Gryphon Digital Mining, Inc. (NASDAQ:GRYP), a company specializing in finance services within the cryptocurrency sector with a current market capitalization of $20.41 million, announced on Monday it has entered into a material definitive agreement securing approximately $2.85 million in gross proceeds through a registered direct offering.
The transaction involves the sale of 6,941,856 shares of common stock and equivalent warrants to purchase additional shares at an exercise price of $1.50 per share. According to InvestingPro data, the company has been quickly burning through cash, making this capital raise crucial for its operations.
The offering price for third-party investors was set at $0.40 for each share and accompanying warrant, while directors and officers of Gryphon Digital Mining were offered the same package at $0.516. The closing of this securities sale is expected to take place on Tuesday, subject to standard closing conditions.
InvestingPro analysis reveals that GRYP's stock has experienced significant volatility, with a dramatic 89% decline over the past year. Subscribers can access 8 additional key insights about GRYP's financial health and market performance.
The Las Vegas-based company, incorporated in Delaware, aims to utilize the net proceeds from this offering to support various corporate endeavors. These include the development of new bitcoin mining locations, capital expenditures, potential acquisitions of mining equipment, investments in AI and high-performance computing infrastructure, as well as general working capital needs. Financial metrics from InvestingPro indicate the company's challenging financial position, with an EBITDA of -$2.74 million and a concerning current ratio of 0.06, suggesting potential liquidity constraints.
The shares and warrants were sold pursuant to a prospectus supplement filed with the SEC on the date of the report, as part of a shelf registration statement that was previously filed and declared effective.
In the press release statement, Gryphon Digital Mining indicated that the funds would also potentially be used for repurchasing and redeeming its common stock. This move comes as the company continues to expand its operations in the digital mining and cryptocurrency space.
The details of the securities purchase agreement and the form of the common warrant are included in the exhibits of the current report on Form 8-K filed with the SEC. The legal opinion and consent of Ellenoff Grossman & Schole LLP regarding the securities is also filed with the report and can be referenced for further details.
This strategic financial move by Gryphon Digital Mining underscores the company's commitment to growing its footprint in the digital asset industry and its pursuit of new opportunities in bitcoin mining and related technologies.
In other recent news, Gryphon Digital Mining has made significant strides in its operations. The company secured natural gas assets in British Columbia, a strategic move expected to generate low-cost power for its digital mining and artificial intelligence infrastructure. This acquisition, along with the appointment of energy industry veteran Eric Gallie, is projected to substantially reduce power production costs.
Gryphon's financial health, which has been rated as weak by InvestingPro, could potentially improve with these developments and the recent debt restructuring with Anchorage Digital. This restructuring resulted in a reduction of the company's outstanding debt by over 70%.
Analyst firm H.C. Wainwright maintains a neutral stance on Gryphon, despite these developments and the company's recent leadership changes, including the appointment of Steve Gutterman as CEO. Gryphon also reported mining 17.26439 bitcoins in November 2024, which generated estimated revenues of $1,487,580.
The company is currently dealing with a lawsuit filed by its former CEO, Robby Chang, but has been cleared of liability in a security breach incident involving Sphere 3D Corp. Gryphon continues to pursue a counterclaim against Sphere for alleged breaches of their Master Service Agreement, seeking approximately $45 million in damages. These are all recent developments from Gryphon Digital Mining.
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