Stronghold Digital Mining, Inc. (NASDAQ:
SDIG) (“Stronghold”, the “Company”, or “we”) today
announced financial and operational results for the second quarter
ended June 30, 2024, and provided additional strategic updates:
Second Quarter 2024 Financial Highlights
- Revenues of $19.1 million,
down 30.6% sequentially and up 4.8% year-over-year.
Revenues comprised $18.8 million from cryptocurrency operations,
$0.2 million from the sale of energy, and $0.1 million from other
revenue.
- GAAP Net Loss of $21.3
million and non-GAAP Adjusted EBITDA loss of $0.3
million.1
Strategic Alternatives
The formal strategic review process being
conducted by Stronghold and its Board of Directors (the “Board”)
continues with the assistance of outside financial and legal
advisors. To date, the Company has received numerous bids for all
or parts of the Company. The Company and its Board continue to
consider a wide range of alternatives to maximize shareholder
value, including, but not limited to, the sale of all or parts of
the Company, another strategic transaction involving some or all of
the assets of the Company, and strategic financing. There is no
deadline or definitive timetable set for the completion of the
strategic alternatives process, and there can be no assurance any
proposal will be made or accepted, any agreement will be executed,
or any transaction will be consummated in connection with this
review.
As one part of its strategic review process,
Stronghold has assessed opportunities to expand and enhance its
current sites. In May and June 2024, Stronghold submitted
preliminary load studies to local utilities to import an additional
400 megawatts (“MW”) at Panther Creek. One of the preliminary load
studies was for an additional 250 MW and found that such power may
be able to be delivered in stages over the next one to five years.
The Company has submitted a project feasibility report, which is
the next step toward securing this 250 MW. The preliminary load
studies associated with the remaining capacity are still in
progress. In August 2024, Stronghold secured a one-year option with
certain extension rights to purchase up to approximately 1,140
acres of land adjacent to the Company’s existing Panther Creek
site. The Company believes that this option, along with the ability
to expand the electricity and fiber available at the existing site
and proximity to other data centers, provides Panther Creek with a
significant opportunity for data center expansion. Stronghold’s
Scrubgrass site is 636 acres, and the Company is pursuing various
expansion opportunities including preliminary load studies
submitted to import an additional 390 MW from the grid.
In July, Stronghold engaged Appleby Strategy
Group LLC (“ASG”), an end-to-end data center solutions expert, to
advise the Company in evaluating additional potential uses for the
Scrubgrass and Panther Creek sites. Initial assessments from ASG
support the view that expansive access to land, electricity, fiber,
and water are key differentiating traits of the Stronghold sites
that may make them attractive for large-scale data center
development.
PJM Base Residual Auction
On July 31, 2024, PJM Interconnection LLC
(“PJM”) held its annual Base Residual Auction2 for capacity reserve
scheduling for the 12-month period from June 2025 through May 2026
delivery year. Stronghold’s Panther Creek and Scrubgrass Plants
offered capacity into the auction, as required, and each cleared
the auction at $269.92/MW/day, up approximately 833% from
$28.92/MW/day in last year’s Base Residual Auction. The Panther
Creek Plant cleared 69.2 MW of capacity in the auction, which the
Company estimates will yield approximately $7 million of
incremental revenue at an estimated 100% net margin during the
12-month period from June 2025 through May 2026. The Scrubgrass
Plant cleared 75.6 MW in the auction and has since exited 17 MW of
that commitment through bi-lateral transactions, retaining 58.6 MW
of clearing capacity. The Company is currently evaluating options
with its remaining capacity commitment at Scrubgrass, including
exiting the additional clearing capacity through bi-lateral
transactions, with a focus on maximizing the flexibility and
long-term potential of its data center operations.
Increased Coal Refuse Reclamation and
Energy Tax Credit
On July 11, 2024, the Pennsylvania General
Assembly completed its annual commonwealth budget process and
passed PA Senate Bill 6543, which Governor Josh Shapiro
subsequently signed into law. The law increases the Coal Refuse
Reclamation and Energy Tax Credit from $4 per ton to $8 per ton,
the annual program cap from $20 million to $55 million, and the
individual facility cap from 22.2% to 26.5%. The law did not change
the duration of the program, which remains effective through 2036.
Stronghold estimates this increase in the waste coal tax credit
will result in approximately $2 to $4 million per annum of
incremental net income.
PJM Guidance Regarding Co-Located
Load
On April 14, 2024, PJM updated its “Guidance on
Co-Located Load.” Based on this update, Stronghold believes that
its data center loads qualify as PJM “In Network” load, which has
the potential to enable ancillary revenue streams such as demand
response. Stronghold is currently in the process of registering its
Scrubgrass data center in the demand response program. Based on PJM
guidance, for the Scrubgrass or Panther Creek data centers to
participate fully in the demand response programs, the Company
notes that the respective plant would need to exit most or all of
its future capacity commitment. Stronghold is working with advisors
to better understand its options while contributing positively to
grid reliability and building long-term value for its
shareholders.
Bitcoin Mining Update
Stronghold mined approximately 299 Bitcoin
during the second quarter of 2024 and generated $0.2 million of
energy revenue, equivalent to 3 Bitcoin at the average price of
Bitcoin during the period, for a total of 302 Bitcoin-equivalent
during the quarter, which was down approximately 46% from the 561
Bitcoin-equivalent production during the first quarter of 2024. The
Bitcoin halving event took place on April 19, 2024, reducing the
block subsidy to 3.125 from 6.25. Bitcoin hash price, which is
Stronghold’s preferred measure for Bitcoin mining economics and
represents revenue per unit of hash rate, thus capturing Bitcoin
price, transaction fees, and network hash rate, averaged $68/PH/s
per day during the second quarter of 2024, a 26% decline from the
first quarter 2024 average of $92/PH/s per day. In July, Stronghold
generated 63 Bitcoin through its mining operations and
approximately $0.2 million of energy revenue, or 3
Bitcoin-equivalent based on the average Bitcoin price during the
month. The total Bitcoin-equivalent production in July was 66, up
approximately 5% versus the 63 generated in June. July total
revenue is estimated to be approximately $4.1 million, nearly flat
with the prior month.
Liquidity and Capital Resources
As of June 30, 2024, and August 9, 2024, the
Company had approximately $5.1 million and $3.6 million,
respectively, of cash, cash equivalents, and Bitcoin on its balance
sheet, which included approximately 4 Bitcoin and 2 Bitcoin,
respectively. As of June 30, 2024, the Company had principal amount
of outstanding indebtedness of approximately $55.1 million.
Stronghold currently has no material capital commitments. As of
August 9, 2024, Stronghold had approximately $3.4 million of
capacity remaining under its at-the-market offering agreement
(“ATM”) with H.C. Wainwright & Co., LLC. The Company has not
sold any of its shares under the ATM during 2024. During 2023,
Stronghold issued approximately $11.6 million of Class A common
stock at an average price of $6.47 per share under its ATM for
approximately $11.2 million of net proceeds, with approximately
$0.4 million paid in commissions.
Stronghold Carbon Capture
Update
As previously announced, test results from the
Scrubgrass Plant have demonstrated carbonation of up to 14% by
starting weight of ash, an increase from prior estimates of up to
12%. The Company is continuing in the audit process with Puro, with
the goal of accreditation at the Scrubgrass Plant. Please see
the Carbon Capture Forum Presentation and the disclosures
made in the Company’s Securities and Exchange Commission (“SEC”)
filings for additional details and assumptions relating to the
carbon capture initiative.
Conference Call
Stronghold will host a conference call today,
August 14, 2024, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific
Time) with an accompanying presentation to discuss these results.
To participate, a live webcast of the call will be available on the
Investor Relations page of the Company’s website at
ir.strongholddigitalmining.com. To access the call by phone, please
use the following link Stronghold Digital Mining Second Quarter
2024 Earnings Call. After registering, an email will be sent,
including dial-in details and a unique conference call access code
required to join the live call. To ensure you are connected prior
to the beginning of the call, please register a minimum of 15
minutes before the start of the call.
A replay will be available on the Company's
Investor Relations website shortly after the event at
ir.strongholddigitalmining.com.
About Stronghold Digital Mining,
Inc.
Stronghold is a vertically integrated Bitcoin
mining company with an emphasis on environmentally beneficial
operations. Stronghold houses its miners at its wholly owned and
operated Scrubgrass Plant and Panther Creek Plant, both of which
are low-cost, environmentally beneficial coal refuse power
generation facilities in Pennsylvania.
Cautionary Statement Concerning
Forward-Looking Statements
Certain statements contained in this press
release, including guidance, constitute “forward-looking
statements.” within the meaning of the Private Securities
Litigation Reform Act of 1995. You can identify forward-looking
statements because they contain words such as “believes,”
“expects,” “may,” “will,” “should,” “seeks,” “approximately,”
“intends,” “plans,” “estimates” or “anticipates” or the negative of
these words and phrases or similar words or phrases which are
predictions of or indicate future events or trends and which do not
relate solely to historical matters. Forward-looking statements and
the business prospects of Stronghold are subject to a number of
risks and uncertainties that may cause Stronghold’s actual results
in future periods to differ materially from the forward-looking
statements, including with respect to its potential carbon capture
initiative and with respect to completing a strategic review
process or entering into a transaction. These risks and
uncertainties include, among other things: the hybrid nature of our
business model, which is highly dependent on the price of Bitcoin;
our dependence on the level of demand and financial performance of
the crypto asset industry; our ability to manage growth, business,
financial results and results of operations; uncertainty regarding
our evolving business model; our ability to retain management and
key personnel and the integration of new management; our ability to
raise capital to fund business growth; our ability to maintain
sufficient liquidity to fund operations, growth and acquisitions;
our substantial indebtedness and its effect on our results of
operations and our financial condition; uncertainty regarding the
outcomes of any investigations or proceedings; our ability to enter
into purchase agreements, acquisitions and financing transactions;
public health crises, epidemics, and pandemics such as the
coronavirus pandemic; our ability to procure crypto asset mining
equipment from foreign-based suppliers; our ability to maintain our
relationships with our third-party brokers and our dependence on
their performance; our ability to procure crypto asset mining
equipment including to upgrade our current fleet; developments and
changes in laws and regulations, including increased regulation of
the crypto asset industry through legislative action and revised
rules and standards applied by The Financial Crimes Enforcement
Network under the authority of the U.S. Bank Secrecy Act and the
Investment Company Act; the future acceptance and/or widespread use
of, and demand for, Bitcoin and other crypto assets; our ability to
respond to price fluctuations and rapidly changing technology; our
ability to operate our coal refuse power generation facilities as
planned; our ability to remain listed on a stock exchange and
maintain an active trading market; our ability to avail ourselves
of tax credits for the clean-up of coal refuse piles; legislative
or regulatory changes, and liability under, or any future inability
to comply with, existing or future energy regulations or
requirements; our ability to replicate and scale the carbon capture
project; our ability to manage costs related to the carbon capture
project; and our ability to monetize our carbon capture project,
including through the private market; our ability to qualify for,
obtain, monetize or otherwise benefit from the Puro registry and
Section 45Q tax credits, our ability to timely complete a strategic
review process and our ability to consummate a transaction in
connection with such process, in part or at all, our ability to
qualify for demand response programs, our ability to qualify as PJM
“In Network” load, our ability to prepare our sites for and execute
on GPU computing initiatives and our ability to expand the power
capacity at our sites. More information on these risks and other
potential factors that could affect our financial results are
included in our filings with the SEC, including in the “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” sections of our Annual Report
on Form 10-K filed on March 8, 2024, and in our subsequently filed
Quarterly Reports on Form 10-Q. The Company expects to file its
Quarterly Report on Form 10-Q for the second quarter of 2024 on
August 14, 2024. Any forward-looking statement or guidance speaks
only as of the date as of which such statement is made, and, except
as required by law, we undertake no obligation to update or revise
publicly any forward-looking statements or guidance, whether
because of new information, future events, or otherwise.
|
STRONGHOLD DIGITAL MINING, INC.CONDENSED
CONSOLIDATED BALANCE
SHEETS(UNAUDITED) |
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
4,876,152 |
|
|
$ |
4,214,613 |
|
Digital currencies |
|
253,710 |
|
|
|
3,175,595 |
|
Accounts receivable |
|
570,197 |
|
|
|
507,029 |
|
Inventory |
|
4,470,089 |
|
|
|
4,196,812 |
|
Prepaid insurance |
|
2,736,501 |
|
|
|
3,787,048 |
|
Due from related parties |
|
97,288 |
|
|
|
97,288 |
|
Other current assets |
|
2,109,205 |
|
|
|
1,675,084 |
|
Total current assets |
|
15,113,142 |
|
|
|
17,653,469 |
|
Equipment deposits |
|
- |
|
|
|
8,000,643 |
|
Property, plant and equipment, net |
|
134,083,470 |
|
|
|
144,642,771 |
|
Operating lease right-of-use assets |
|
1,107,044 |
|
|
|
1,472,747 |
|
Land |
|
1,748,440 |
|
|
|
1,748,440 |
|
Road bond |
|
299,738 |
|
|
|
299,738 |
|
Security deposits |
|
348,888 |
|
|
|
348,888 |
|
Other noncurrent assets |
|
199,480 |
|
|
|
170,488 |
|
TOTAL ASSETS |
$ |
152,900,202 |
|
|
$ |
174,337,184 |
|
LIABILITIES: |
|
|
|
Accounts payable |
$ |
13,074,814 |
|
|
$ |
11,857,052 |
|
Accrued liabilities |
|
11,558,654 |
|
|
|
10,787,895 |
|
Financed insurance premiums |
|
1,425,592 |
|
|
|
2,927,508 |
|
Current portion of long-term debt, net of discounts and issuance
fees |
|
16,347,388 |
|
|
|
7,936,147 |
|
Current portion of operating lease liabilities |
|
668,604 |
|
|
|
788,706 |
|
Due to related parties |
|
1,106,704 |
|
|
|
718,838 |
|
Total current liabilities |
|
44,181,756 |
|
|
|
35,016,146 |
|
Asset retirement obligation |
|
1,103,215 |
|
|
|
1,075,728 |
|
Warrant liabilities |
|
13,914,884 |
|
|
|
25,210,429 |
|
Long-term debt, net of discounts and issuance fees |
|
38,470,192 |
|
|
|
48,203,762 |
|
Long-term operating lease liabilities |
|
499,886 |
|
|
|
776,079 |
|
Other noncurrent liabilities |
|
2,569,356 |
|
|
|
241,420 |
|
Total liabilities |
|
100,739,289 |
|
|
|
110,523,564 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
REDEEMABLE COMMON STOCK: |
|
|
|
Common Stock — Class V; $0.0001 par value; 34,560,000 shares
authorized; 2,405,760 shares issued and outstanding as of June 30,
2024, and December 31, 2023. |
|
10,416,454 |
|
|
|
20,416,116 |
|
Total redeemable common stock |
|
10,416,454 |
|
|
|
20,416,116 |
|
STOCKHOLDERS' EQUITY: |
|
|
|
Common Stock — Class A; $0.0001 par value; 685,440,000 shares
authorized; 12,980,864 and 11,115,561 shares issued and outstanding
as of June 30, 2024, and December 31, 2023, respectively. |
|
1,298 |
|
|
|
1,112 |
|
Series C convertible preferred stock; $0.0001 par value; 23,102
shares authorized; 5,990 shares issued and outstanding as of June
30, 2024, and December 31, 2023, respectively. |
|
1 |
|
|
|
1 |
|
Series D convertible preferred stock; $0.0001 par value; 15,582
shares authorized; 0 and 7,610 shares issued and outstanding as of
June 30, 2024, and December 31, 2023, respectively. |
|
- |
|
|
|
1 |
|
Accumulated deficits |
|
(336,973,510 |
) |
|
|
(331,647,755 |
) |
Additional paid-in capital |
|
378,716,670 |
|
|
|
375,044,145 |
|
Total stockholders' equity |
|
41,744,459 |
|
|
|
43,397,504 |
|
Total redeemable common stock and stockholders' equity |
|
52,160,913 |
|
|
|
63,813,620 |
|
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND
STOCKHOLDERS' EQUITY |
$ |
152,900,202 |
|
|
$ |
174,337,184 |
|
|
|
|
|
|
STRONGHOLD DIGITAL MINING, INC.CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
|
|
|
|
|
|
|
|
OPERATING REVENUES: |
|
|
|
|
|
|
|
Cryptocurrency mining |
$ |
14,988,526 |
|
|
$ |
13,782,798 |
|
|
$ |
36,279,584 |
|
|
$ |
25,080,096 |
|
Cryptocurrency hosting |
|
3,824,299 |
|
|
|
3,079,701 |
|
|
|
9,281,828 |
|
|
|
5,405,697 |
|
Energy |
|
221,370 |
|
|
|
740,793 |
|
|
|
921,437 |
|
|
|
3,471,779 |
|
Capacity |
|
- |
|
|
|
582,557 |
|
|
|
- |
|
|
|
1,442,067 |
|
Other |
|
69,944 |
|
|
|
47,892 |
|
|
|
143,475 |
|
|
|
100,317 |
|
Total operating revenues |
|
19,104,139 |
|
|
|
18,233,741 |
|
|
|
46,626,324 |
|
|
|
35,499,956 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
Fuel |
|
5,798,304 |
|
|
|
6,291,501 |
|
|
|
13,209,132 |
|
|
|
13,705,515 |
|
Operations and maintenance |
|
9,081,647 |
|
|
|
8,804,097 |
|
|
|
17,323,372 |
|
|
|
17,245,020 |
|
General and administrative |
|
11,746,585 |
|
|
|
10,077,738 |
|
|
|
18,344,931 |
|
|
|
18,546,493 |
|
Depreciation and amortization |
|
9,290,563 |
|
|
|
8,634,967 |
|
|
|
18,805,217 |
|
|
|
16,357,808 |
|
Loss on disposal of fixed assets |
|
1,731,105 |
|
|
|
17,281 |
|
|
|
1,731,105 |
|
|
|
108,367 |
|
Realized loss (gain) on sale of digital currencies |
|
243,688 |
|
|
|
(266,665 |
) |
|
|
(380,419 |
) |
|
|
(593,433 |
) |
Unrealized gain on digital currencies |
|
(145,994 |
) |
|
|
- |
|
|
|
(147,221 |
) |
|
|
- |
|
Realized gain on sale of miner assets |
|
- |
|
|
|
- |
|
|
|
(36,012 |
) |
|
|
- |
|
Impairments on digital currencies |
|
- |
|
|
|
254,353 |
|
|
|
- |
|
|
|
325,830 |
|
Total operating expenses |
|
37,745,898 |
|
|
|
33,813,272 |
|
|
|
68,850,105 |
|
|
|
65,695,600 |
|
NET OPERATING LOSS |
|
(18,641,759 |
) |
|
|
(15,579,531 |
) |
|
|
(22,223,781 |
) |
|
|
(30,195,644 |
) |
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
Interest expense |
|
(2,248,063 |
) |
|
|
(2,603,478 |
) |
|
|
(4,511,472 |
) |
|
|
(4,987,391 |
) |
Loss on debt extinguishment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(28,960,947 |
) |
Changes in fair value of warrant liabilities |
|
(382,175 |
) |
|
|
6,475,880 |
|
|
|
11,295,545 |
|
|
|
5,761,291 |
|
Other |
|
5,000 |
|
|
|
15,000 |
|
|
|
15,000 |
|
|
|
30,000 |
|
Total other (expense) income |
|
(2,625,238 |
) |
|
|
3,887,402 |
|
|
|
6,799,073 |
|
|
|
(28,157,047 |
) |
NET LOSS |
|
(21,266,997 |
) |
|
|
(11,692,129 |
) |
|
|
(15,424,708 |
) |
|
|
(58,352,691 |
) |
NET LOSS attributable to noncontrolling
interest |
|
(3,325,180 |
) |
|
|
(3,355,873 |
) |
|
|
(2,406,893 |
) |
|
|
(21,475,004 |
) |
NET LOSS attributable to Stronghold Digital Mining,
Inc. |
$ |
(17,941,817 |
) |
|
$ |
(8,336,256 |
) |
|
$ |
(13,017,815 |
) |
|
$ |
(36,877,687 |
) |
NET LOSS attributable to Class A common
shareholders: |
|
|
|
|
|
|
|
Basic |
$ |
(1.25 |
) |
|
$ |
(1.35 |
) |
|
$ |
(0.92 |
) |
|
$ |
(6.99 |
) |
Diluted |
$ |
(1.25 |
) |
|
$ |
(1.35 |
) |
|
$ |
(0.92 |
) |
|
$ |
(6.99 |
) |
Weighted average number of Class A common shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
14,369,800 |
|
|
|
6,163,450 |
|
|
|
14,179,810 |
|
|
|
5,274,471 |
|
Diluted |
|
14,369,800 |
|
|
|
6,163,450 |
|
|
|
14,179,810 |
|
|
|
5,274,471 |
|
|
STRONGHOLD DIGITAL MINING, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED) |
|
|
|
Six Months Ended |
|
June 30, 2024 |
|
June 30, 2023 |
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(15,424,708 |
) |
|
$ |
(58,352,691 |
) |
Adjustments to reconcile net loss to cash flows from operating
activities: |
|
|
|
Depreciation and amortization |
|
18,805,217 |
|
|
|
16,357,808 |
|
Accretion of asset retirement obligation |
|
27,484 |
|
|
|
26,102 |
|
Loss on disposal of fixed assets |
|
1,731,105 |
|
|
|
108,367 |
|
Realized gain on sale of miner assets |
|
(36,012 |
) |
|
|
- |
|
Change in value of accounts receivable |
|
399,192 |
|
|
|
1,142,750 |
|
Amortization of debt issuance costs |
|
102,946 |
|
|
|
109,620 |
|
Stock-based compensation |
|
3,606,907 |
|
|
|
6,816,048 |
|
Loss on debt extinguishment |
|
- |
|
|
|
28,960,947 |
|
Changes in fair value of warrant liabilities |
|
(11,295,545 |
) |
|
|
(5,761,291 |
) |
Non-cash adjustments for loss contingencies |
|
5,218,167 |
|
|
|
- |
|
Other |
|
408,303 |
|
|
|
(532,880 |
) |
(Increase) decrease in digital currencies: |
|
|
|
Mining revenue |
|
(42,427,846 |
) |
|
|
(28,709,950 |
) |
Net proceeds from sale of digital currencies |
|
45,596,244 |
|
|
|
27,064,294 |
|
Unrealized gain on digital currencies |
|
(147,221 |
) |
|
|
- |
|
Impairments on digital currencies |
|
- |
|
|
|
325,830 |
|
(Increase) decrease in assets: |
|
|
|
Accounts receivable |
|
(462,359 |
) |
|
|
7,140,368 |
|
Prepaid insurance |
|
2,727,056 |
|
|
|
3,093,404 |
|
Due from related parties |
|
- |
|
|
|
(64,276 |
) |
Inventory |
|
(273,277 |
) |
|
|
303,468 |
|
Other assets |
|
(1,231,144 |
) |
|
|
306,998 |
|
Increase (decrease) in liabilities: |
|
|
|
Accounts payable |
|
1,032,860 |
|
|
|
(145,649 |
) |
Due to related parties |
|
387,866 |
|
|
|
219,778 |
|
Accrued liabilities |
|
(2,413,906 |
) |
|
|
27,326 |
|
Other liabilities, including contract liabilities |
|
(291,811 |
) |
|
|
(78,849 |
) |
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES |
|
6,039,518 |
|
|
|
(1,642,478 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
Purchases of property, plant and equipment |
|
(573,002 |
) |
|
|
(10,581,332 |
) |
Proceeds from sale of property, plant and equipment, including
CIP |
|
180,000 |
|
|
|
- |
|
NET CASH FLOWS USED IN INVESTING ACTIVITIES |
|
(393,002 |
) |
|
|
(10,581,332 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
Repayments of debt |
|
(1,806,551 |
) |
|
|
(2,446,953 |
) |
Repayments of financed insurance premiums |
|
(3,178,426 |
) |
|
|
(3,202,071 |
) |
Proceeds from debt, net of issuance costs paid in cash |
|
- |
|
|
|
(147,385 |
) |
Proceeds from private placements, net of issuance costs paid in
cash |
|
- |
|
|
|
9,824,567 |
|
Proceeds from ATM, net of issuance costs paid in cash |
|
- |
|
|
|
2,825 |
|
Proceeds from exercise of warrants |
|
- |
|
|
|
316 |
|
NET CASH FLOWS (USED IN) PROVIDED BY FINANCING
ACTIVITIES |
|
(4,984,977 |
) |
|
|
4,031,299 |
|
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS |
|
661,539 |
|
|
|
(8,192,511 |
) |
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIOD |
|
4,214,613 |
|
|
|
13,296,703 |
|
CASH AND CASH EQUIVALENTS - END OF PERIOD |
$ |
4,876,152 |
|
|
$ |
5,104,192 |
|
|
|
|
|
Use and Reconciliation of Non-GAAP
Financial Measures
This press release contains certain non-GAAP
financial measures, including Adjusted EBITDA, as a measure of our
operating performance. Adjusted EBITDA is a non-GAAP financial
measure. We define Adjusted EBITDA as net income (loss) before
interest, taxes, depreciation and amortization, further adjusted by
the removal of one-time transaction costs, non-recurring expenses,
realized gains and losses on the sale of long-term assets, expenses
related to stock-based compensation, gains or losses on
extinguishment of debt, or changes in the fair value of warrant
liabilities in the period presented. See reconciliation below.
Our Board and management team use Adjusted
EBITDA to assess our financial performance because they believe it
allows them to compare our operating performance on a consistent
basis across periods by removing the effects of our capital
structure (such as varying levels of interest expense and income),
asset base (such as depreciation, amortization, impairments,
realized gains and losses on the sale of long-term assets) and
other items (such as one-time transaction costs, expenses related
to stock-based compensation, and gains and losses on derivative
contracts) that impact the comparability of financial results from
period to period. We present Adjusted EBITDA because we believe it
provides useful information regarding the factors and trends
affecting our business in addition to measures calculated under
GAAP. Adjusted EBITDA is not a financial measure presented in
accordance with GAAP. We believe that the presentation of this
non-GAAP financial measure will provide useful information to
investors and analysts in assessing our financial performance and
results of operations across reporting periods by excluding items
we do not believe are indicative of our core operating performance.
Net income (loss) is the GAAP measure most directly comparable to
Adjusted EBITDA. Our non-GAAP financial measure should not be
considered as an alternative to the most directly comparable GAAP
financial measure. You are encouraged to evaluate each of these
adjustments and the reasons we consider them appropriate for
supplemental analysis. In evaluating Adjusted EBITDA, you should be
aware that in the future we may incur expenses that are the same as
or similar to some of the adjustments in such presentation. Our
presentation of Adjusted EBITDA should not be construed as an
inference that our future results will be unaffected by unusual or
non-recurring items. There can be no assurance that we will not
modify the presentation of Adjusted EBITDA in the future, and any
such modification may be material. Adjusted EBITDA has important
limitations as an analytical tool, and you should not consider
Adjusted EBITDA in isolation or as a substitute for analysis of our
results as reported under GAAP. Our presentation of Adjusted EBITDA
should be read in conjunction with the financial statements
furnished in our Form 10-Q for the second quarter ended June 30,
2024, that the Company expects to file on August 14, 2024. Because
Adjusted EBITDA may be defined differently by other companies in
our industry, our definition of this non-GAAP financial measure may
not be comparable to similarly titled measures of other companies,
thereby diminishing its utility.
|
STRONGHOLD DIGITAL MINING,
INC.RECONCILIATION OF NON-GAAP ADJUSTED
EBITDA |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
(in thousands) |
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
|
|
|
|
Net Income (Loss)—GAAP |
$ |
(21,267 |
) |
|
$ |
(11,692 |
) |
|
$ |
(15,425 |
) |
|
$ |
(58,353 |
) |
Plus: |
|
|
|
|
|
|
|
Interest expense |
|
2,248 |
|
|
|
2,603 |
|
|
|
4,511 |
|
|
|
4,987 |
|
Depreciation and amortization |
|
9,291 |
|
|
|
8,635 |
|
|
|
18,805 |
|
|
|
16,358 |
|
Loss on debt extinguishment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
28,961 |
|
Non-recurring expenses 1 |
|
5,619 |
|
|
|
(46 |
) |
|
|
6,456 |
|
|
|
636 |
|
Stock-based compensation |
|
1,668 |
|
|
|
4,367 |
|
|
|
3,607 |
|
|
|
6,816 |
|
Loss on disposal of fixed assets |
|
1,731 |
|
|
|
17 |
|
|
|
1,731 |
|
|
|
108 |
|
Realized gain on sale of miner assets |
|
- |
|
|
|
- |
|
|
|
(36 |
) |
|
|
- |
|
Changes in fair value of warrant liabilities |
|
382 |
|
|
|
(6,476 |
) |
|
|
(11,296 |
) |
|
|
(5,761 |
) |
Accretion of asset retirement obligation |
|
14 |
|
|
|
13 |
|
|
|
27 |
|
|
|
26 |
|
Adjusted EBITDA—Non-GAAP 2 |
$ |
(314 |
) |
|
$ |
(2,579 |
) |
|
$ |
8,380 |
|
|
$ |
(6,222 |
) |
|
|
|
|
|
|
|
|
1 Includes the following non-recurring expenses: estimated accrual
for two loss contingencies, one-time legal fees, and other one-time
items. |
2 As previously disclosed, the Company adopted ASU 2023-08
effective January 1, 2024, using a modified retrospective
transition method, with a cumulative-effect adjustment of
approximately $0.1 million recorded to the opening balance of
retained earnings. In conjunction with this accounting change and
following consultation with the SEC, realized gains/losses on sale
of digital currencies and unrealized gains/losses on digital
currencies will no longer be excluded in the Company's
determination of Adjusted EBITDA. Furthermore, the Company revised
its Adjusted EBITDA for the three and six months ended June 30,
2023, to remove adjustments for impairments on digital currencies
and realized gain on sale of digital currencies - both of which are
immaterial. |
|
|
|
|
|
|
|
|
Investor Contact:
Matt GloverGateway Group, Inc.
SDIG@gateway-grp.com1-949-574-3860
Media Contact:
contact@strongholddigitalmining.com
1 See Non-GAAP reconciliation table below.2 PJM 2025-2026 BRA:
https://pjm.com/-/media/markets-ops/rpm/rpm-auction-info/2025-2026/2025-2026-base-residual-auction-report.ashx3
Pennsylvania State Tax Code Bill 654: Bill Information - Senate
Bill 654; Regular Session 2023-2024 - PA General Assembly
(state.pa.us)
Stronghold Digital Mining (NASDAQ:SDIG)
Historical Stock Chart
From Jul 2024 to Aug 2024
Stronghold Digital Mining (NASDAQ:SDIG)
Historical Stock Chart
From Aug 2023 to Aug 2024