UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31,2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-39096
GRYPHON DIGITAL MINING, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 83-2242651 |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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| 1180 N. Town Center Drive, Suite 100 Las Vegas, NV | 89144 |
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| (Address of principal executive offices) | (Zip Code) |
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Registrant’s telephone number, including area code:(702) 945-2700
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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| Common Stock, par value $0.0001 per share | GRYP | The Nasdaq Stock Market LLC |
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Securities registered under Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
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| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
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| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes☐ No☒
The aggregate market value of the voting and non-voting common stock of Gryphon Digital Mining, Inc. held by non-affiliates was approximately $37.6 million based upon the closing price per share of $1.19 on June 28, 2024.
As of March 31, 2025, there were 69,982,876 shares of common stock, par value $0.0001 per share of the registrant issued and outstanding.
INDEX
| PART I |
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| Item 1. | Business | 1 |
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| Item 1A. | Risk Factors | 11 |
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| Item 1B. | Unresolved Staff Comments | 45 |
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| Item 1C. | Cybersecurity | 45 |
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| Item 2. | Properties | 46 |
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| Item 3. | Legal Proceedings | 47 |
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| Item 4. | Mine Safety Disclosures | 48 |
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| PART II |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuers Purchases of Equity Securities | 49 |
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| Item 6. | [Reserved] | 49 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 50 |
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| Item 7A. | Quantitative and Qualitative Disclosure about Market Risk | 61 |
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| Item 8. | Financial Statements and Supplementary Data | 61 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 61 |
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| Item 9A. | Controls and Procedures | 62 |
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| Item 9B. | Other Information | 63 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 63 |
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| PART III |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 64 |
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| Item 11. | Executive Compensation | 70 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 92 |
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| Item 13. | Certain Relationships and Related Transactions and Director Independence | 93 |
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| Item 14. | Principal Accounting Fees and Services | 94 |
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| PART IV |
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| Item 15. | Exhibits, Financial Statement Schedules | F-1 |
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| Signatures | 98 |
i
EXPLANATORY NOTE
On February 9, 2024 (the “Closing Date”), Gryphon Digital Mining, Inc., a Delaware corporation f/k/a Akerna Corp. (“Gryphon,” the “Company,” “we,” “us” or “our”), consummated the previously announced business combination pursuant to that certain Agreement and Plan of Merger by and between the Company, Akerna Merger Co., a wholly-owned subsidiary of the Company (“Merger Sub”), and Ivy Crypto, Inc. (formerly known as Gryphon Digital Mining, Inc.) (“Legacy Gryphon”), dated January 27, 2023, as amended (the “Merger Agreement”), following approval thereof at a special meeting of the Company’s stockholders held on January 29, 2024 (the “Special Meeting”).
Pursuant to the terms of the Merger Agreement, a business combination between the Company and Legacy Gryphon was effected through the merger of Merger Sub with and into Legacy Gryphon, with Legacy Gryphon as the surviving company in the Merger, and after giving effect to such merger, continuing as a wholly owned subsidiary of the Company (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). On the date of the closing (the “Closing”) of the Business Combination (the “Closing Date”), the registrant changed its name from Akerna Corp. to Gryphon Digital Mining, Inc. Additionally, on the Closing Date, immediately following the Closing, the Company sold its legacy business to MJ Acquisition Corp. pursuant to that certain securities purchase agreement dated April 28, 2023, as amended (the “SPA”) by and among the Company, Akerna Canada Ample Exchange Inc. and MJ Acquisition Corp.
Unless the context requires otherwise, references to “Akerna” are to the Company prior to the Business Combination.
The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “GRYP.”
The audited financial statements for the year ended December 31, 2023 included herein are those of Legacy Gryphon and its consolidated subsidiaries, which is considered the Company’s account predecessor, prior to the Business Combination and the name change.
ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report (as defined below), including, without limitation, statements under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act (as defined below) and Section 21E of the Exchange Act (as defined below). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other Business Combination (as defined below) and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:
| ● | our need to, and difficulty in, raising additional capital; |
| ● | downturns in the Cryptocurrency industry; |
| ● | our ability to close anticipated acquisitions, develop acquired assets and businesses, and achieve expected results of such acquisitions; he Cryptocurrency industry; |
| ● | increased interest rates; |
| ● | the inability to procure needed hardware; |
| ● | the failure or breakdown of mining equipment, or internet connection failure; |
| ● | access to reliable and reasonably priced electricity sources; |
| ● | our ability to obtain proper insurance; |
| ● | banks and other financial institutions ceasing to provide services to our industry; |
| ● | changes to the Bitcoin network’s protocols and software; |
| ● | the impact of artificial intelligence on the economy, our industry and our business; |
| ● | the unpredictable and volatile nature of the market for artificial intelligence, as a result of rapid technological advancements, shifting regulatory landscapes and fluctuating market expectations; |
| ● | our ability to regain and maintain compliance with the continued listing standards of the Nasdaq Capital Market; |
| ● | the decrease in the incentive to mine Bitcoin; |
| ● | the increase of transaction fees related to digital assets; |
| ● | the fraud or security failures of large digital asset exchanges; |
| ● | future digital asset, technological and digital currency development; |
| ● | the regulation and taxation of digital assets like Bitcoin; and |
| ● | the other risks and uncertainties discussed in “Item 1A. Risk Factors” below. |
The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
iii
The following is a summary of the principal risks described below inPart I, Item 1A “Risk Factors” in this Annual Report on Form 10-K. We believe that the risks described in the “Risk Factors” section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Annual Report on Form 10-K.
Risks Related to Our Business
| ● | 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 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. |
| ● | 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 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 Bitcoin market is exposed to financially troubled cryptocurrency-based companies. |
| ● | There is a lack of liquid markets for, and possible manipulation of, blockchain/cryptocurrency-based assets. |
| ● | Acceptance and/or widespread use of Bitcoin are uncertain. |
| ● | Cryptocurrencies, including Bitcoin, face significant scaling obstacles that can lead to high fees or slow transaction settlement times. |
| ● | The development of other cryptocurrencies and/or digital currencies may adversely affect the value of Bitcoin. |
| ● | Gryphon faces risks of Internet disruptions, which could have an adverse effect on the price of Bitcoin. |
iv
Risks Related to Operations
| ● | Gryphon is an early-stage company and has a limited history of generating profits. |
| ● | 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.” |
| ● | Gryphon’s bitcoin may be subject to loss, theft or restriction on access. |
| ● | Gryphon’s ability to adopt technology in response to changing security needs or trends and reliance on third parties for custody poses a challenge to the safekeeping of its digital assets. |
| ● | Gryphon may be affected by price fluctuations in the wholesale and retail power markets. |
| ● | 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. |
| ● | Gryphon’s business is dependent on a small number of digital asset mining equipment suppliers. |
| ● | 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. |
| ● | Gryphon’s reliance primarily on a single model of miner may subject its operations to increased risk of design flaws. |
| ● | 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. |
| ● | Gryphon’s operations, investment strategies and profitability may be adversely affected by competition from other methods of investing in Bitcoin. |
| ● | The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives. |
| ● | Gryphon may not adequately respond to price fluctuations and rapidly changing technology, which may negatively affect Gryphon’s business. |
| ● | Restrictive covenants in Gryphon’s loan agreement with Anchorage Lending CA, LLC (“Anchorage”) and its outstanding secured convertible notes may limit its operating flexibility and ability to engage in certain transactions that may be in our long-term best interest. |
v
Risks Related to Governmental Regulation and Enforcement
| ● | 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. |
| ● | If regulatory changes or interpretations of Gryphon’s activities require its registration as a money services business under the regulations promulgated by The Financial Crimes Enforcement Network under the authority of the U.S. Bank Secrecy Act, Gryphon may be required to register and comply with such regulations. If regulatory changes or interpretations of Gryphon’s activities require the licensing or other registration of Gryphon as a money transmitter (or equivalent designation) under state law in any state in which Gryphon operates, Gryphon may be required to seek licensure or otherwise register and comply with such state law. In the event of any such requirement, to the extent Gryphon decides to continue, the required registrations, licensure and regulatory compliance steps may result in extraordinary, non-recurring expenses to Gryphon. Gryphon may also decide to cease its operations. Any termination of certain operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors. |
| ● | 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. |
| ● | 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. |
| ● | 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. |
| ● | Gryphon’s management and compliance personnel have limited experience handling a listed cryptocurrency mining-related services company. |
Risks Related to Pending Acquisitions
| ● | If completed, the Captus Acquisition (as hereinafter defined) may not achieve its intended results and may result in us assuming unanticipated liabilities. |
| ● | The reserve estimates with respect to the properties to be acquired in the Captus Acquisition may differ materially from the actual amounts. |
| ● | 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. |
| ● | We will be subject to business uncertainties while the Captus Acquisition is pending, which could adversely affect our business. |
| ● | We expect to incur significant transaction costs in connection with the Captus Acquisition. |
vi
