|
|
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
Item 2.02 |
Results of Operations and Financial Condition.
|
Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
Item 8.01 |
Other Events.
|
Item 9.01 |
Financial Statements and Exhibits.
|
(d) |
Exhibits.
|
Exhibit
Number
|
Description
|
Press Release issued by Stronghold Digital Mining, Inc., dated as of May 2, 2024.
|
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
* |
Furnished herewith.
|
STRONGHOLD DIGITAL MINING, INC. | ||
By:
|
/s/ Gregory A. Beard
|
|
Name: Gregory A. Beard
|
||
Title: Chief Executive Officer and Chairman
|
||
Date: May 2, 2024
|
• |
The Company generated revenues of $27.5 million during the first quarter of 2024, up 27%
sequentially and 59% year-over-year. Revenues comprised $26.7 million from cryptocurrency operations, $0.7 million from the sale of energy, and $0.1 million from other
activities.
|
• |
First quarter 2024 fixed costs were down 3% sequentially and 11% year-over-year, demonstrating
Stronghold’s operating leverage and cost controls. Fixed costs include operations & maintenance expenses and general & administrative expenses, excluding
stock-based compensation.
|
• |
The Company earned GAAP Net Income of $5.8 million and non-GAAP Adjusted EBITDA of $8.7 million
during the first quarter of 2024. 1
|
March 31, 2024
|
December 31, 2023
|
|||||||
ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
7,537,607
|
$
|
4,214,613
|
||||
Digital currencies
|
2,704
|
3,175,595
|
||||||
Accounts receivable
|
1,739,187
|
507,029
|
||||||
Inventory
|
4,085,923
|
4,196,812
|
||||||
Prepaid insurance
|
2,391,206
|
3,787,048
|
||||||
Due from related parties
|
97,288
|
97,288
|
||||||
Other current assets
|
2,215,805
|
1,675,084
|
||||||
Total current assets
|
18,069,720
|
17,653,469
|
||||||
Equipment deposits
|
—
|
8,000,643
|
||||||
Property, plant and equipment, net
|
144,269,680
|
144,642,771
|
||||||
Operating lease right-of-use assets
|
1,283,338
|
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
|
170,488
|
170,488
|
||||||
TOTAL ASSETS
|
$
|
166,190,292
|
$
|
174,337,184
|
||||
LIABILITIES:
|
||||||||
Accounts payable
|
$
|
11,510,296
|
$
|
11,857,052
|
||||
Accrued liabilities
|
9,599,950
|
10,787,895
|
||||||
Financed insurance premiums
|
1,513,704
|
2,927,508
|
||||||
Current portion of long-term debt, net of discounts and issuance fees
|
12,058,049
|
7,936,147
|
||||||
Current portion of operating lease liabilities
|
729,821
|
788,706
|
||||||
Due to related parties
|
619,947
|
718,838
|
||||||
Total current liabilities
|
36,031,767
|
35,016,146
|
||||||
Asset retirement obligation
|
1,089,471
|
1,075,728
|
||||||
Warrant liabilities
|
13,532,709
|
25,210,429
|
||||||
Long-term debt, net of discounts and issuance fees
|
43,153,392
|
48,203,762
|
||||||
Long-term operating lease liabilities
|
639,586
|
776,079
|
||||||
Contract liabilities
|
67,244
|
241,420
|
||||||
Total liabilities
|
94,514,169
|
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 March 31, 2024, and December 31, 2023.
|
9,704,926
|
20,416,116
|
||||||
Total redeemable common stock
|
9,704,926
|
20,416,116
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Common Stock – Class A; $0.0001 par value; 685,440,000 shares authorized; 12,900,076 and 11,115,561
shares issued and outstanding as of March 31, 2024, and December 31, 2023, respectively.
|
1,290
|
1,112
|
||||||
Series C convertible preferred stock; $0.0001 par value; 23,102 shares authorized; 0 and 5,990 shares
issued and outstanding as of March 31, 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 March 31, 2024, and December 31, 2023, respectively.
|
—
|
1
|
||||||
Accumulated deficits
|
(314,994,985
|
)
|
(331,647,755
|
)
|
||||
Additional paid-in capital
|
376,964,891
|
375,044,145
|
||||||
Total stockholders' equity
|
61,971,197
|
43,397,504
|
||||||
Total redeemable common stock and stockholders' equity
|
71,676,123
|
63,813,620
|
||||||
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY
|
$
|
166,190,292
|
$
|
174,337,184
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
OPERATING REVENUES:
|
||||||||
Cryptocurrency mining
|
$
|
21,291,058
|
$
|
11,297,298
|
||||
Cryptocurrency hosting
|
5,457,529
|
2,325,996
|
||||||
Energy
|
700,067
|
2,730,986
|
||||||
Capacity
|
—
|
859,510
|
||||||
Other
|
73,531
|
52,425
|
||||||
Total operating revenues
|
27,522,185
|
17,266,215
|
||||||
OPERATING EXPENSES:
|
||||||||
Fuel
|
7,410,828
|
7,414,014
|
||||||
Operations and maintenance
|
8,241,725
|
8,440,923
|
||||||
General and administrative
|
6,598,346
|
8,468,755
|
||||||
Depreciation and amortization
|
9,514,654
|
7,722,841
|
||||||
Loss on disposal of fixed assets
|
—
|
91,086
|
||||||
Realized gain on sale of digital currencies
|
(624,107
|
)
|
(326,768
|
)
|
||||
Unrealized gain on digital currencies
|
(1,227
|
)
|
—
|
|||||
Realized gain on sale of miner assets
|
(36,012
|
)
|
—
|
|||||
Impairments on digital currencies
|
—
|
71,477
|
||||||
Total operating expenses
|
31,104,207
|
31,882,328
|
||||||
NET OPERATING LOSS
|
(3,582,022
|
)
|
(14,616,113
|
)
|
||||
OTHER INCOME (EXPENSE):
|
||||||||
Interest expense
|
(2,263,409
|
)
|
(2,383,913
|
)
|
||||
Loss on debt extinguishment
|
—
|
(28,960,947
|
)
|
|||||
Changes in fair value of warrant liabilities
|
11,677,720
|
(714,589
|
)
|
|||||
Other
|
10,000
|
15,000
|
||||||
Total other income (expense)
|
9,424,311
|
(32,044,449
|
)
|
|||||
NET INCOME (LOSS)
|
$
|
5,842,289
|
$
|
(46,660,562
|
)
|
|||
NET INCOME (LOSS) attributable to noncontrolling interest
|
918,287
|
(18,119,131
|
)
|
|||||
NET INCOME (LOSS) attributable to Stronghold Digital Mining, Inc.
|
$
|
4,924,002
|
$
|
(28,541,431
|
)
|
|||
NET INCOME (LOSS) attributable to Class A common shareholders:
|
||||||||
Basic
|
$
|
0.35
|
$
|
(6.52
|
)
|
|||
Diluted
|
$
|
0.35
|
$
|
(6.52
|
)
|
|||
Weighted average number of Class A common shares outstanding:
|
||||||||
Basic
|
13,989,820
|
4,375,614
|
||||||
Diluted
|
13,989,820
|
4,375,614
|
Three Months Ended
|
||||||||
March 31, 2024
|
March 31, 2023
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
5,842,289
|
$
|
(46,660,562
|
)
|
|||
Adjustments to reconcile net income (loss) to cash flows from operating activities:
|
||||||||
Depreciation and amortization
|
9,514,654
|
7,722,841
|
||||||
Accretion of asset retirement obligation
|
13,743
|
13,051
|
||||||
Loss on disposal of fixed assets
|
—
|
91,086
|
||||||
Realized gain on sale of miner assets
|
(36,012
|
)
|
—
|
|||||
Change in value of accounts receivable
|
213,040
|
1,002,750
|
||||||
Amortization of debt issuance costs
|
51,473
|
34,517
|
||||||
Stock-based compensation
|
1,939,120
|
2,449,324
|
||||||
Loss on debt extinguishment
|
—
|
28,960,947
|
||||||
Changes in fair value of warrant liabilities
|
(11,677,720
|
)
|
714,589
|
|||||
Other
|
199,844
|
(12,139
|
)
|
|||||
(Increase) decrease in digital currencies:
|
||||||||
Mining revenue
|
(25,114,221
|
)
|
(12,921,075
|
)
|
||||
Net proceeds from sale of digital currencies
|
28,387,631
|
12,286,573
|
||||||
Unrealized gain on digital currencies
|
(1,227
|
)
|
—
|
|||||
Impairments on digital currencies
|
—
|
71,477
|
||||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
(1,445,198
|
)
|
4,959,865
|
|||||
Prepaid insurance
|
1,395,842
|
1,336,037
|
||||||
Due from related parties
|
—
|
(68,436
|
)
|
|||||
Inventory
|
110,889
|
(229,175
|
)
|
|||||
Other assets
|
(1,092,745
|
)
|
(296,265
|
)
|
||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
(400,907
|
)
|
(1,390,895
|
)
|
||||
Due to related parties
|
(98,891
|
)
|
237,466
|
|||||
Accrued liabilities
|
(1,637,806
|
)
|
(1,518,296
|
)
|
||||
Other liabilities, including contract liabilities
|
(302,388
|
)
|
(125,146
|
)
|
||||
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
5,861,410
|
(3,341,466
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of property, plant and equipment
|
(244,605
|
)
|
(13,738
|
)
|
||||
Proceeds from sale of property, plant and equipment, including CIP
|
180,000
|
—
|
||||||
NET CASH FLOWS USED IN INVESTING ACTIVITIES
|
(64,605
|
)
|
(13,738
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayments of debt
|
(1,060,008
|
)
|
(1,836,925
|
)
|
||||
Repayments of financed insurance premiums
|
(1,413,803
|
)
|
(1,750,874
|
)
|
||||
Proceeds from exercise of warrants
|
—
|
273
|
||||||
NET CASH FLOWS USED IN FINANCING ACTIVITIES
|
(2,473,811
|
)
|
(3,587,526
|
)
|
||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
3,322,994
|
(6,942,730
|
)
|
|||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
4,214,613
|
13,296,703
|
||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
7,537,607
|
$
|
6,353,973
|
Three Months Ended
|
||||||||
(in thousands)
|
March 31, 2024
|
March 31, 2023
|
||||||
Net Income (Loss)—GAAP
|
$
|
5,842
|
$
|
(46,661
|
)
|
|||
Plus:
|
||||||||
Interest expense
|
2,263
|
2,384
|
||||||
Depreciation and amortization
|
9,515
|
7,723
|
||||||
Loss on debt extinguishment
|
—
|
28,961
|
||||||
Impairments on digital currencies
|
—
|
71
|
||||||
Non-recurring expenses1
|
837
|
682
|
||||||
Stock-based compensation
|
1,939
|
2,449
|
||||||
Loss on disposal of fixed assets
|
—
|
91
|
||||||
Realized gain on sale of miner assets
|
(36
|
)
|
—
|
|||||
Realized gain on sale of digital currencies2
|
—
|
(327
|
)
|
|||||
Changes in fair value of warrant liabilities
|
(11,678
|
)
|
715
|
|||||
Accretion of asset retirement obligation
|
14
|
13
|
||||||
Adjusted EBITDA—Non-GAAP
|
$
|
8,696
|
$
|
(3,898
|
)
|
T5SWP_U+4=6\'Z=>ZY&D6J2*PN8XUVJDBNRE0/08Q6
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Document and Entity Information |
May 02, 2024 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | May 02, 2024 |
Entity File Number | 001-40931 |
Entity Registrant Name | Stronghold Digital Mining, Inc. |
Entity Central Index Key | 0001856028 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 86-2759890 |
Entity Address, Address Line One | 595 Madison Avenue |
Entity Address, Address Line Two | 28th Floor |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10022 |
City Area Code | 845 |
Local Phone Number | 579-5992 |
Title of 12(b) Security | Class A common stock, par value $0.0001 per share |
Trading Symbol | SDIG |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
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