits of the Mergers may not be realized.

The Mergers pose risks for Gryphon’s and ABTC’s ongoing operations, including, among others:

- that senior management’s attention may be diverted from management of the respective businesses, current operations and development;
- that there are significant costs and expenses associated with any undisclosed or potential liabilities; and
- that unforeseen difficulties may arise in integrating Gryphon’s and ABTC’s businesses in the Combined Company.

As a result of the foregoing and other factors, risks and characteristics, the Combined Company may be unable to realize the full strategic and financial benefits currently anticipated from the Mergers and Gryphon and ABTC cannot assure you that the Mergers will be accretive to Gryphon or ABTC stockholders in the near term or at all. Furthermore, if Gryphon or ABTC stockholders fail to realize the intended benefits of the Mergers or they take longer than expected to achieve, the market price of the Combined Company’s common stock could decline to the extent that the market price reflects those anticipated benefits. Gryphon stockholders will have experienced substantial dilution of their ownership interests in Gryphon without receiving any commensurate benefit or only receiving part of the commensurate benefit to the extent the Combined Company is able to realize only part of the strategic and financial benefits currently anticipated from the Mergers.

***Failure to complete the Mergers may result in Gryphon paying a termination fee to ABTC, which could significantly harm the price of the Gryphon Common Stock and Gryphon’s future business and operations.***

If the Mergers are not completed and the ABTC Merger Agreement is terminated under certain circumstances, Gryphon may be required to pay ABTC a termination fee of $5,000,000, in addition to the out-of-pocket fees and expenses incurred by or on behalf of ABTC in connection with the transactions contemplated by the ABTC Merger Agreement. Even if such a termination fee is not payable in connection with a termination of the ABTC Merger Agreement, Gryphon will have incurred significant fees and expenses, which must be paid whether or not the Mergers are completed. Further, if the Mergers are not completed, it could significantly harm the market price of the Gryphon Common Stock.

In addition, if the ABTC Merger Agreement is terminated and Gryphon determines to seek another business combination, there can be no assurance that Gryphon will be able to find a partner and close an alternative transaction on terms that are as favorable as or more favorable to Gryphon than the terms set forth in the ABTC Merger Agreement or at all.

***The Mergers are subject to the requirements of the HSR Act, and regulatory authorities may impose conditions that could have an adverse effect on Gryphon and/or ABTC following the Mergers or that could delay, prevent or increase the costs associated with completion of the Mergers.***

Completion of the Mergers is conditioned upon the expiration or termination of any waiting period under the provisions of the HSR Act. Under the ABTC Merger Agreement, Gryphon and ABTC have agreed to use their respective reasonable best efforts to obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from governmental authorities and make all necessary registrations, declarations and filings with governmental authorities, that are necessary to consummate the Mergers. However, there can be no assurance that these approvals will be obtained and that the other conditions to completing the Mergers will be satisfied. In addition, the governmental authorities from which the regulatory approvals are required may impose conditions on the Closing or require changes to the terms of the ABTC Merger Agreement or other agreements to be entered into in connection with the ABTC Merger Agreement which may delay completion of the Mergers or impose additional material costs on or materially limit the revenues of the Combined Company following the completion of the Mergers. There can be no assurance that regulators will choose not to impose such conditions or changes in terms, and, if imposed, such conditions or changes in terms may delay or lead to the abandonment of the Mergers.

***The Mergers may be completed even though certain events occur prior to the Closing that materially and adversely affect Gryphon or ABTC.***

The ABTC Merger Agreement provides that either Gryphon or ABTC can refuse to complete the Mergers if there is a material adverse effect with the other party occurring between the date of the ABTC Merger Agreement and the Closing. However, certain types of changes do not permit either party to refuse to complete the Mergers, even if such change could be said to have a material adverse effect on Gryphon or ABTC, including, but not limited to:

- any changes in conditions generally affecting United States or global economic, business, regulatory conditions, including changes in United States or global securities, credit, financial, debt or other capital markets;
- conditions (or changes in such conditions) in the currency, Bitcoin mining, cryptocurrency, electricity, power or natural gas industry (including changes in cryptocurrency prices, commodity prices, general market prices and regulatory changes affecting the industry);
- general changes in national or international political conditions (including the imposition of or changes in international tariffs, sanctions, trade policies or disputes or any “trade war” and any cessation, outbreak or escalation of hostilities, any acts of war or terrorism or any other national or international calamity, crisis or emergency);
- acts of God, natural disasters, calamities, disease outbreaks or pandemics;
- any failure, in and of itself, by ABTC or any of its subsidiaries to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period;
- the execution and delivery of the ABTC Merger Agreement, the public announcement thereof, the pendency of the ABTC Merger Agreement, the impact thereof on the relationships of ABTC and its subsidiaries, with customers, suppliers or partners or the Closing;
- any changes after the date of the ABTC Merger Agreement not announced prior to the date of the Merger Agreement in any applicable law or U.S. generally accepted accounting principles (“**U.S. GAAP”**), including, in each case, the authoritative interpretation or enforcement thereof;
- any action required by a governmental authority pursuant to antitrust laws in connection with the Mergers; and
- any action or omission taken by ABTC pursuant to the prior written request of Gryphon, subject to certain exceptions set forth in the ABTC Merger Agreement.

***Certain officers and directors of Gryphon have interests in the Mergers that may be different from or in addition to, the interests of Gryphon stockholders generally.***

Some of Gryphon’s directors and officers have interests in the Mergers that are different from Gryphon’s stockholders generally and that may influence them to support or approve the Mergers without regard to the interests of Gryphon’s other stockholders. For example:

- based on the terms of his employment agreement, Steve Gutterman, the Company’s Chief Executive Officer, will be entitled to receive a total value of approximately $2,290,794 in connection with the Closing, which consists of (i) $737,164 as part of severance payments under his employment agreement and (ii) approximately $1,553,630 in value associated with the accelerated vesting of outstanding unvested restricted stock units;
- based on the terms of his employment agreement, Simeon Salzman, the Company’s Chief Financial Officer, will be entitled to receive a total value of approximately $412,500 in connection with the Closing, which consists of a severance payment under his employment agreement that is payable in twelve equal monthly installments;
- based on the terms of his employment agreement, Eric Gallie, the Company’s Senior Vice President, Energy, will be entitled to receive a total value of approximately $835,000 in connection with the Closing, which consists of (i) $250,000 as part of severance payments under his employment agreement, payable in twelve equal monthly installments and (ii) approximately $585,000 in value associated with the accelerated vesting of outstanding unvested restricted stock units; and
- Gryphon’s directors and officers will be eligible for continued indemnification and continued coverage under directors’ and officers’ liability insurance after the Mergers and pursuant to the terms of the ABTC Merger Agreement.

The Gryphon Board was aware of these interests and considered them, among other matters, in the decision to approve the ABTC Merger Agreement.

***Certain provisions of the ABTC Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the ABTC Merger Agreement.***

The ABTC Merger Agreement contains “no-shop” restrictions on Gryphon’s ability to solicit, initiate, endorse, knowingly encourage or facilitate third party proposals relating to alternative transactions or to provide information to or engage in discussions with, a third party in relation to an alternative transaction, subject to certain exceptions to permit the Gryphon Board to comply with its fiduciary duties. The ABTC Merger Agreement also contains “force the vote” provisions that require Gryphon to hold the Special Meeting even if the Gryphon Board withdraws, amends or modifies its recommendation regarding the Proposals. Before the Gryphon Board may change its recommendation to stockholders to vote in favor of the Proposals, Gryphon must, among other things, provide ABTC with notice and negotiation rights. Upon the termination of the ABTC Merger Agreement in certain circumstances, including in connection with a Gryphon Recommendation Change in response to a Superior Proposal, Gryphon may be required to pay up to $5,000,000 as a termination fee, in addition to the out-of-pocket fees and expenses incurred by or on behalf of ABTC in connection with the transactions contemplated by the ABTC Merger Agreement.

These provisions could discourage a potential third party acquiror from considering or proposing an acquisition transaction, even if it were prepared to pay a higher price than what would be received in the Mergers. These provisions might also result in a potential third party acquiror proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the $5,000,000 termination fee and additional ABTC fees and expenses that may become payable.

If the ABTC Merger Agreement is terminated and Gryphon determines to seek another business combination, Gryphon may not be able to negotiate a transaction with another party on terms comparable to or better than, the terms of the ABTC Merger Agreement or at all.

Furthermore, as noted above, certain Gryphon securityholders holding an aggregate of approximately 19.29% of the outstanding voting securities of Gryphon as of May 9, 2025 have entered into support agreements. These Gryphon securityholders also agreed to vote against any Gryphon Acquisition Proposal (as defined in the ABTC Merger Agreement) or any other proposal with respect to Gryphon that is in opposition to or in competition with, the Mergers. As a result, the support agreements may discourage other parties from attempting to engage in a transaction with Gryphon, even if those parties would otherwise be willing to offer greater value to Gryphon stockholders than that offered by ABTC under the Mergers.

***Gryphon will be subject to certain contractual restrictions while the Mergers are pending.***

The ABTC Merger Agreement restricts Gryphon from making certain acquisitions and divestitures, entering into certain contracts, incurring certain indebtedness and expenditures, paying dividends, repurchasing or, with respect to Gryphon, issuing equity securities outside certain limited exceptions and taking other specified actions until the earlier of the Closing or the termination of the ABTC Merger Agreement without the consent of the other party. These restrictions may prevent Gryphon from pursuing attractive business opportunities that may arise prior to the Closing and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from the pendency of the Mergers could be exacerbated by any delays in the Closing or the termination of the ABTC Merger Agreement.

***The market price of Gryphon Common Stock may decline and the value of ABTC’s securities may be adversely affected as a result of the announcement and pendency of the Mergers.***

The market price of Gryphon Common Stock may decline and the value of ABTC’s securities may be adversely affected as a result of the announcement and pendency of the Mergers for a number of reasons, including if:

- investors react negatively to the prospects of the Combined Company’s business and financial condition following the Mergers; and/or
- the attention of Gryphon or ABTC management is directed towards the Closing and other transaction-related considerations and is diverted from the day-to-day business operations of Gryphon or ABTC, as applicable and matters related to the Mergers require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to Gryphon or ABTC, as applicable.

A decline in the market price of Gryphon Common Stock or an adverse effect upon the value of ABTC’s securities could adversely affect the businesses of, or harm the financial condition, results of operations or business prospects of, Gryphon, ABTC or the Combined Company.

***If the Mergers are not completed, the Gryphon Board may decide to pursue a dissolution and liquidation of Gryphon. In such an event, the amount of cash available for distribution to its stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.***

There can be no assurance that the Mergers will be completed. If the Mergers are not completed, the Gryphon Board may decide to pursue a dissolution and liquidation of Gryphon. In such an event, the amount of cash available for distribution to Gryphon stockholders will depend heavily on the timing of such decision, as with the passage of time the amount of cash available for distribution is expected to be reduced as Gryphon continues to fund its operations and transaction-related expenses. In addition, if the Gryphon Board were to approve and recommend and Gryphon stockholders were to approve, a dissolution and liquidation of Gryphon, Gryphon would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to Gryphon stockholders. As a result of this requirement, a portion of Gryphon’s remaining cash assets may need to be reserved pending the resolution of such obligations. In addition, Gryphon may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, the Gryphon Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Gryphon Common Stock could lose all or a significant portion of their investment in the event of liquidation, dissolution or winding up of Gryphon.

***Litigation relating to the Mergers could require Gryphon to incur significant costs and suffer management distraction and could delay or enjoin the Mergers.***

Gryphon could be subject to demands or litigation related to the Mergers, whether or not the Mergers are consummated. Such actions may create uncertainty relating to the Mergers or delay or enjoin the Mergers and responding to such demands is often expensive and could divert management time and resources. In addition, such demands or litigation could lead to a dissolution or bankruptcy of Gryphon if the costs associated with such demands or litigation are significant enough.

***Gryphon and ABTC are expected to incur substantial expenses related to the Mergers.***

Gryphon and ABTC have incurred and expect to continue to incur, substantial fees and expenses in connection with the Mergers, including legal, accounting, financial advisory and other transaction fees and costs associated with the Mergers. Additionally, as the controlling stockholder of ABTC, Hut 8 has incurred and expects to continue to incur fees and expenses in connection with the Mergers, and such costs are expected to be borne by ABTC.

As of June 25, 2025, ABTC has incurred approximately $4.3 million of fees and expenses related to the Mergers, primarily consisting of legal, audit and accounting fees, and anticipates incurring approximately $0.9 million of additional fees and expenses prior to the Closing. As of June 25, 2025, Gryphon has incurred approximately $0.9 million of fees and expenses related to the Mergers, primarily consisting of legal, audit and accounting fees, and anticipates incurring approximately $1.1 million of additional fees and expenses prior to the Closing. Actual transaction costs may substantially exceed Gryphon’s and ABTC’s respective estimates and may have an adverse effect on the Combined Company’s financial condition and operating results.

In addition, the Combined Company may also incur significant integration-related fees and costs related to formulating and implementing integration plans, including facilities and systems consolidation costs and employment-related costs. Gryphon and ABTC continue to assess the magnitude of these costs and additional unanticipated costs may be incurred in the Mergers and the integration of the two companies’ businesses.

***Gryphon or ABTC may waive one or more of the Closing conditions without re-soliciting stockholder approval.***

Gryphon or ABTC may determine to waive, in whole or in part, one or more of the conditions to its obligations to consummate the Mergers. Gryphon and ABTC expect to evaluate the materiality of any waiver and its effect on Gryphon or ABTC stockholders, as applicable, in light of the facts and circumstances at the time to determine whether any amendment of the merger proxy statement/prospectus or any re-solicitation of proxies, approvals or voting cards is required in light of such waiver. Any determination to waive any condition to the Mergers or as to re-soliciting stockholder approval or amending the merger proxy statement/prospectus as a result of a waiver will be made by Gryphon or ABTC, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time.

***Following the completion of the Mergers, the Combined Company may issue additional securities.***

Following the completion of the Mergers, the Combined Company may issue additional securities (including equity securities) to finance its activities. If the Combined Company were to issue additional equity securities, the ownership interest of existing Gryphon and ABTC stockholders may be diluted and some or all of the Combined Company’s financial measures on a per share basis could be reduced. Moreover, as the Combined Company’s intention to issue additional equity securities becomes publicly known, the Combined Company’s share price may be materially adversely affected.

Filed Aug 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001213900-25-076632. Last ingested by Listed: Nov 4, 2026, 18:01 ET. No prices; not investment advice.