Stronghold Digital Mining, Inc. (NASDAQ:
SDIG) (“Stronghold”, the “Company”, or “we”) today
announced financial and operational results for the quarter ended
June 30, 2023, and provided an operational update:
Recent Operational and Financial Highlights
- Accelerated
hash rate guidance. We now expect to achieve hash rate
capacity of 4 EH/s by September 1, 2023, which is one month earlier
than our previous guidance and four months earlier than our
guidance provided on March 29, 2023.
- Procured
over 14,000 high-spec Bitcoin miners between April 2023 and July
2023. These miners provide aggregate hash rate capacity of
nearly 1.6 EH/s, and we expect that all will be energized by
September 1, 2023. Over 8,000 of the miners are wholly owned, and
6,000 of the miners are hosted as a part of the Canaan Bitcoin
Mining Agreement, where Stronghold participates in the Bitcoin
mining and curtailment economics.
- First half
of 2023 fixed costs down ~$15 million, or ~34%, compared to first
half of 2022. Fixed costs include operations &
maintenance expense and general & administrative expense,
excluding stock-based compensation.
- Stronghold mined
626 Bitcoin during the second quarter of 2023, which represents
approximately 43% growth compared to the fourth quarter of 2022 and
1% sequential growth compared to the first quarter of 2023, despite
Bitcoin network hash rate growth of 39% and 23% during the same
periods, respectively.
- The Company
generated revenue of $18.2 million, net loss of $11.7 million, and
non-GAAP Adjusted EBITDA loss of $2.6 million in the second quarter
of 2023. Revenue comprised $13.8 million from cryptocurrency
self-mining, $3.1 million from cryptocurrency hosting, $0.7 million
from the sale of energy, and $0.6 million from capacity
sales.1
1 See Non-GAAP Reconciliations.
Management Commentary
“We expect to have 4 EH/s of installed hash rate
capacity at our Panther Creek and Scrubgrass data centers in the
coming weeks,” said Greg Beard, the chairman and chief executive
officer of Stronghold. “This represents a significant milestone for
the Company, and we believe that we are well positioned to grow
revenue and cash flow and create equity value going forward. We
continue to expect that our vertically integrated business model,
with wholly owned power plants and data centers, will demonstrate
its advantages going into the Bitcoin halving that is projected to
take place in April 2024.
“Additionally, we think it is critically
important for the industry to focus on capital efficiency, or the
productivity of capital deployed, and returns on capital deployed.
We believe that the payback periods for all Stronghold miner
purchases in 2023, which we have intentionally limited to purchases
of high-spec MicroBT WhatsMiner M50 and M50S and Canaan Avalon
A1346 Bitcoin miners, will be approximately one year, if not
faster. This payback would mean that the miners generate enough
cash flow to fully recover the invested capital in 12 months. This
compares favorably to our team’s current assessment of the paybacks
on other popular, higher-efficiency miners, which, given a
materially higher price per terahash, exhibit paybacks that are
over 35% longer. We believe that, at current prices, MicroBT
WhatsMiner M50 and M50S and Canaan Avalon A1346 miners present more
compelling value, and we have invested accordingly after
significant research and analysis.
“Lastly, with recent miner purchases and the expansion of our
Canaan Bitcoin Mining Agreement, we will have more Bitcoin miners
than we can plug in at the data centers at our Panther Creek and
Scrubgrass plants. As we have disclosed, we are currently
evaluating opportunities to deploy our approximately 25 megawatts
of end-to-end data center equipment at a prospective third site,
and we expect to deploy any excess miners at this site. We look
forward to providing an update on this initiative by the end of the
third quarter of this year.”
Liquidity and Capital
Resources
As of June 30, 2023, and August 7, 2023, the
Company had approximately $6.5 million and $5.6 million,
respectively, of cash and cash equivalents and Bitcoin on its
balance sheet, which included 47 Bitcoin and 35 Bitcoin,
respectively. As of June 30, 2023, and August 7, 2023, the Company
had principal amount of outstanding indebtedness of approximately
$59 million. As of August 7, 2023, the Company had received net
proceeds of approximately $6.1 million from the sale of 798,944
shares of its Class A common stock under the at-the-market offering
agreement with H.C. Wainwright & Co., LLC, of which
approximately $5.3 million, or 87%, was used for miner
purchases.
Conference Call
Stronghold will host a conference call today,
August 10, 2023, at 10:00 a.m. Eastern Time (7:00 a.m. Pacific
Time) with an accompanying presentation to discuss these results. A
question-and-answer session will follow management's
presentation.
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 2023 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 and Panther Creek plants, 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. 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;
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; and legislative or regulatory
changes, and liability under, or any future inability to comply
with, existing or future energy regulations or requirements. More
information on these risks and other potential factors that could
affect our financial results is included in our filings with the
Securities and Exchange Commission, 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 April 3, 2023, and in our subsequently filed
Quarterly Reports on Form 10-Q. 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, 2023 |
|
December 31, 2022 |
ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
5,104,192 |
|
|
$ |
13,296,703 |
|
Digital currencies |
|
1,429,653 |
|
|
|
109,827 |
|
Accounts receivable |
|
2,338,099 |
|
|
|
10,837,126 |
|
Inventory |
|
4,168,189 |
|
|
|
4,471,657 |
|
Prepaid insurance |
|
3,311,214 |
|
|
|
5,471,498 |
|
Due from related parties |
|
69,947 |
|
|
|
73,122 |
|
Other current assets |
|
1,047,731 |
|
|
|
1,381,737 |
|
Total current assets |
|
17,469,025 |
|
|
|
35,641,670 |
|
Equipment deposits |
|
5,422,338 |
|
|
|
10,081,307 |
|
Property, plant and equipment, net |
|
160,398,999 |
|
|
|
167,204,681 |
|
Operating lease right-of-use assets |
|
1,722,900 |
|
|
|
1,719,037 |
|
Land |
|
1,748,440 |
|
|
|
1,748,440 |
|
Road bond |
|
211,958 |
|
|
|
211,958 |
|
Security deposits |
|
348,888 |
|
|
|
348,888 |
|
TOTAL
ASSETS |
$ |
187,322,548 |
|
|
$ |
216,955,981 |
|
LIABILITIES: |
|
|
|
Accounts payable |
$ |
16,158,911 |
|
|
$ |
27,540,317 |
|
Accrued liabilities |
|
8,630,165 |
|
|
|
8,893,248 |
|
Financed insurance premiums |
|
1,993,120 |
|
|
|
4,587,935 |
|
Current portion of long-term debt, net of discounts and issuance
fees |
|
796,668 |
|
|
|
17,422,546 |
|
Current portion of operating lease liabilities |
|
724,539 |
|
|
|
593,063 |
|
Due to related parties |
|
910,376 |
|
|
|
1,375,049 |
|
Total current liabilities |
|
29,213,779 |
|
|
|
60,412,158 |
|
Asset retirement obligation |
|
1,049,626 |
|
|
|
1,023,524 |
|
Warrant liabilities |
|
5,253,582 |
|
|
|
2,131,959 |
|
Long-term debt, net of discounts and issuance fees |
|
57,965,960 |
|
|
|
57,027,118 |
|
Long-term operating lease liabilities |
|
1,095,116 |
|
|
|
1,230,001 |
|
Contract liabilities |
|
456,582 |
|
|
|
351,490 |
|
Total liabilities |
|
95,034,645 |
|
|
|
122,176,250 |
|
COMMITMENTS AND
CONTINGENCIES (NOTE 10) |
|
|
|
REDEEMABLE COMMON
STOCK: |
|
|
|
Common Stock – Class V; $0.0001 par value; 34,560,000 shares
authorized; 2,405,760 and 2,605,760 shares issued and outstanding
as of June 30, 2023, and December 31, 2022,
respectively. |
|
9,947,656 |
|
|
|
11,754,587 |
|
Total redeemable common stock |
|
9,947,656 |
|
|
|
11,754,587 |
|
STOCKHOLDERS’ EQUITY
(DEFICIT): |
|
|
|
Common Stock – Class A; $0.0001 par value; 685,440,000 shares
authorized; 5,976,099 and 3,171,022 shares issued and outstanding
as of June 30, 2023, and December 31, 2022,
respectively. |
|
606 |
|
|
|
317 |
|
Series C convertible preferred stock; $0.0001 par value; 23,102
shares authorized; 21,572 and 0 shares issued and outstanding as of
June 30, 2023, and December 31, 2022, respectively. |
|
2 |
|
|
|
— |
|
Accumulated deficits |
|
(298,199,062 |
) |
|
|
(240,443,302 |
) |
Additional paid-in capital |
|
380,538,701 |
|
|
|
323,468,129 |
|
Total stockholders' equity |
|
82,340,247 |
|
|
|
83,025,144 |
|
Total redeemable common stock and stockholders' equity |
|
92,287,903 |
|
|
|
94,779,731 |
|
TOTAL LIABILITIES,
REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY |
$ |
187,322,548 |
|
|
$ |
216,955,981 |
|
STRONGHOLD DIGITAL MINING, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(UNAUDITED) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
OPERATING
REVENUES: |
|
|
|
|
|
|
|
Cryptocurrency mining |
$ |
13,782,798 |
|
|
$ |
20,227,536 |
|
|
$ |
25,080,096 |
|
|
$ |
38,431,729 |
|
Energy |
|
740,793 |
|
|
|
7,691,226 |
|
|
|
3,471,779 |
|
|
|
16,735,618 |
|
Cryptocurrency hosting |
|
3,079,701 |
|
|
|
121,172 |
|
|
|
5,405,697 |
|
|
|
189,048 |
|
Capacity |
|
582,557 |
|
|
|
1,668,001 |
|
|
|
1,442,067 |
|
|
|
3,712,428 |
|
Other |
|
47,892 |
|
|
|
32,008 |
|
|
|
100,317 |
|
|
|
52,770 |
|
Total operating revenues |
|
18,233,741 |
|
|
|
29,739,943 |
|
|
|
35,499,956 |
|
|
|
59,121,593 |
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
Fuel |
|
6,291,501 |
|
|
|
9,188,165 |
|
|
|
13,705,515 |
|
|
|
19,208,150 |
|
Operations and maintenance |
|
8,804,097 |
|
|
|
16,586,756 |
|
|
|
17,245,020 |
|
|
|
27,921,089 |
|
General and administrative |
|
10,077,738 |
|
|
|
10,903,876 |
|
|
|
18,546,493 |
|
|
|
21,514,079 |
|
Depreciation and amortization |
|
8,634,967 |
|
|
|
12,667,300 |
|
|
|
16,357,808 |
|
|
|
24,986,881 |
|
Loss on disposal of fixed assets |
|
17,281 |
|
|
|
1,724,642 |
|
|
|
108,367 |
|
|
|
1,769,600 |
|
Realized gain on sale of digital currencies |
|
(266,665 |
) |
|
|
— |
|
|
|
(593,433 |
) |
|
|
(751,110 |
) |
Realized loss on sale of miner assets |
|
— |
|
|
|
8,012,248 |
|
|
|
— |
|
|
|
8,012,248 |
|
Impairments on miner assets |
|
— |
|
|
|
4,990,000 |
|
|
|
— |
|
|
|
4,990,000 |
|
Impairments on digital currencies |
|
254,353 |
|
|
|
5,205,045 |
|
|
|
325,830 |
|
|
|
7,711,217 |
|
Impairments on equipment deposits |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,228,742 |
|
Total operating expenses |
|
33,813,272 |
|
|
|
69,278,032 |
|
|
|
65,695,600 |
|
|
|
127,590,896 |
|
NET OPERATING
LOSS |
|
(15,579,531 |
) |
|
|
(39,538,089 |
) |
|
|
(30,195,644 |
) |
|
|
(68,469,303 |
) |
OTHER INCOME
(EXPENSE): |
|
|
|
|
|
|
|
Interest expense |
|
(2,603,478 |
) |
|
|
(4,508,782 |
) |
|
|
(4,987,391 |
) |
|
|
(7,420,235 |
) |
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
(28,960,947 |
) |
|
|
— |
|
Gain on extinguishment of PPP loan |
|
— |
|
|
|
841,670 |
|
|
|
— |
|
|
|
841,670 |
|
Changes in fair value of warrant liabilities |
|
6,475,880 |
|
|
|
— |
|
|
|
5,761,291 |
|
|
|
— |
|
Changes in fair value of forward sale derivative |
|
— |
|
|
|
3,919,388 |
|
|
|
— |
|
|
|
3,435,639 |
|
Changes in fair value of convertible note |
|
— |
|
|
|
(962,761 |
) |
|
|
— |
|
|
|
(962,761 |
) |
Other |
|
15,000 |
|
|
|
10,000 |
|
|
|
30,000 |
|
|
|
30,000 |
|
Total other income (expense) |
|
3,887,402 |
|
|
|
(700,485 |
) |
|
|
(28,157,047 |
) |
|
|
(4,075,687 |
) |
NET LOSS |
$ |
(11,692,129 |
) |
|
$ |
(40,238,574 |
) |
|
$ |
(58,352,691 |
) |
|
$ |
(72,544,990 |
) |
NET LOSS attributable
to noncontrolling interest |
|
(3,355,873 |
) |
|
|
(23,537,554 |
) |
|
|
(21,475,004 |
) |
|
|
(42,435,192 |
) |
NET LOSS attributable
to Stronghold Digital Mining, Inc. |
$ |
(8,336,256 |
) |
|
$ |
(16,701,020 |
) |
|
$ |
(36,877,687 |
) |
|
$ |
(30,109,798 |
) |
NET LOSS attributable
to Class A common shareholders: |
|
|
|
|
|
|
|
Basic |
$ |
(1.35 |
) |
|
$ |
(8.21 |
) |
|
$ |
(6.99 |
) |
|
$ |
(14.85 |
) |
Diluted |
$ |
(1.35 |
) |
|
$ |
(8.21 |
) |
|
$ |
(6.99 |
) |
|
$ |
(14.85 |
) |
Weighted average
number of Class A common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
6,163,450 |
|
|
|
2,034,107 |
|
|
|
5,274,471 |
|
|
|
2,027,468 |
|
Diluted |
|
6,163,450 |
|
|
|
2,034,107 |
|
|
|
5,274,471 |
|
|
|
2,027,468 |
|
STRONGHOLD DIGITAL MINING, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(UNAUDITED) |
|
|
Six Months Ended, |
|
June 30, 2023 |
|
June 30, 2022 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(58,352,691 |
) |
|
$ |
(72,544,990 |
) |
Adjustments to reconcile net loss to cash flows from operating
activities: |
|
|
|
Depreciation and amortization |
|
16,357,808 |
|
|
|
24,986,881 |
|
Accretion of asset retirement obligation |
|
26,102 |
|
|
|
12,169 |
|
Gain on extinguishment of PPP loan |
|
— |
|
|
|
(841,670 |
) |
Loss on disposal of fixed assets |
|
108,367 |
|
|
|
1,769,600 |
|
Realized loss on sale of miner assets |
|
— |
|
|
|
8,012,248 |
|
Change in value of accounts receivable |
|
1,142,750 |
|
|
|
— |
|
Amortization of debt issuance costs |
|
109,620 |
|
|
|
2,060,806 |
|
Stock-based compensation |
|
6,816,048 |
|
|
|
5,745,625 |
|
Loss on debt extinguishment |
|
28,960,947 |
|
|
|
— |
|
Impairments on equipment deposits |
|
— |
|
|
|
12,228,742 |
|
Impairments on miner assets |
|
— |
|
|
|
4,990,000 |
|
Changes in fair value of warrant liabilities |
|
(5,761,291 |
) |
|
|
— |
|
Changes in fair value of forward sale derivative |
|
— |
|
|
|
(3,435,639 |
) |
Forward sale contract prepayment |
|
— |
|
|
|
970,000 |
|
Changes in fair value of convertible note |
|
— |
|
|
|
962,761 |
|
Other |
|
(532,880 |
) |
|
|
— |
|
(Increase) decrease in digital currencies: |
|
|
|
Mining revenue |
|
(28,709,950 |
) |
|
|
(38,431,729 |
) |
Net proceeds from sales of digital currencies |
|
27,064,294 |
|
|
|
36,006,390 |
|
Impairments on digital currencies |
|
325,830 |
|
|
|
7,711,217 |
|
(Increase) decrease in assets: |
|
|
|
Accounts receivable |
|
7,140,368 |
|
|
|
260,136 |
|
Prepaid insurance |
|
542,828 |
|
|
|
3,945,290 |
|
Due from related parties |
|
(64,276 |
) |
|
|
(848,150 |
) |
Inventory |
|
303,468 |
|
|
|
(233,279 |
) |
Other assets |
|
306,998 |
|
|
|
(1,072,267 |
) |
Increase (decrease) in liabilities: |
|
|
|
Accounts payable |
|
(145,649 |
) |
|
|
(4,763,351 |
) |
Due to related parties |
|
219,778 |
|
|
|
543,639 |
|
Accrued liabilities |
|
27,326 |
|
|
|
4,393,075 |
|
Other liabilities, including contract liabilities |
|
(78,849 |
) |
|
|
(55,742 |
) |
NET CASH FLOWS USED IN
OPERATING ACTIVITIES |
|
(4,193,054 |
) |
|
|
(7,628,238 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchases of property, plant and equipment |
|
(10,581,332 |
) |
|
|
(57,074,647 |
) |
Proceeds from sale of equipment deposits |
|
— |
|
|
|
13,844,780 |
|
Equipment purchase deposits - net of future commitments |
|
— |
|
|
|
(12,073,928 |
) |
NET CASH FLOWS USED IN
INVESTING ACTIVITIES |
|
(10,581,332 |
) |
|
|
(55,303,795 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Repayments of debt |
|
(2,446,953 |
) |
|
|
(24,022,738 |
) |
Repayments of financed insurance premiums |
|
(651,495 |
) |
|
|
(3,906,462 |
) |
Proceeds from debt, net of issuance costs paid in cash |
|
(147,385 |
) |
|
|
92,058,299 |
|
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
PROVIDED BY FINANCING ACTIVITIES |
|
6,581,875 |
|
|
|
64,129,099 |
|
NET (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS |
|
(8,192,511 |
) |
|
|
1,197,066 |
|
CASH AND CASH
EQUIVALENTS - BEGINNING OF PERIOD |
|
13,296,703 |
|
|
|
31,790,115 |
|
CASH AND CASH
EQUIVALENTS - END OF PERIOD |
$ |
5,104,192 |
|
|
$ |
32,987,181 |
|
|
Use and Reconciliation of Non-GAAP
Financial Measures
This press release and our related earnings call
contain 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, impairments on digital currencies, realized
gains and losses on the sale of long-term assets, expenses related
to stock-based compensation, gains or losses on derivative
contracts, gains or losses on extinguishment of debt, realized
gains or losses on sale of digital currencies, or changes in fair
value of warrant liabilities in the period presented. See
reconciliation below.
Our board of directors 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, and 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 the generally accepted accounting principles (“GAAP”) in the
United States. 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 and should be read in conjunction
with the financial statements furnished in our Form 10-Q for the
quarter ended June 30, 2023, expected to be filed on or prior to
August 11, 2023. 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 ADJUSTED EBITDA |
|
|
Three Months Ended |
|
Six Months Ended |
(in thousands) |
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Net Loss (GAAP) |
$ |
(11,692 |
) |
|
$ |
(40,239 |
) |
|
$ |
(58,353 |
) |
|
$ |
(72,545 |
) |
Plus: |
|
|
|
|
|
|
|
Interest expense |
|
2,603 |
|
|
|
4,509 |
|
|
|
4,987 |
|
|
|
7,420 |
|
Depreciation and amortization |
|
8,635 |
|
|
|
12,667 |
|
|
|
16,358 |
|
|
|
24,987 |
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
28,961 |
|
|
|
— |
|
Impairments on equipment deposits |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,229 |
|
Impairments on miner assets |
|
— |
|
|
|
4,990 |
|
|
|
— |
|
|
|
4,990 |
|
Impairments on digital currencies |
|
254 |
|
|
|
5,205 |
|
|
|
326 |
|
|
|
7,711 |
|
Non-recurring (benefits) expenses1 |
|
(46 |
) |
|
|
2,799 |
|
|
|
636 |
|
|
|
6,563 |
|
Stock-based compensation |
|
4,367 |
|
|
|
3,153 |
|
|
|
6,816 |
|
|
|
5,746 |
|
Loss on disposal of fixed assets |
|
17 |
|
|
|
1,725 |
|
|
|
108 |
|
|
|
1,770 |
|
Realized loss on sale of miner assets |
|
— |
|
|
|
8,012 |
|
|
|
— |
|
|
|
8,012 |
|
Realized gain on sale of digital currencies |
|
(267 |
) |
|
|
— |
|
|
|
(593 |
) |
|
|
(751 |
) |
Changes in fair value of forward sale derivative |
|
— |
|
|
|
(3,919 |
) |
|
|
— |
|
|
|
(3,436 |
) |
Gain on extinguishment of PPP loan |
|
— |
|
|
|
(842 |
) |
|
|
— |
|
|
|
(842 |
) |
Changes in fair value of convertible note |
|
— |
|
|
|
963 |
|
|
|
— |
|
|
|
963 |
|
Changes in fair value of warrant liabilities |
|
(6,476 |
) |
|
|
— |
|
|
|
(5,761 |
) |
|
|
— |
|
Accretion of asset retirement obligation |
|
13 |
|
|
|
— |
|
|
|
26 |
|
|
|
— |
|
Adjusted EBITDA (Non-GAAP) |
$ |
(2,591 |
) |
|
$ |
(977 |
) |
|
$ |
(6,489 |
) |
|
$ |
2,817 |
|
1 Includes the following non-recurring expenses:
out-of-the-ordinary major repairs and upgrades to the power plant
and other one-time items.
Investor Contact:
Matt Glover or Alex KovtunGateway Group, Inc.
SDIG@gateway-grp.com
1-949-574-3860
Media Contact:
contact@strongholddigitalmining.com
Grafico Azioni Stronghold Digital Mining (NASDAQ:SDIG)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Stronghold Digital Mining (NASDAQ:SDIG)
Storico
Da Set 2023 a Set 2024