• |
Accelerating hash rate guidance - we now expect to achieve hash rate capacity of approximately 4 EH/s by the end of the third quarter of 2023, which would beat our prior guidance of year-end 2023
|
• |
Completed $10 million private placement and subsequent purchase of 5,000 MicroBT Whatsminer M50 Bitcoin miners, adding ~600 PH/s of hash rate capacity - $9 million invested by an institutional investor and $1 million invested by the Company's chairman and chief executive officer, Greg Beard
|
• |
Signed "Canaan Bitcoin Mining Agreement", adding ~400 PH/s of hash rate capacity - two-year hosting agreement with Cantaloupe Digital LLC, a subsidiary of Canaan, Inc. ("Canaan"), whereby Stronghold will operate 4,000 Bitcoin miners supplied by Canaan at the Company's wholly owned Panther Creek plant
|
• |
Achieved objective of $45 to $50 per megawatt hour ("MWh") net cost of power in March 2023 and expects that the net cost of power will average between $40 and $50 per MWh over the course of 2023, which the Company estimates corresponds to a cost per Bitcoin of approximately $10,000 to $14,000, assuming latest-generation miners and a network hash rate of 320 EH/s
|
• |
Previously announced substantial deleveraging efforts have resulted in approximately $59.6 million of principal amount of debt outstanding and approximately $51.5 million of net debt (calculated as the principal amount of debt outstanding less cash and Bitcoin) as of May 8, 2023
|
• |
First quarter 2023 revenue of $17.3 million, net loss of $46.7 million, and non-GAAP Adjusted EBITDA loss of $3.9 million (see reconciliation of non-GAAP financial measures)
|
March 31, 2023
|
December 31,
2022
| |||||||
ASSETS:
| ||||||||
Cash and cash equivalents
|
$
|
6,353,973
|
$
|
13,296,703
| ||||
Digital currencies
|
672,852
|
109,827
| ||||||
Accounts receivable
|
4,742,092
|
10,837,126
| ||||||
Inventory
|
4,700,832
|
4,471,657
| ||||||
Prepaid insurance
|
3,541,898
|
4,877,935
| ||||||
Due from related parties
|
74,107
|
73,122
| ||||||
Other current assets
|
1,354,955
|
1,975,300
| ||||||
Total current assets
|
21,440,709
|
35,641,670
| ||||||
Equipment deposits
|
5,422,338
|
10,081,307
| ||||||
Property, plant and equipment, net
|
158,366,684
|
167,204,681
| ||||||
Operating lease right-of-use assets
|
1,581,400
|
1,719,037
| ||||||
Land
|
1,748,440
|
1,748,440
| ||||||
Road bond
|
211,958
|
211,958
| ||||||
Security deposits
|
348,888
|
348,888
| ||||||
TOTAL ASSETS
|
$
|
189,120,417
|
$
|
216,955,981
| ||||
LIABILITIES:
| ||||||||
Accounts payable
|
$
|
14,847,939
|
$
|
27,540,317
| ||||
Accrued liabilities
|
7,112,648
|
8,893,248
| ||||||
Financed insurance premiums
|
2,806,538
|
4,587,935
| ||||||
Current portion of long-term debt, net of discounts and issuance fees
|
995,145
|
17,422,546
| ||||||
Current portion of operating lease liabilities
|
613,657
|
593,063
| ||||||
Due to related parties
|
1,612,515
|
1,375,049
| ||||||
Total current liabilities
|
27,988,442
|
60,412,158
| ||||||
Asset retirement obligation
|
1,036,575
|
1,023,524
| ||||||
Warrant liabilities
|
2,846,548
|
2,131,959
| ||||||
Long-term debt, net of discounts and issuance fees
|
58,208,207
|
57,027,118
| ||||||
Long-term operating lease liabilities
|
1,067,654
|
1,230,001
| ||||||
Contract liabilities
|
277,397
|
351,490
| ||||||
Total liabilities
|
91,424,823
|
122,176,250
| ||||||
COMMITMENTS AND CONTINGENCIES
| ||||||||
REDEEMABLE COMMON STOCK:
| ||||||||
Common Stock - Class V; $0.0001 par value; 34,560,000 shares authorized; 26,057,600 and 26,057,600 shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively.
|
15,499,219
|
11,754,587
| ||||||
Total redeemable common stock
|
15,499,219
|
11,754,587
| ||||||
STOCKHOLDERS' EQUITY (DEFICIT):
| ||||||||
Common Stock - Class A; $0.0001 par value; 685,440,000 shares authorized; 41,046,186 and 31,710,217 shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively.
|
4,105
|
3,171
| ||||||
Series C convertible preferred stock; $0.0001 par value; 23,102 shares authorized; 21,572 and 0 shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively.
|
2
|
-
| ||||||
Accumulated deficits
|
(290,848,496
|
)
|
(240,443,302
|
)
| ||||
Additional paid-in capital
|
373,040,764
|
323,465,275
| ||||||
Total stockholders' equity
|
82,196,375
|
83,025,144
| ||||||
Total redeemable common stock and stockholders' equity
|
97,695,594
|
94,779,731
| ||||||
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY
|
$
|
189,120,417
|
$
|
216,955,981
|
Three Months Ended
| ||||||||
March 31, 2023
|
March 31, 2022
| |||||||
OPERATING REVENUES:
| ||||||||
Cryptocurrency mining
|
$
|
11,297,298
|
$
|
18,204,193
| ||||
Energy
|
2,730,986
|
9,044,392
| ||||||
Cryptocurrency hosting
|
2,325,996
|
67,876
| ||||||
Capacity
|
859,510
|
2,044,427
| ||||||
Other
|
52,425
|
20,762
| ||||||
Total operating revenues
|
17,266,215
|
29,381,650
| ||||||
OPERATING EXPENSES:
| ||||||||
Fuel
|
7,414,014
|
10,019,985
| ||||||
Operations and maintenance
|
8,440,923
|
10,520,305
| ||||||
General and administrative
|
8,468,755
|
11,424,231
| ||||||
Depreciation and amortization
|
7,722,841
|
12,319,581
| ||||||
Loss on disposal of fixed assets
|
91,086
|
44,958
| ||||||
Realized gain on sale of digital currencies
|
(326,768
|
)
|
(751,110
|
)
| ||||
Impairments on digital currencies
|
71,477
|
2,506,172
| ||||||
Impairments on equipment deposits
|
-
|
12,228,742
| ||||||
Total operating expenses
|
31,882,328
|
58,312,864
| ||||||
NET OPERATING LOSS
|
(14,616,113
|
)
|
(28,931,214
|
)
| ||||
OTHER INCOME (EXPENSE):
| ||||||||
Interest expense
|
(2,383,913
|
)
|
(2,911,453
|
)
| ||||
Loss on debt extinguishment
|
(28,960,947
|
)
|
-
| |||||
Changes in fair value of warrant liabilities
|
(714,589
|
)
|
-
| |||||
Changes in fair value of forward sale derivative
|
-
|
(483,749
|
)
| |||||
Other
|
15,000
|
20,000
| ||||||
Total other income (expense)
|
(32,044,449
|
)
|
(3,375,202
|
)
| ||||
NET LOSS
|
$
|
(46,660,562
|
)
|
$
|
(32,306,416
|
)
| ||
NET LOSS attributable to noncontrolling interest
|
(18,119,131
|
)
|
(18,897,638
|
)
| ||||
NET LOSS attributable to Stronghold Digital Mining, Inc.
|
$
|
(28,541,431
|
)
|
$
|
(13,408,778
|
)
| ||
NET LOSS attributable to Class A common shareholders:
| ||||||||
Basic
|
$
|
(0.65
|
)
|
$
|
(0.66
|
)
| ||
Diluted
|
$
|
(0.65
|
)
|
$
|
(0.66
|
)
| ||
Weighted average number of Class A common shares outstanding
| ||||||||
Basic
|
43,756,137
|
20,206,103
| ||||||
Diluted
|
43,756,137
|
20,206,103
|
Three Months Ended
| ||||||||
March 31, 2023
|
March 31, 2022
| |||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
| ||||||||
Net loss
|
$
|
(46,660,562
|
)
|
$
|
(32,306,416
|
)
| ||
Adjustments to reconcile net loss to cash flows from operating activities:
| ||||||||
Depreciation and amortization
|
7,722,841
|
12,319,581
| ||||||
Accretion of asset retirement obligation
|
13,051
|
6,084
| ||||||
Loss on disposal of fixed assets
|
91,086
|
44,958
| ||||||
Change in value of accounts receivable
|
1,002,750
|
-
| ||||||
Amortization of debt issuance costs
|
34,517
|
881,463
| ||||||
Stock-based compensation
|
2,449,324
|
2,592,995
| ||||||
Loss on debt extinguishment
|
28,960,947
|
-
| ||||||
Impairments on equipment deposits
|
-
|
12,228,742
| ||||||
Changes in fair value of warrant liabilities
|
714,589
|
-
| ||||||
Changes in fair value of forward sale derivative
|
-
|
483,749
| ||||||
Forward sale contract prepayment
|
-
|
970,000
| ||||||
Other
|
(12,139
|
)
|
-
| |||||
(Increase) decrease in digital currencies:
| ||||||||
Mining revenue
|
(12,921,075
|
)
|
(18,204,193
|
)
| ||||
Net proceeds from sales of digital currencies
|
12,286,573
|
12,247,300
| ||||||
Impairments on digital currencies
|
71,477
|
2,506,172
| ||||||
(Increase) decrease in assets:
| ||||||||
Accounts receivable
|
4,959,865
|
410,525
| ||||||
Prepaid insurance
|
1,336,037
|
1,852,595
| ||||||
Due from related parties
|
(68,436
|
)
|
(864,624
|
)
| ||||
Inventory
|
(229,175
|
)
|
(179,774
|
)
| ||||
Other assets
|
(296,265
|
)
|
(37,242
|
)
| ||||
Increase (decrease) in liabilities:
| ||||||||
Accounts payable
|
(1,390,895
|
)
|
(410,917
|
)
| ||||
Due to related parties
|
237,466
|
68,647
| ||||||
Accrued liabilities
|
(1,518,296
|
)
|
1,227,709
| |||||
Other liabilities, including contract liabilities
|
(125,146
|
)
|
(55,742
|
)
| ||||
NET CASH FLOWS USED IN OPERATING ACTIVITIES
|
(3,341,466
|
)
|
(4,218,388
|
)
| ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
| ||||||||
Purchases of property, plant and equipment
|
(13,738
|
)
|
(38,157,218
|
)
| ||||
Equipment purchase deposits - net of future commitments
|
-
|
(6,482,000
|
)
| |||||
NET CASH FLOWS USED IN INVESTING ACTIVITIES
|
(13,738
|
)
|
(44,639,218
|
)
| ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
| ||||||||
Repayments of debt
|
(1,836,925
|
)
|
(9,290,668
|
)
| ||||
Repayments of financed insurance premiums
|
(1,750,874
|
)
|
(1,832,149
|
)
| ||||
Proceeds from debt, net of issuance costs paid in cash
|
-
|
53,671,001
| ||||||
Proceeds from exercise of warrants
|
273
|
-
| ||||||
NET CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES
|
(3,587,526
|
)
|
42,548,184
| |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(6,942,730
|
)
|
(6,309,422
|
)
| ||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
13,296,703
|
31,790,115
| ||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
6,353,973
|
$
|
25,480,693
|
Three Months Ended
| ||||||||
(in thousands)
|
March 31,
2023
|
March 31,
2022
| ||||||
Net Income (Loss) (GAAP)
|
$
|
(46,661
|
)
|
$
|
(32,306
|
)
| ||
Plus:
| ||||||||
Interest expense
|
2,384
|
2,911
| ||||||
Depreciation and amortization
|
7,723
|
12,320
| ||||||
Loss on debt extinguishment
|
28,961
|
-
| ||||||
Impairments on equipment deposits
|
-
|
12,229
| ||||||
Impairments on digital currencies
|
71
|
2,506
| ||||||
One-time non-recurring expenses1 |
682
|
3,765
| ||||||
Stock-based compensation
|
2,449
|
2,593
| ||||||
Loss on disposal of fixed assets
|
91
|
45
| ||||||
Realized gain on sale of digital currencies
|
(327
|
)
|
(751
|
)
| ||||
Changes in fair value of forward sale derivative
|
-
|
484
| ||||||
Changes in fair value of warrant liabilities
|
715
|
-
| ||||||
Accretion of asset retirement obligation
|
13
|
-
| ||||||
Adjusted EBITDA (Non-GAAP)
|
$
|
(3,898
|
)
|
$
|
3,795
|
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Disclaimer
Stronghold Digital Mining Inc. published this content on 11 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 May 2023 11:33:03 UTC.