COVER
COVER - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 30, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-40931 | |
Entity Registrant Name | Stronghold Digital Mining, Inc. | |
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 | 29th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | 212 | |
Local Phone Number | 967-5294 | |
Title of 12(b) Security | Class A common stock | |
Trading Symbol | SDIG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001856028 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 20,016,067 | |
Common - Class V | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 28,209,600 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 41,434,410 | $ 303,187 |
Digital currencies | 3,228,698 | 228,087 |
Accounts receivable | 308,387 | 65,900 |
Due from related party | 0 | 302,973 |
Prepaid Insurance | 278,538 | 0 |
Inventory | 367,601 | 396,892 |
Other current assets | 3,779,663 | 65,831 |
Total Current Assets | 49,397,297 | 1,362,870 |
EQUIPMENT DEPOSITS | 85,624,852 | 0 |
PROPERTY, PLANT AND EQUIPMENT, NET | 40,114,787 | 7,814,199 |
LAND | 29,919 | 0 |
ROAD BOND | 185,245 | 185,245 |
TOTAL ASSETS | 175,352,100 | 9,362,314 |
CURRENT LIABILITIES | ||
Current portion of long-term debt-net of discounts/issuance fees | 31,251,305 | 449,447 |
Related-party notes | 0 | 2,024,250 |
Accounts payable | 29,620,242 | 8,479,187 |
Due to related parties | 735,618 | 698,338 |
Accrued liabilities | 3,833,191 | 828 |
Total Current Liabilities | 65,440,356 | 11,652,050 |
LONG-TERM LIABILITIES | ||
Asset retirement obligation | 474,933 | 446,128 |
Contract liabilities | 187,837 | 40,000 |
Economic Injury Disaster Loan | 0 | 150,000 |
Paycheck Protection Program Loan | 841,670 | 638,800 |
Warrants issued with conversions to redeemable preferred stock | 878,970 | 0 |
Long-term debt-net of discounts/issuance fees | 22,417,973 | 482,443 |
Total Long-Term Liabilities | 24,801,383 | 1,757,371 |
Total Liabilities | 90,241,739 | 13,409,421 |
MEZZANINE EQUITY | ||
Mezzanine equity | 339,286,236 | |
STOCKHOLDERS’ DEFICIENCY & PARTNERS’ DEFICIT | ||
General partners | 243,002,391 | (2,710,323) |
Limited partners | (1,336,784) | |
Series A redeemable and convertible preferred stock, $0.0001 par value, aggregate liquidation value $5,000,000. 576,000 issued and outstanding as of September 30, 2021 | 58 | |
Common Stock – Class A, $0.0001 par value; 238,000,000 shares authorized and 140,674 shares issued and outstanding | 14 | |
Accumulated deficits | (263,811,490) | |
Additional paid-in capital | 9,635,543 | |
Stockholders’ deficiency or partners’ deficit | (254,175,875) | |
Stockholders’ deficiency or partners’ deficit | (4,047,107) | |
Total | 85,110,361 | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND DEFICIENCY | 175,352,100 | $ 9,362,314 |
Series A redeemable and convertible preferred stock | ||
LONG-TERM LIABILITIES | ||
Warrants issued with conversions to redeemable preferred stock | 745,023 | |
MEZZANINE EQUITY | ||
Mezzanine equity | 78,041,113 | |
Series B redeemable and convertible preferred stock | ||
LONG-TERM LIABILITIES | ||
Warrants issued with conversions to redeemable preferred stock | 133,947 | |
MEZZANINE EQUITY | ||
Mezzanine equity | 18,242,733 | |
Common Stock - Class V | ||
MEZZANINE EQUITY | ||
Mezzanine equity | $ 243,002,390 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Sep. 30, 2021USD ($)$ / sharesshares |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
Preferred stock, aggregate liquidation value | $ | $ 5,000,000 |
Preferred stock, issued (in shares) | 576,000 |
Preferred stock, outstanding (in shares) | 576,000 |
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 |
Common stock, authorized (in shares) | 238,000,000 |
Common stock, issued (in shares) | 140,674 |
Common stock, outstanding (in shares) | 140,674 |
Series A redeemable and convertible preferred stock | |
Mezzanine equity, par value (in USD per share) | $ / shares | $ 0.0001 |
Mezzanine equity, aggregate liquidation value | $ | $ 85,000,000 |
Mezzanine equity, authorized (in shares) | 5,000,000 |
Mezzanine equity, issued (in shares) | 9,792,000 |
Mezzanine equity, outstanding (in shares) | 9,792,000 |
Series B redeemable and convertible preferred stock | |
Mezzanine equity, par value (in USD per share) | $ / shares | $ 0.0001 |
Mezzanine equity, aggregate liquidation value | $ | $ 20,000,006 |
Mezzanine equity, authorized (in shares) | 5,760,000 |
Mezzanine equity, issued (in shares) | 1,817,035 |
Mezzanine equity, outstanding (in shares) | 1,817,035 |
Common Stock - Class V | |
Mezzanine equity, par value (in USD per share) | $ / shares | $ 0.0001 |
Mezzanine equity, authorized (in shares) | 34,560,000 |
Mezzanine equity, issued (in shares) | 27,057,600 |
Mezzanine equity, outstanding (in shares) | 27,057,600 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
OPERATING REVENUES | |||||
Operating revenues | $ 6,019,713 | $ 960,022 | $ 13,906,315 | $ 3,128,313 | |
OPERATING EXPENSES | |||||
Fuel | 2,411,186 | 181,041 | 6,511,706 | 483,977 | |
Operations and maintenance | 2,835,315 | 997,169 | 6,040,173 | 2,660,536 | |
General and administrative | 3,469,830 | 365,269 | 6,377,677 | 1,093,858 | |
Impairments on digital currencies | 91,040 | 0 | 466,286 | 0 | |
Depreciation and amortization | 1,158,374 | 139,150 | 2,463,549 | 422,603 | |
Total operating expenses | 9,965,745 | 1,682,629 | 21,859,391 | 4,660,974 | |
NET OPERATING INCOME/(LOSS) | (3,946,032) | (722,607) | (7,953,076) | (1,532,661) | |
OTHER INCOME (EXPENSE) | |||||
Interest Expense | (2,460,668) | (32,381) | (2,594,751) | (106,881) | |
Gain on extinguishment of PPP loan | 0 | 0 | 638,800 | 0 | |
Realized gain (loss) on sale of digital currencies | 0 | 3,662 | 149,858 | 4,941 | |
Changes in fair value of warrant liabilities | 92,979 | 0 | (98,498) | 0 | |
Derivative contracts, net | 0 | 0 | 0 | 1,207,131 | |
Waste coal credits | 23,356 | 0 | 47,152 | 7,500 | |
Other | 10,336 | 68,952 | 48,521 | 96,210 | |
Total other income / (expense) | (2,333,997) | 40,233 | (1,808,918) | 1,208,901 | |
NET INCOME/(LOSS) | (6,280,029) | (682,374) | (9,761,994) | (323,760) | |
NET INCOME/(LOSS) - attributable to non-controlling interest | (4,328,460) | (6,730,940) | |||
Net loss attributable to Class A common shareholders | $ (1,951,569) | (682,374) | $ (3,031,054) | (323,760) | |
NET LOSS attributable to Class A Common Shares | |||||
Basic (in USD per share) | [1] | $ (6.05) | $ (17.05) | ||
Diluted (in USD per share) | [1] | $ (6.05) | $ (17.05) | ||
Class A Common Shares Outstanding | |||||
Basic (in shares) | [1] | 322,342 | 173,532 | ||
Diluted (in shares) | [1] | 322,342 | 173,532 | ||
Energy | |||||
OPERATING REVENUES | |||||
Operating revenues | $ 2,388,752 | 119,945 | $ 5,875,574 | 704,604 | |
Capacity | |||||
OPERATING REVENUES | |||||
Operating revenues | 1,069,040 | 732,594 | 2,352,276 | 2,202,255 | |
Cryptocurrency hosting | |||||
OPERATING REVENUES | |||||
Operating revenues | 499,724 | 0 | 1,742,242 | 0 | |
Cryptocurrency mining | |||||
OPERATING REVENUES | |||||
Operating revenues | 2,060,523 | 141,226 | 3,901,426 | 221,454 | |
Other | |||||
OPERATING REVENUES | |||||
Operating revenues | $ 1,674 | $ (33,743) | $ 34,797 | $ 0 | |
[1] | Basic and diluted loss per share of Class A common stock is presented only for the period after the Company’s Reorganization Transactions. See Note 1 - Business Combinations for a description of the Reorganization Transactions. See Note 17 - Earnings (Loss) Per Share for the calculation of loss per share. |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ DEFICIT AND STOCKHOLDERS’ DEFICIENCY - USD ($) | Total | Limited Partners | General Partners | Redeemable Preferred Series A | Common A | Accumulated Deficit | Additional Paid-in Capital | Stock Subscriptions | [2] | |
Beginning balance at Dec. 31, 2019 | $ (2,780,961) | $ (833,875) | $ (1,947,086) | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Net losses | (323,760) | (97,128) | (226,632) | |||||||
Distributions | (591,119) | (591,119) | ||||||||
Ending balance at Sep. 30, 2020 | (3,695,840) | (931,003) | (2,764,837) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net losses | (323,760) | (97,128) | (226,632) | |||||||
Beginning balance at Jun. 30, 2020 | (2,810,446) | (726,291) | (2,084,155) | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Net losses | (682,374) | (204,712) | (477,662) | |||||||
Distributions | (203,020) | (203,020) | ||||||||
Ending balance at Sep. 30, 2020 | (3,695,840) | (931,003) | (2,764,837) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net losses | (682,374) | (204,712) | (477,662) | |||||||
Beginning balance at Dec. 31, 2020 | (4,047,107) | (1,336,784) | (2,710,323) | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Net losses | (238,948) | (71,687) | (167,261) | |||||||
Ending balance at Mar. 31, 2021 | (4,286,055) | (1,408,471) | (2,877,584) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net losses | (238,948) | (71,687) | (167,261) | |||||||
Beginning balance at Dec. 31, 2020 | (4,047,107) | (1,336,784) | (2,710,323) | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Net losses | (3,031,054) | |||||||||
Ending balance at Sep. 30, 2021 | 0 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net losses | (3,031,054) | |||||||||
Ending balance (in shares) at Sep. 30, 2021 | 576,000 | 140,674 | ||||||||
Ending balance at Sep. 30, 2021 | (254,175,875) | $ 58 | [1] | $ 14 | $ (263,811,490) | $ 9,635,543 | $ 0 | |||
Beginning balance at Mar. 31, 2021 | (4,286,055) | (1,408,471) | (2,877,584) | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Net losses | (2,959,369) | (2,959,369) | ||||||||
Contributions | 2,877,584 | 1,408,471 | 2,877,584 | |||||||
Ending balance at Sep. 30, 2021 | 0 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Aspen Scrubgrass Participant, LLC [“Olympus”] contribution | 0 | (1,408,471) | ||||||||
Buyout of Aspen Interest– refer to Note 19 (in shares) | 576,000 | |||||||||
Buyout of Aspen Interest– refer to Note 19 | (2,000,142) | $ 58 | [1] | (7,000,000) | 4,999,800 | |||||
Exchange of common units for Class A common shares (in shares) | 14,400 | |||||||||
Exchange of common units for Class A common shares | 2 | $ 2 | ||||||||
Common stock issued as part of debt financing – refer to Note 14 (in shares) | 54,392 | |||||||||
Common stock issued as part of debt financing – refer to Note 14 | 598,692 | $ 5 | 598,687 | |||||||
Common stock issued as part of debt financing – refer to Note 14 (in shares) | 71,882 | |||||||||
Common stock issued as part of debt financing – refer to Note 14 | 791,207 | $ 7 | 791,200 | |||||||
Warrants issued as part of debt financing – refer to Note 14 | 1,999,396 | 1,999,396 | ||||||||
Net losses | (2,959,369) | (2,959,369) | ||||||||
Maximum redemption right valuation - refer to Note 15 | (252,443,650) | (252,443,650) | ||||||||
Stock–based compensation – refer to Note 13 | 1,246,459 | 1,246,459 | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 576,000 | 140,674 | ||||||||
Ending balance at Sep. 30, 2021 | (254,175,875) | $ 58 | [1] | $ 14 | (263,811,490) | 9,635,543 | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning balance (in shares) | 576,000 | 140,674 | ||||||||
Net losses | (1,951,569) | (1,951,569) | ||||||||
Ending balance at Sep. 30, 2021 | $ 0 | $ 0 | ||||||||
Beginning balance at Jun. 30, 2021 | (174,921,113) | $ 58 | $ 14 | (182,190,312) | 8,659,015 | (1,389,888) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock issued as part of debt financing – refer to Note 14 | 598,686 | 598,686 | ||||||||
Common stock issued as part of debt financing – refer to Note 14 | 791,202 | 791,202 | ||||||||
Net losses | (1,951,569) | (1,951,569) | ||||||||
Maximum redemption right valuation - refer to Note 15 | (79,669,608) | (79,669,608) | ||||||||
Stock–based compensation – refer to Note 13 | 976,527 | 976,527 | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 576,000 | 140,674 | ||||||||
Ending balance at Sep. 30, 2021 | $ (254,175,875) | $ 58 | [1] | $ 14 | $ (263,811,490) | $ 9,635,543 | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning balance (in shares) | 576,000 | 140,674 | ||||||||
[1] | Refer to Note 19- Aspen Interest (“Olympus”) Buyout for further information | |||||||||
[2] | Refer to Note 14- Stock Issued Under Master Financing Agreements and Warrants for further information |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net Income/(loss) | $ (6,280,029) | $ (682,374) | $ (9,523,046) | $ (9,761,994) | $ (323,760) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
Depreciation and Amortization - PP&E | 1,158,374 | 139,150 | 2,463,549 | 422,603 | ||
Forgiveness of PPP loan | 0 | 0 | (638,800) | 0 | ||
Realized (gain) loss on sale of derivatives | 0 | 0 | 0 | (1,207,131) | ||
Realized gain (loss) on sale of digital currencies | 0 | (3,662) | (149,858) | (4,941) | ||
Write-off of bad debts | 150,162 | |||||
Amortization of debt issuance costs | 643,025 | 0 | ||||
Stock Compensation | 1,246,460 | 0 | ||||
Impairments on digital currencies | 91,040 | 0 | 466,286 | 0 | ||
Changes in fair value of warrant liabilities | (92,979) | 0 | 98,498 | 0 | ||
(Increase) decrease in assets: | ||||||
Digital currencies | (3,901,426) | (237,107) | ||||
Accounts receivable | (242,489) | 42,037 | ||||
Prepaid Insurance | (278,538) | 0 | ||||
Due from related party | 302,973 | 0 | ||||
Inventory | 29,291 | (87,867) | ||||
Other current assets | (3,713,832) | (1,196) | ||||
Increase (decrease) in liabilities: | ||||||
Accounts payable | 21,141,055 | 1,380,198 | ||||
Due to related parties | 37,280 | (358,602) | ||||
Accrued liabilities | 3,832,362 | (9,431) | ||||
Contract liabilities | 147,836 | 36,000 | ||||
NET CASH PROVIDED BY (USED) OPERATING ACTIVITIES | 11,871,840 | (349,197) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Proceeds from sale of digital currencies | 584,387 | 94,954 | ||||
Proceeds from sale of derivatives | 0 | 1,712,878 | ||||
Purchase of land | (29,919) | 0 | ||||
Purchase of property, plant and equipment | (34,735,332) | (1,415,621) | ||||
Equipment purchase deposits- net of future commitments | (85,624,852) | 0 | ||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (119,805,716) | 392,211 | ||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||||||
Payments on long-term debt | (7,811,150) | (198,500) | ||||
Proceeds from promissory note | 38,987,333 | 0 | ||||
Proceeds from equipment financing agreement | 24,157,178 | 0 | ||||
Proceeds from PPP loan | 841,670 | 638,000 | ||||
Proceeds from private placements- mezzanine equity (net of fees) | 97,064,318 | 0 | ||||
Proceeds/(Payoff) of EIDL loan | (150,000) | 160,000 | ||||
Payoff of related-party notes | (2,024,250) | 0 | ||||
Buyout of Aspen Interest | (2,000,000) | 0 | ||||
Distributions paid | 0 | (591,119) | ||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 149,065,099 | 8,381 | ||||
NET INCREASE (DECREASE) IN CASH | 41,131,223 | 51,395 | ||||
CASH - BEGINNING OF PERIOD | 303,187 | 134,143 | $ 134,143 | |||
CASH - END OF PERIOD | $ 41,434,410 | $ 185,538 | $ 41,434,410 | $ 41,434,410 | $ 185,538 | $ 303,187 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Reorganization Stronghold Digital Mining, Inc. (“Stronghold Inc.” or "the Company") was incorporated as a Delaware corporation on March 19, 2021. On April 1, 2021, contemporaneously with the Series A Private Placement (as defined below), Stronghold Inc. underwent a corporate reorganization pursuant to a Master Transaction Agreement, which will be referred to herein as the “Reorganization.” Immediately prior to the Reorganization, Q Power LLC (“Q Power”) directly held all of the equity interests in Stronghold Digital Mining LLC (“SDM”), and indirectly held 70% of the limited partner interests, and all of the general partner interests, in Scrubgrass Reclamation Company, L.P. (f/k/a Scrubgrass Generating Company, L.P.) (“Scrubgrass LP”), through wholly owned subsidiaries EIF Scrubgrass LLC (“EIF Scrubgrass”), Falcon Power LLC (“Falcon”) and Scrubgrass Power LLC. Aspen Scrubgrass Participant, LLC ("Aspen") held the remaining 30% of the limited partner interests in Scrubgrass LP (the “Aspen Interest”). Scrubgrass LP is a Delaware limited partnership originally formed on December 1, 1990 under the name of Scrubgrass Generating Company, L.P. SDM is a Delaware limited liability company originally formed on February 12, 2020 under the name Stronghold Power LLC (“Stronghold Power”). On April 1, 2021 Stronghold Inc. entered into a Series A Preferred Stock Purchase Agreement pursuant to which Stronghold Inc. issued and sold 9,792,000 shares of Series A Convertible Redeemable Preferred Stock (the “Series A Preferred Stock”) in a private offering (the “Series A Private Placement”) at a price of $8.68 per share to various accredited individuals in reliance upon exemptions from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D thereunder for aggregate consideration of approximately $85.0 million. In connection with the Series A Private Placement, the Company incurred approximately $6.3 million in fees and $631,897 as debt issuance costs for warrants issued as part of the Series A Private Placement. Contemporaneously with the Reorganization, Stronghold Inc. acquired the Aspen Interest using 576,000 shares of newly issued Series A Preferred Stock and $2,000,000 from a portion of the proceeds from the Series A Private Placement. The acquisition of the Aspen Interest is a total consideration of $7,000,000 that consists of the $2,000,000 in cash plus a valuation of $5,000,000 for the 576,000 shares of the Series A Preferred Stock at the issuance per share price of $8.68, and are classified as permanent equity and not subject to mandatory redemptions as outlined in Stronghold Inc.'s certificate of incorporation, as amended (the “Charter”). Pursuant to the Reorganization, Q Power contributed all of its ownership interests in EIF Scrubgrass, Falcon and SDM to Stronghold Digital Mining Holdings LLC (“Stronghold LLC”) in exchange for 27,072,000 Class A common units of Stronghold LLC (“Stronghold LLC Units”), Stronghold Inc. contributed cash (using the remaining proceeds from the Series A Private Placement, net of fees, expenses and amounts paid to Aspen), 27,072,000 shares of Class V common stock of Stronghold Inc. and the Aspen Interest to Stronghold LLC in exchange for 10,368,000 preferred units of Stronghold LLC, and Stronghold LLC immediately thereafter distributed the 27,072,000 shares of Class V common stock to Q Power. In addition, effective as of April 1, 2021, Stronghold Inc. acquired 14,400 Stronghold LLC Units held by Q Power (along with an equal number of shares of Class V common stock) in exchange for 14,400 newly issued shares of Class A common stock. As a result of the Reorganization, the acquisition of the Aspen Interest and the acquisition of Stronghold LLC Units by Stronghold Inc. discussed above, (a) Q Power acquired and retained 27,057,600 Stronghold LLC Units, 14,400 shares of Class A common stock of Stronghold Inc., and 27,057,600 shares of Class V common stock of Stronghold Inc. effectively giving Q Power approximately 69% of the voting power of Stronghold Inc. and approximately 69% of the economic interest in Stronghold LLC, (b) Stronghold Inc. acquired 10,368,000 preferred units of Stronghold LLC and 14,400 Stronghold LLC Units, effectively giving Stronghold Inc. approximately 31% of the economic interest in Stronghold LLC, (c) Stronghold Inc. became the sole managing member of Stronghold LLC and is responsible for all operational, management and administrative decisions relating to Stronghold LLC’s business and will consolidate financial results of Stronghold LLC and its subsidiaries, (d) Stronghold Inc. became a holding company whose only material asset consists of membership interests in Stronghold LLC, and (e) Stronghold LLC directly or indirectly owns all of the outstanding equity interests in the subsidiaries through which we operate the Company's assets, including Scrubgrass LP and SDM. On May 14, 2021, the Company completed a private placement of shares of the Company’s Series B Convertible Redeemable Preferred Stock of Stronghold Inc. (the “Series B Preferred Stock,” and, together with the Series A Preferred Stock, the “Preferred Stock”) (the “Series B Private Placement,” and, together with the Series A Private Placement, the “Private Placements”). The terms of the Series B Preferred Stock are substantially similar to the Series A Preferred Stock, except for differences in the stated value of such shares in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or certain deemed liquidation events. In connection with the Series B Private Placement, the Company sold 1,817,035 shares of its Series B Preferred Stock for an aggregate purchase price of $20.0 million. In connection with the Series B Private Placement, the Company incurred approximately $1.6 million in fees and expenses and $148,575 as debt issuance costs for warrants issued as part of the Series B Private Placement. Pursuant to the terms of the Preferred Stock, on (i) the date that a registration statement registering the shares of Class A common stock issuable upon the conversion of the Preferred Stock is declared effective by the U.S. Securities and Exchange Commission (the "SEC") or (ii) the date on which a “Significant Transaction Event” occurs, as defined in the Company's amended and restated certificate of incorporation, such shares of Preferred Stock will automatically convert into shares of Class A common stock of Stronghold Inc. on a one-to-one basis, subject to certain adjustments as set forth in the Charter. Correspondingly, pursuant to the Third Amended and Restated Limited Liability Company Agreement of Stronghold LLC, as amended from time to time (the “Stronghold LLC Agreement”), preferred units in Stronghold LLC automatically convert into Stronghold LLC Units on a one-to-one basis under like circumstances (subject to corresponding adjustments). On October 20, 2021, the registration statement registering the shares of Class A common stock issuable upon conversion of the Preferred Stock was declared effective by the SEC, and all of the outstanding shares of Preferred Stock converted into shares of Class A common stock at that time. Correspondingly, all of the preferred units in Stronghold LLC converted into Stronghold LLC Units. On June 29, 2021, Stronghold LLC formed Stronghold Digital Mining Equipment, LLC (“Equipment LLC”). Prior to the Reorganization Prior to the Reorganization date of April 1, 2021, Scrubgrass Generating Company, L.P. (“Scrubgrass”) existed as a Delaware limited partnership formed on December 1, 1990. Q Power, LLC existed as a multi-member limited liability company and indirectly held limited and general partner interests of Scrubgrass. Additionally, Aspen, a wholly-owned subsidiary of Olympus Power, LLC (together with its affiliates “Olympus”), was a limited partner of Scrubgrass. Scrubgrass had two subsidiaries: Clearfield Properties, Inc. (“Clearfield”), which was formed for the purpose of purchasing a 175-acre site in Clearfield County, Pennsylvania, and acquiring access to certain coal material; and Leechburg Properties, Inc. (“Leechburg”), which was formed for the purpose of acquiring access rights to certain waste coal sites. Leechburg was a dormant entity as of September 30, 2021 and December 31, 2020. Pursuant to an equity Assignment and Assumption agreement dated September 24, 2020, Q Power assigned a 50%-member interest to a second individual. As a result, two individuals were the sole members of Q Power. Stronghold Power was established on February 12, 2020 as a Delaware Limited Liability Company and is 100% owned by Q Power. Stronghold Power was created to pursue opportunities involving cryptocurrency mining as well as providing hosting services for third-party miners. Scrubgrass and Stronghold Power were under common control prior to the Reorganization date of April 1, 2021, and consolidated results reported as of December 31, 2020, and included in the consolidated results for the nine months ended September 30, 2021 and 2020. |
NATURE OF OPERATIONS AND SIGNIF
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES In most instances, Stronghold Inc., Scrubgrass, SDM, and Equipment LLC will collectively be referred to as the “Company” if a discussion applies to all. Where it may not apply to all, then each company, described as itself, will be specifically noted. “The reported financial statements” assumes both comparative periods are referenced as well as consolidated for each of the respective comparative periods. Nature of Operations The Company operates as a qualifying cogeneration facility (“Facility”) under the provisions of the Public Utilities Regulatory Policies Act of 1978 and sells its electricity into the PJM Interconnection Merchant Market (“PJM”) under an Energy Management Agreement (“EMA”) with Direct Energy Business Marketing, LLC (“DEBM”) effective February 1, 2015. The Company’s primary fuel source is waste coal which is provided by various third parties. Waste coal credits are earned by the Company by generating electricity utilizing coal refuse. Under the EMA, which was entered into as of January 23, 2015, DEBM agreed to act as the exclusive provider of services for the benefit of the Company related to interfacing with PJM, including handling daily operations of the facility, daily marketing and managing of a certain electric generating facility located in Kennerdell, Pennsylvania, energy management, capacity management and providing market and system information. The term of the agreement was initially through January 31, 2018, with three additional automatic renewal terms that now extends through January 31, 2022. DEBM was paid a monthly fee of $7,500 in satisfaction of its performance obligation during the term. The total revenue recognized under the EMA is 100% of the reported energy revenue and the total transaction price for the performance obligations varies depending upon market conditions and demand; such as usage and available capacities. The Company is also a vertically integrated digital currency mining business. The Company buys and maintains a fleet of digital/cryptocurrency mining equipment and the required infrastructure, it also provides power to third party digital currency miners under favorable Power Purchase Agreement (“PPA”) agreements, and it sells energy as a merchant power producer and receives capacity payments from PJM for making its energy available to the grid. The Digital currency mining operations are in their early stages, and digital currencies and energy pricing mining economics are volatile and subject to uncertainty. The Company’s current strategy will continue to expose it to the numerous risks and volatility associated with the digital mining and power generation sectors, including fluctuating Bitcoin-to-U.S.-Dollar prices, the costs and availability of miners, the number of market participants mining Bitcoin, the availability of other power generation facilities to expand operations and regulatory changes. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the annual financial statements. These financial statements reflect the consolidated accounts of the Company and wholly owned subsidiaries. In addition, certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements in order to conform to current presentation. The Company operates on a calendar year basis with the first day of the calendar year being January 1, and the last day of the year ending on December 31. Additionally, since there are no differences between net income and comprehensive income, all references to comprehensive income have been excluded from the condensed consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. The Company maintains its cash in non-interest bearing accounts that are insured by the Federal Deposit Insurance Company up to $250,000. The Company’s deposits may, from time to time, exceed the $250,000 limit; however, management believes that there is no unusual risk present, as the Company places its cash with financial institutions which management considers being of high quality. Digital Currencies Digital currencies are included in current assets in the reported balance sheets. Digital currencies are recorded at cost less any impairment. Currently Bitcoin constitutes the only cryptocurrency the Company mines or holds in material amounts. An intangible asset with an indefinite useful life is not amortized but assessed for impairment quarterly as well as annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The Company accounts for its gains or losses in accordance with the first-in, first-out (FIFO) method of accounting. The Company performed an impairment test on its digital currencies and $(91,040) and $(466,286) are recognized as expenses for the three and nine months ended September 30, 2021, respectively. The following table presents the activities of the digital currencies for the nine months ended September 30, 2021 and the year ended December 31, 2020: September 30, 2021 December 31, 2020 (unaudited) Digital currencies at beginning of year $ 228,087 $ 15,436 Additions of digital currencies 3,901,426 339,456 Realized gain (loss) on sale of digital currencies 149,858 31,810 Impairments (466,286) — Proceeds from Sale of digital currencies (584,387) (158,615) Digital currencies at month ending $ 3,228,698 $ 228,087 Accounts Receivable Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. An allowance for doubtful accounts is provided when necessary and is based upon management’s evaluation of outstanding accounts receivable at year end. The potential risk is limited to the amount recorded in the financial statements. For the three and nine months ended September 30, 2021, an outstanding customer balance of $150,162 was considered not collectable and was written off to bad debts expense. No further allowance was considered necessary as of September 30, 2021 and December 31, 2020. Inventory Waste coal, fuel oil and limestone are valued at the lower of average cost or net realizable value and includes all related transportation and handling costs. The Company performs periodic assessments to determine the existence of obsolete, slow-moving, and unusable inventory and records necessary provisions to reduce such inventories to net realizable value. Spare parts inventory is expensed when purchased. Derivative Contracts In accordance with guidance on accounting for derivative instruments and hedging activities all derivatives should be recognized at fair value. Derivatives or any portion thereof, that are not designated as, and effective as, hedges must be adjusted to fair value through earnings. Derivative contracts are classified as either assets or liabilities on the accompanying combined balance sheets. Certain contracts that require physical delivery may qualify for and be designated as normal purchases/normal sales. Such contracts are accounted for on an accrual basis. The Company uses derivative instruments to mitigate its exposure to various energy commodity market risks. The Company does not enter into any derivative contracts or similar arrangements for speculative or trading purposes. The Company will, at times, sell its forward unhedged electricity capacity to stabilize its future operating margins. As of September 30, 2021 and December 31, 2020, all derivative contracts were settled. Fair Value Measurements The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities; Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data; and Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. As of September 30, 2021 the Company’s redeemable preferred warrants are recorded at fair value – refer to Note 14 – Stock Issued Under Master Financing Agreements and Warrants. As of December 31, 2020, the Company did not have any assets or liabilities remeasured at fair value. Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. The Company records all assets associated with the cryptocurrency hosting operations at cost. These assets are comprised of storage trailers and the related electrical components. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the remaining estimated useful lives (“EUL”) of the related assets using the straight-line method. The Company’s depreciation is based on its Facility being considered a single property unit. Certain components of the Facility may require replacement or overhaul several times over its estimated life. Costs associated with overhauls are recorded as an expense in the period incurred. However, in instances where a replacement of a Facility component is significant and the Company can reasonably estimate the original cost of the component being replaced, the Company will write-off the replaced component and capitalize the cost of the replacement. The component will be depreciated over the lesser of the EUL of the component or the remaining useful life of the Facility. The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of property and equipment may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of property and equipment. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property and equipment is used, and the effects of obsolescence, demand, competition, and other economic factors. Cryptocurrency Machines Management has assessed the basis of depreciation of the Company’s cryptocurrency machines used to verify digital currency transactions and generate digital currencies and believes they should be depreciated over a two-year period. The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers, is influenced by a number of factors including the following: 1. The complexity of the transaction verification process which is driven by the algorithms contained within the Bitcoin open source software; 2. The general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as hashing capacity which is measured in Petahash units); and 3. Technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of digital assets generated as a function of operating costs, primarily power costs, (i.e., the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and a lower cost of purchase). The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of specialized equipment. Management has determined that two years best reflects the current expected useful life of transaction verification servers. This assessment takes into consideration the availability of historical data and management’s expectations regarding the direction of the industry including potential changes in technology. Management will review this estimate annually and will revise such estimate as and when data becomes available. To the extent that any of the assumptions underlying management’s estimate of useful life of its transaction verification servers are subject to revision in a future reporting period either as a result of changes in circumstances or through the availability of greater quantities of data then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets. Asset Retirement Obligations Asset retirement obligations, including those conditioned on future events, are recorded at fair value in the period in which they are incurred, if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset in the same period. In each subsequent period, the liability is accreted to its present value and the capitalized cost is depreciated over the EUL of the long-lived asset. If the asset retirement obligation is settled for other than the carrying amount of the liability, the Company recognizes a gain or loss on settlement. The Company’s asset retirement obligation represents the cost the Company would incur to perform environmental clean-up or dismantle certain portions of the Facility. Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of this revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1. Step 1: Identify the contract with the customer 2. Step 2: Identify the performance obligations in the contract 3. Step 3: Determine the transaction price 4. Step 4: Allocate the transaction price to the performance obligations in the contract 5. Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. There were no revenue streams with variable consideration during the nine months ended September 30, 2021 and 2020. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (the "FASB"), the Company may be required to change its policies, which could have an effect on the Company’s condensed consolidated financial position and results from operations. Fair value of the digital asset award received is determined using the quoted price of the related cryptocurrency at the time of receipt. The Company’s policies with respect to its revenue streams are detailed below. Energy Revenue The Company operates as a market participant through PJM Interconnection, a Regional Transmission Organization (“RTO”) that coordinates the movement of wholesale electricity. The Company sells energy in the wholesale generation market in the PJM RTO. Energy revenues are delivered as a series of distinct units that are substantially the same and that have the same pattern of transfer to the customer over time and are therefore accounted for as a distinct performance obligation. The transaction price is based on pricing published in the day ahead market which constitute the stand-alone selling price. Energy revenue is recognized over time as energy volumes are generated and delivered to the RTO (which is contemporaneous with generation), using the output method for measuring progress of satisfaction of the performance obligation. The Company applies the invoice practical expedient in recognizing energy revenue. Under the invoice practical expedient, energy revenue is recognized based on the invoiced amount which is considered equal to the value provided to the customer for the Company’s performance obligation completed to date. Reactive energy power is provided to maintain a continuous voltage level. Revenue from reactive power is recognized ratably over time as the Company stands ready to provide it if called upon by the PJM RTO. Capacity Revenue The Company provides capacity to a customer through participation in capacity auctions held by the PJM RTO. Capacity revenues are a series of distinct performance obligations that are substantially the same and that have the same pattern of transfer to the customer over time and are therefore accounted for as a distinct performance obligation. The transaction price for capacity is market-based and constitutes the stand-alone selling price. As capacity represents the Company’s stand-ready obligation, capacity revenue is recognized as the performance obligation is satisfied ratably over time, on a monthly basis, since the Company stands ready equally throughout the period to deliver power to the PJM RTO if called upon. The Company applies the invoice practical expedient in recognizing capacity revenue. Under the invoice practical expedient, capacity revenue is recognized based on the invoiced amount which is considered equal to the value provided to the customer for the Company’s performance obligation completed to date. Penalties may be assessed by the PJM RTO against generation facilities if the facility is not available during the capacity period. The penalties assessed by the PJM RTO, if any, are recorded as a reduction to capacity revenue when incurred. Cryptocurrency Hosting The Company has entered into customer hosting contracts whereby the Company provides electrical power to cryptocurrency mining customers, and the customers pay a stated amount per megawatt-hour (“MWh”) (“Contract Capacity”). This amount is paid monthly in advance. Amounts used in excess of the Contract Capacity are billed based upon calculated formulas as contained in the contracts. If any shortfalls occur to due to outages, make-whole payment provisions contained in the contracts are used to offset the billings to the customer which prevented them from cryptocurrency mining. Advanced payments and customer deposits are reflected as contract liabilities. Cryptocurrency Mining The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The terms of the agreement provide that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Waste Coal Credits Waste coal credits are issued by the Commonwealth of Pennsylvania. Facilities that generate electricity by using coal refuse for power generation, control acid gases for emission control, and use the ash produced to reclaim mining-affected sites are eligible for such credits. Income related to these credits is recorded upon cash receipt and within other income. Renewable Energy Credits (“RECs”) The Company uses coal refuse, which is classified as a Tier II Alternative Energy Source under Pennsylvania law, to produce energy to sell to the open market (“the grid”). A third party acts as the benefactor, on behalf of the Company, in the open market and is invoiced as RECs are realized. These credits are recognized as a contra-expense to offset the fuel costs to produce this refuse. This is per GAAP guidance that these costs held in inventory to then produce the energy to qualify for the credits are a compliance cost and should offset operating costs when expensed. Refer to Note 18 – Renewable Energy Credits. Stock Based Compensation For equity-classified awards, compensation expense is recognized over the requisite service period based on the computed fair value on the grant date of the award. Equity classified awards include the issuance of stock options and restricted stock units (“RSUs”). Notes Payable The Company records notes payable net of any discounts or premiums. Discounts and premiums are amortized as interest expense or income over the life of the note in such a way as to result in a constant rate of interest when applied to the amount outstanding at the beginning of any given period. Warrant Liabilities The Company records warrant liabilities at their fair value as of the balance sheet date, and recognizes changes in the balances, over the comparative periods of either the issuance date or the last reporting date, as part of changes in fair value of warrant liabilities expense. Segments Accounting guidance establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in financial reports issued to stockholders. The Company has reorganized into two operating segments, which consist of Energy Operations and Cryptocurrency Operations. See Note 12 – Segment Reporting. Mezzanine Equity Redeemable Preferred Stock The Preferred Stock is reported as a mezzanine obligation between liabilities and stockholders’ equity due to certain redemption features being outside the control of the Company. See Note 15 – Mezzanine Equity. Common Stock – Class V The Common Stock – Class V shares (as described in Note 15 – Mezzanine Equity) is reported as a mezzanine obligation between liabilities and stockholders’ equity due to certain redemption features being outside the control of the Company. The Company accounts for the 68.9% interest represented by the Class V common stock as mezzanine equity as a result of certain redemption rights held by the holders thereof as discussed in "Note 15 – Mezzanine Equity." As such, the Company adjusts mezzanine equity to its maximum redemption amount at the balance sheet date, if higher than the carrying amount. The redemption amount is based a third-party valuation methodology of the Company’s Class A common stock at the end of the reporting period. Changes in the redemption value are recognized immediately as they occur, as if the end of the reporting period was also the redemption date for the instrument, with an offsetting entry to accumulated deficits. For each share of Class V common stock outstanding, there is a corresponding outstanding Class A common unit of Stronghold LLC. The redemption of any share of Class V common stock would be accompanied by a concurrent redemption of the corresponding Class A common unit of Stronghold LLC, such that both the share of Class V common stock and the corresponding Class A common unit of Stronghold LLC are redeemed as a combined unit in exchange for either a single share of Class A common stock or cash of equivalent value based on the fair market value of the Class A common stock at the time of the redemption. For accounting purposes, the value of the Class A common units of Stronghold LLC is attributed to the corresponding shares of Class V common stock on the September 30, 2021 balance sheet. Loss per share Basic net (loss) income per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding or shares subject to exercise for a nominal value during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the Company has incurred a loss for the period ended September 30, 2021, basic and diluted net loss per share is the same. At December 31, 2020 there were no potential dilutive securities outstanding. See Note 17 – Earnings (Loss) Per Share. Income Taxes Reorganization Upon completion of the Reorganization, the Company is organized as an “Up-C” structure in which substantially all of the assets and business of the consolidated Company are held by Stronghold Inc. through its subsidiaries, and the Company’s direct assets largely consist of cash and investments in subsidiaries. For income tax purposes, the portion of the Company’s earnings allocable to Stronghold Inc. is subject to corporate level tax rates at the federal and state levels. Therefore, the income taxes recorded prior to the Reorganization are not representative of the income taxes after the Reorganization. Stronghold Inc. and its indirectly owned corporate subsidiaries, Clearfield and Leechburg, account for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. Based on the Company’s evaluation and application of ASC Topic 740, Income Taxes (“ASC 740”), the Company has determined that the utilization of the deferred tax assets is not more likely than not, and therefore the Company has recorded a valuation allowance against the net deferred tax assets of the Company as well as Clearfield and Leechburg. Factors contributing to this assessment are the Company’s cumulative and current losses, as well as the evaluation of other sources of income a |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consist of the following components as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 (unaudited) Waste coal $ 304,202 $ 342,476 Fuel oil 49,508 33,243 Limestone 13,891 21,173 TOTALS $ 367,601 $ 396,892 |
EQUIPMENT DEPOSITS
EQUIPMENT DEPOSITS | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
EQUIPMENT DEPOSITS | EQUIPMENT DEPOSITS Equipment deposits are contractual agreements with three vendors to deliver and install miners at future dates. The following details the vendors, miner models, miner counts, and expected delivery months. The Company is contractually committed to take future deliveries, and portions of the equipment are collateralized against the WhiteHawk Promissory Note (as defined below) as disclosed in Note 6 – Long-Term Debt. With the exception of Cryptech Solutions ("Cryptech"), where there is an installment payments plan, all unpaid deposits will be made on the last month referenced in the timeframe below. The delivery timeframe for the 2,400 Cryptech miners will be in equal installments of 200 per month for 12 months starting in November 2021. Deliveries for the other vendors vary within the referenced timeframes. Vendor Model Count Delivery Timeframe Total Commitments Unpaid [A] Equipment Deposits MinerVa MinerVA 15,000 Oct ‘21 - Dec '21 $ 73,387,500 (14,677,500) 58,710,000 Cryptech Bitmain 2,400 Nov ‘21 - Oct ‘22 12,660,000 (7,807,000) 4,853,000 Northern Data MicroBT 9,900 Oct ‘21 - Nov '21 22,061,852 — 22,061,852 Totals 27,300 $ 108,109,352 $ (22,484,500) $ 85,624,852 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following as of September 30, 2021 and December 31, 2020: Useful Lives (Years) September 30, 2021 Dec 31, 2020 (unaudited) Electric Plant 60 $ 30,288,979 $ 30,288,979 Power Transformers 30 2,162,386 — Machinery and equipment 5 - 20 5,436,333 2,862,736 Cryptocurrency Machines & Powering Supplies 2 - 3 6,387,432 — Computer hardware and software 3 - 5 4,236 5,062 Vehicles & Trailers 5 - 7 81,733 81,733 Construction in progress Not Depreciable 25,157,279 1,544,536 Asset retirement obligation 5 79,848 79,848 69,598,226 34,862,894 Accumulated depreciation and amortization (29,483,439) (27,048,695) TOTALS $ 40,114,787 $ 7,814,199 Construction in Progress Construction in progress consists of various projects to build out the cryptocurrency machine power infrastructure and is not depreciable until the asset is considered in service and successfully powers and runs the attached cryptocurrency machines. Completion of these projects will have various rollouts of energized transformed containers and are designed to calibrate power from the plant to the container that houses multiple cryptocurrency machines. Currently, the balance of $25,157,279, as of September 30, 2021, represents open contracts with a vendor that have future completion dates scheduled for the remainder of the year. Depreciation and Amortization Depreciation and amortization charged to operations was $2,463,549 and $422,603 for the nine months ended September 30, 2021 and September 30, 2020 respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 Dec 31, 2020 $66,076 loan for equipment with monthly payments of $1,537 with interest at 5.55%, due July 2021. $ 7,582 $ 16,440 $75,000 loan for equipment with monthly payments of $2,489 with interest at 12.67%, due April 2021. 7,312 14,934 $142,000 loan for equipment with monthly payments of $4,620 with interest at 11.21%, due April 2021. — 18,056 $70,000 loan for equipment with monthly payments of $2,300 with interest at 11.92%, due April 2021. — 8,974 $499,520 loan for equipment with monthly payments of $8,863 with interest at 2.49% due December 2023. 257,376 333,599 $499,895 loan for equipment with monthly payments of $11,054 with interest at 2.95% due July 2023. 277,908 371,490 $212,675 loan for equipment with monthly payments of $7,239 with interest at 6.75% due October 2022. 123,600 168,397 $40,000,000 loan for equipment with monthly payments of $1,845,747 with interest at 10.00% due June 2023. 35,424,692 [A] — $10,641,362 loan for equipment with monthly payments of $491,045 with interest at 10.00% due June 2023. 9,424,174 [B] — $14,077,800 loan for equipment with monthly payments of $649,619 with interest at 10.00% due June 2023. 12,467,543 [C] — 57,990,187 931,890 Less current portions, deferred costs, & discounts Outstanding loan 31,251,305 449,447 Deferred debt issuance costs 1,355,285 — Discounts from issuance of stock 1,216,152 — Discounts from issuance of warrants 1,749,472 — $ 22,417,973 $ 482,443 [A] The WhiteHawk Promissory Note has a term of twenty-four months. Refer to Note 14 – Stock Issued Under Financing Agreements and Warrants for further discussions. [B] Arctos/NYDIG Financing Agreement [loan #1] with a term of twenty-four months. Refer to Note 14 - Stock Issued Under Financing Agreements and Warrants for further discussions. [C] Arctos/NYDIG Financing Agreement [loan #2] with a term of twenty-four months. Refer to Note 14 - Stock Issued Under Financing Agreements and Warrants for further discussions. Future scheduled maturities on the outstanding borrowings for each of the next three years as of September 30, 2021 are as follows: Years ending December 31: 2021 $ 7,780,702 2022 32,620,394 2023 17,589,091 $ 57,990,187 On March 16, 2021, the Company received a round 2 Paycheck Protection Program ("PPP") loan in the amount of $841,670 that accrues an interest of 1% per year; and matures on the fifth anniversary of the date of the note. In January 2021, the Company was granted relief as forgiveness for the round 1 PPP loan in the amount of $638,800. On June 8, 2021, the Company repaid the Economic Injury Disaster Loan (“EIDL”), received on March 31, 2020, in the amount of $150,000. This loan, plus accrued interest, was outstanding as of December 31, 2020. |
CONCENTRATIONS
CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | CONCENTRATIONS Credit risk is the risk of loss the Company would incur if counterparties fail to perform their contractual obligations (including accounts receivable). The Company primarily conducts business with counterparties in the crypto mining and energy industry. This concentration of counterparties may impact the Company’s overall exposure to credit risk, either positively or negatively, in that its counterparties may be similarly affected by changes in economic, regulatory or other conditions. The Company mitigates potential credit losses by dealing, where practical, with counterparties that are rated at investment grade by a major credit agency or have a history of reliable performance within the crypto mining and energy industry. Financial instruments which potentially expose the Company to concentrations of credit risk consist primarily of cash and accounts receivable. Cash and cash equivalents customarily exceed federally insured limits. The Company’s significant credit risk is primarily concentrated with DEBM, which amounted to approximately 100% of the Company’s energy revenues for the nine months ending September 30, 2021 and 2020. DEBM accounted for 91% and 38% of the Company’s accounts receivable balance as of September 30, 2021 and December 31, 2020, respectively. For the nine months ended September 30, 2021 and 2020, the Company purchased 44% and 99% of coal from two related parties, respectively. See Note 9- Related-Party Transactions for further information. The Company has entered into various Master Equipment Financing Agreements that have future delivery and installation timeframes for approximately 27,300 miners. There can exist a risk of not achieving the expected delivery timelines as well as the timeliness of generating guaranteed targeted terahash by each miner. This risk is not quantifiable at this time. See Note 8 – Contingencies and Commitments for further information. |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND COMMITMENTS | CONTINGENCIES AND COMMITMENTS Legal Proceedings The Company experiences routine litigation in the normal course of business. Management is of the opinion that none of this routine litigation will have a material adverse effect on the Company’s reported financial position or results of operations. Equipment Agreements As discussed in Note 4, the Company has entered into various equipment contracts to purchase miners. Most of these contracts require a percentage of deposits upfront and subsequent future payments to cover the contracted purchase price of the equipment. Details of each agreement are summarized below. MinerVa Semiconductor Corp On April 2, 2021, the Company entered into a purchase agreement with MinerVa Semiconductor Corp (“MinerVa”) for the acquisition of 15,000 of their MV7 ASIC SHA256 model cryptocurrency miner equipment (miners) with a total terahash to be delivered equal to 1.5 million terahash (total terahash). The price per miner is $4,892.50 for an aggregate purchase price of $73,387,500 to be paid in installments. The first installment equal to 60% of the purchase price, or $44,032,500, was paid on April 2, 2021, and an additional payment of 20% of the purchase price, or $14,677,500, was paid June 2, 2021. As of September 30, 2021, the remaining 20% is still owed (refer to Note 23 - Subsequent Events for disclosure of the Company paying this final deposit in October 2021). The seller anticipates shipping no less than 15,000 miners by January 2022. Anticipated delivery quantities and timeframe will be no less than 2,500 miners by October 31, 2021, no less than 5,000 miners by November 30, 2021, no less than 5,000 by December 31, 2021, and the remaining 2,500 by January 2022. The aggregate purchase price does not include shipping costs, which are the responsibility of the Company and shall be determined at which time the miners are ready for shipment. Nowlit Solutions Corp The Company entered into a hardware purchase and sales agreement with Nowlit Solutions Corp effective April 1, 2021. Hardware includes, but is not limited to ASIC Miners, power supply units, power distribution units and replacement fans for ASIC Miners. All hardware must be paid for in advance before being shipped to the Company. The Company made payments to this party totaling $5,657,432 in April 2021 and costs have been capitalized and reported as property and equipment. As of September 30, 2021, there are no outstanding commitments owed to this vendor. Cryptech Solutions The Company entered into a hardware purchase and sales agreement with Cryptech effective April 1, 2021. Hardware includes, but is not limited to ASIC Miners, power supply units, power distribution units and replacement fans for ASIC Miners. Total purchase price is $12,660,000 for 2,400 BitmainS19j miners to be delivered monthly in equal quantities (200/month) from November 2021 through October 2022. All hardware must be paid for in advance before being shipped to the Company. The Company made a 30% down payment of $3,798,000 on April 1, 2021 with the remaining 70% or $8,862,000 agreed to be paid in seventeen installments. There have been five installments totaling $1,055,000 paid before September 30, 2021; with the outstanding amount still owed under this agreement of $7,807,000 as of September 30, 2021. Representing twelve installments remaining through September 2022: Remaining Purchase Price $ 12,660,000 April 2021 - 30% $ (3,798,000) # Date After down payment $ 8,862,000 1 05/01/21 $ (211,000) $ 8,651,000 3 06/01/21 $ (211,000) $ 8,440,000 4 07/01/21 $ (211,000) $ 8,229,000 5 08/01/21 $ (211,000) $ 8,018,000 6 09/01/21 $ (211,000) $ 7,807,000 7 10/01/21 $ (738,500) $ 7,068,500 8 11/01/21 $ (738,500) $ 6,330,000 9 12/01/21 $ (738,500) $ 5,591,500 10 01/01/22 $ (738,500) $ 4,853,000 11 02/01/22 $ (738,500) $ 4,114,500 12 03/01/22 $ (738,500) $ 3,376,000 13 04/01/22 $ (738,500) $ 2,637,500 14 05/01/22 $ (527,500) $ 2,110,000 15 06/01/22 $ (527,500) $ 1,582,500 15 07/01/22 $ (527,500) $ 1,055,000 16 08/01/22 $ (527,500) $ 527,500 17 09/01/22 $ (527,500) $ — The following are the outstanding future commitments still owed as of September 30, 2021: Vendor Model Count Delivery Timeframe Future Payments < 1 year 2 years 3-5 years MinerVa MinerVA 15,000 Oct ‘21 - Jan '21 $ 14,677,500 $ 14,677,500 $ — $ — Cryptech Bitmain 2,400 Nov ‘21 - Oct ‘22 7,807,000 7,807,000 — — Totals 17,400 $ 22,484,500 $ 22,484,500 $ — $ — Refer to Note 25 - Subsequent Events disclosing that the Company paid the final MinerVa deposit of $14,667,500 on October 26, 2021. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Waste Coal Agreement The Company is obligated under a Waste Coal Agreement (the “WCA”) to take minimum annual delivery of 200,000 tons of waste coal as long as there is a sufficient quantity of waste coal that meets the Average Quality Characteristics (as defined in the WCA). Under the terms of the WCA, the Company is not charged for the waste coal itself but is charged a $6.07 per ton base handling fee as it is obligated to mine, process, load and otherwise handle the waste coal for itself and also for other customers of Coal Valley Sales, LLC (“CVS”) from the Russellton site specifically. The Company is also obligated to unload and properly dispose of ash at the Russellton site. A reduced handling fee is charged at $1.00 per ton for any tons in excess of the minimum take of 200,000 tons. The Company is the designated operator at the Russellton site and therefore is responsible for complying with all state and federal requirements and regulations. In December 2020, the Company notified CVS by letter that it intends to restart operations at Russellton during the first quarter of 2021. It proposed a ramp-up of tons and payments at $25,000 a month until the economics of the plant steady and return to the minimum take per the contract. Subsequent to March 31, 2021, the Company has resumed the semi-monthly minimum payments of approximately $51 thousand per the WCA. The Company purchased coal from Coal Valley Properties, LLC, a single-member LLC which is entirely owned by one individual that has ownership in Q Power, and from CVS. CVS is a single-member LLC which is owned by a coal reclamation partnership of which an owner of Q Power has a direct and an indirect interest in the partnership of 16.26%. Coal purchases under this agreement for the three and nine months ended September 30, 2021 and September 30, 2020 are as follows: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Coal Purchases: Coal Valley Sales, LLC 252,917 — 631,416 — TOTALS $ 252,917 $ — $ 631,416 $ — The Company had various related party agreements and transactions for the periods prior to the date of reorganization on April 1, 2021. Management Services Agreement On May 10, 2021, a new management and advisory agreement was entered into between Q Power, and William Spence. In consideration of consultant’s performance of the services thereunder, Q Power will pay Mr. Spence a fee at the rate of $50,000 per complete calendar month (pro-rated for partial months) that Mr. Spence provides services thereunder, payable in arrears. The previous agreement requiring monthly payments of $25,000 was terminated. Q Power will not be liable for any other payments to Mr. Spence including, but not limited to, any cost or expenses incurred by Mr. Spence in the course of performing his obligations thereunder. The Company has made total payments of $150,000 and $450,000 for the three and nine months ended September 30, 2021, respectively. In September 2021, the Company repaid $2,093,018, plus accrued interest, in related party notes with Greg Beard and William Spence. Amounts due to related parties as of September 30, 2021 and December 31, 2020: September 30, 2021 Dec 31, 2020 Payables: Coal Valley Properties, LLC $ — $ 188,338 Q Power LLC 510,000 510,000 Coal Valley Sales, LLC 225,618 — TOTALS $ 735,618 $ 698,338 $49 thousand and $69 thousand was paid to Beard Aviation LLC for various company-related business trips for three months ended September 30, 2021 and the nine months ended September 30, 2021. Beard Aviation LLC is owned by Greg Beard, the Chief Executive Officer (“CEO”) of Stronghold Inc. |
PAYCHECK PROTECTION PROGRAM LOA
PAYCHECK PROTECTION PROGRAM LOAN, ECONOMIC INJURY DISASTER LOAN | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
PAYCHECK PROTECTION PROGRAM LOAN, ECONOMIC INJURY DISASTER LOAN | LONG-TERM DEBT Long-term debt consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 Dec 31, 2020 $66,076 loan for equipment with monthly payments of $1,537 with interest at 5.55%, due July 2021. $ 7,582 $ 16,440 $75,000 loan for equipment with monthly payments of $2,489 with interest at 12.67%, due April 2021. 7,312 14,934 $142,000 loan for equipment with monthly payments of $4,620 with interest at 11.21%, due April 2021. — 18,056 $70,000 loan for equipment with monthly payments of $2,300 with interest at 11.92%, due April 2021. — 8,974 $499,520 loan for equipment with monthly payments of $8,863 with interest at 2.49% due December 2023. 257,376 333,599 $499,895 loan for equipment with monthly payments of $11,054 with interest at 2.95% due July 2023. 277,908 371,490 $212,675 loan for equipment with monthly payments of $7,239 with interest at 6.75% due October 2022. 123,600 168,397 $40,000,000 loan for equipment with monthly payments of $1,845,747 with interest at 10.00% due June 2023. 35,424,692 [A] — $10,641,362 loan for equipment with monthly payments of $491,045 with interest at 10.00% due June 2023. 9,424,174 [B] — $14,077,800 loan for equipment with monthly payments of $649,619 with interest at 10.00% due June 2023. 12,467,543 [C] — 57,990,187 931,890 Less current portions, deferred costs, & discounts Outstanding loan 31,251,305 449,447 Deferred debt issuance costs 1,355,285 — Discounts from issuance of stock 1,216,152 — Discounts from issuance of warrants 1,749,472 — $ 22,417,973 $ 482,443 [A] The WhiteHawk Promissory Note has a term of twenty-four months. Refer to Note 14 – Stock Issued Under Financing Agreements and Warrants for further discussions. [B] Arctos/NYDIG Financing Agreement [loan #1] with a term of twenty-four months. Refer to Note 14 - Stock Issued Under Financing Agreements and Warrants for further discussions. [C] Arctos/NYDIG Financing Agreement [loan #2] with a term of twenty-four months. Refer to Note 14 - Stock Issued Under Financing Agreements and Warrants for further discussions. Future scheduled maturities on the outstanding borrowings for each of the next three years as of September 30, 2021 are as follows: Years ending December 31: 2021 $ 7,780,702 2022 32,620,394 2023 17,589,091 $ 57,990,187 On March 16, 2021, the Company received a round 2 Paycheck Protection Program ("PPP") loan in the amount of $841,670 that accrues an interest of 1% per year; and matures on the fifth anniversary of the date of the note. In January 2021, the Company was granted relief as forgiveness for the round 1 PPP loan in the amount of $638,800. On June 8, 2021, the Company repaid the Economic Injury Disaster Loan (“EIDL”), received on March 31, 2020, in the amount of $150,000. This loan, plus accrued interest, was outstanding as of December 31, 2020. |
COVID-19
COVID-19 | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COVID-19 | COVID-19The full impact of the coronavirus (“COVID-19”) outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the future effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly in deciding how to allocate resources and in assessing performance. Our CEO is the primary decision-maker. The Company functions in two operating segments about which separate financial information is available as follows: Reportable segment results for the three and nine months ending September 30, 2021 and September 30, 2020 are as follows: Three Months Ended, Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Operating Revenues Energy Operations $ 3,459,468 $ 818,796 $ 8,262,646 $ 2,906,858 Cryptocurrency Operations 2,560,245 141,226 5,643,669 221,455 Total Operating Revenues $ 6,019,713 $ 960,022 $ 13,906,315 $ 3,128,313 Net Operating Income/(Loss) Energy Operations $ (2,757,306) $ (809,043) $ (5,907,069) $ (1,706,052) Cryptocurrency Operations (1,188,726) 86,436 (2,046,007) 173,391 Net Operating Income/(Loss) $ (3,946,032) $ (722,607) $ (7,953,076) $ (1,532,661) Other Income, net (a) $ (2,333,997) $ 40,233 $ (1,808,918) $ 1,208,901 Net Income/(Loss) $ (6,280,029) $ (682,374) $ (9,761,994) $ (323,760) Depreciation and Amortization Energy Operations $ (149,426) $ (139,150) $ (430,965) $ (422,603) Cryptocurrency Operations (1,008,948) — (2,032,584) — Total Depreciation & Amortization $ (1,158,374) $ (139,150) $ (2,463,549) $ (422,603) Interest Expense Energy Operations $ (22,264) $ (32,381) $ (90,570) $ (106,881) Cryptocurrency Operations (2,438,404) — (2,504,181) — Total Interest Expense $ (2,460,668) $ (32,381) $ (2,594,751) $ (106,881) (a) The Company does not allocate other income, net for segment reporting purposes. Amount is shown as a reconciling item between net operating income/(losses) and consolidated income before taxes. Refer to consolidated statement of operations for the three and nine months ended September 30, 2021 and 2020 for further details. Assets, at September 30, 2021, by energy operations and cryptocurrency operations totaled $8,855,271 and $166,496,829, respectively. Assets at September 30, 2020 related to cryptocurrency operations were not significant. Energy Operations Cryptocurrency Total (unaudited) (unaudited) Cash $ 583,039 $ 40,851,371 $ 41,434,410 Cryptocurrencies — 3,228,698 3,228,698 Accounts receivable 256,104 52,283 308,387 Prepaid Insurance 139,269 139,269 278,538 Due from related party — — — Inventory 367,601 — 367,601 Other current assets 1,889,831 1,889,832 3,779,663 Equipment Deposits — 85,624,852 85,624,852 Property, plant and equipment, net 5,404,263 34,710,524 40,114,787 Land 29,919 — 29,919 Road Bond 185,245 — 185,245 $ 8,855,271 $ 166,496,829 $ 175,352,100 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION On April 28, 2021, Stronghold Inc. approved a long-term incentive plan (the “LTIP”) pursuant to which it may grant stock options to employees, officers, consultants and other serve providers of the Company. The aggregate number of shares of common stock that may be issued or used for reference purposes or with respect to which awards may be granted under the plan shall not exceed 3,744,000 shares. The board of directors of the Company (the "Board") is duly authorized to administer the LTIP. The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s LTIP are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of the grant. These options generally vest on the grant date. The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plan were granted with an exercise price equal to the market price of the Company’s stock, as determined utilizing valuations in determining the fair value of its shares at the date of option grants at the date of grant and expire up to ten years from the date of grant. These options vest over the various terms. The Company estimates the fair value of stock options using peer company market price volatilities. The peer companies are the same list of guideline companies used for the 409(a) valuation on the initial fair-market valuation date (March 20, 2021). The following has been adjusted for the stock split effected on October 18, 2021: September 30, 2021 Weighted-average fair value of options granted $ 5.21 Expected volatility 117.64 % Expected life (in years) 5.79 Risk-free interest rate 0.90 % Expected dividend yield 0.00 % Expected Volatility - The Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term. Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. The Company elected to account for forfeited awards as they occur, as permitted by Accounting Standards Update 2016-09. As of September 30, 2021, the total future compensation expense related to non-vested options not yet recognized in the consolidated statement of operations was approximately $15,222,666 and the weighted-average period over which these awards expected to be recognized is 9.86 years. Stock compensation expense of $976,528 is recorded as a component of general and administrative expenses for the three months ended September 30, 2021, and $1,246,460 for the nine months ended September 30, 2021 respectively. There is no tax benefit related to stock compensation expense due to a full valuation allowance on net deferred tax assets at September 30, 2021. Stock Options There were no outstanding shares as of December 31, 2020. The following table summarizes the stock option activity (as adjusted) under the plans for the nine months ended September 30, 2021: Number of Shares Weighted- Average Exercise Price Expected Term Weighted- Average Remaining Contract Price Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2021 — $ — — $ — Granted 3,430,843 $ 8.91 9.86 $ 5.22 $ — Exercised — $ — — $ — Cancelled/forfeited — $ — — $ — Outstanding at September 30, 2021 3,430,843 $ 8.91 9.86 $ 5.22 $ — Shares vested and expected to vest 3,430,843 $ 8.91 9.86 $ 5.22 $ — Exercisable as of September 30, 2021 90,081 $ 7.53 9.79 $ 5.17 $ — Exercisable as of December 31, 2020 — $ — — $ — |
STOCK ISSUED UNDER MASTER FINAN
STOCK ISSUED UNDER MASTER FINANCING AGREEMENTS AND WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
STOCK ISSUED UNDER MASTER FINANCING AGREEMENTS AND WARRANTS | STOCK ISSUED UNDER MASTER FINANCING AGREEMENTS AND WARRANTS Stock Issued as part of an Equipment Financing Agreement Arctos Credit LLC (NYDIG) On June 25, 2021, SDM (i.e. "the Company") entered into a $34,481,700 ("Maximum Advance Amount") master equipment financing agreement with an affiliate of Arctos Credit, LLC (“Arctos” now known as “NYDIG”) (the “Arctos/NYDIG Financing Agreement”) . As part of this agreement, NYDIG was issued a total of 126,274 shares of common stock of Stronghold Inc.. The effective date of this issuance was as of the commencement date of the agreement. On July 2, 2021, the Company received two separate loans, against the $34,481,700, totaling $24,157,178 (net of debt issuance fees). The loans each have a maturity date of July 23, 2023, where the full outstanding principal amount of the loans is due and payable. Interest for each of the loans is set at 10% per annum. As of September 30, 2021, the fair value at the date of issuance (i.e.- June 25, 2021) of the 126,274 common shares or $1,389,888 is presented on the balance sheet as debt discounts that offsets the net proceeds of the loans; and is being amortized using the straight-line method over the terms of the loans (refer to Note 6 - Long-Term Debt for further details). For the nine months ended September 30, 2021, the Company recorded amortized costs in the amount of $173,736 related to the stock issued debt discounts. That amount is included in interest expense. In addition, the agreement stipulates a "Standby Fee" if, prior to August 15, 2021, the Company has failed to take advances from NYDIG equal to the total agreement amount of $34,481,700. The Standby Fee is calculated as 1.75% times the remaining principal that has not been borrowed; or $10,256,922 as of September 30, 2021. As a result, the Company has paid a total Standby Fee of $208,816 during each of the three and nine months ended September 30, 2021. That amount is included in interest expense. MinerVa Semiconductor Corp As discussed in Note 8 – Contingencies and Commitments, the Company on April 2, 2021, entered into a purchase agreement with MinerVa for the acquisition of 15,000 of their MV7 ASIC SHA256 model cryptocurrency miner equipment with a total terahash to be delivered equal to 1.5 million terahash (total terahash). In the exchange for the delivery of the total terahash, MinerVa will be granted 443,848 shares of Stronghold Inc. As discussed in Note 8, not all miners have been delivered but the Company is committed to take all future deliveries. The final delivery is after September 30, 2021; thus, the shares are deemed as not yet issued as of September 30, 2021. Warrants WhiteHawk Finance LLC On June 30, 2021, Equipment LLC entered into a $40,000,000 promissory note (the “WhiteHawk Promissory Note”) with White-Hawk Finance LLC (the “Lender” or “WhiteHawk”). The note has a maturity date of June 23, 2023, where the full outstanding principal amount of the note is due and payable. Interest for the note is set at 10% per annum. On September 30, 2021, Equipment LLC also entered into a Stock Purchase Warrant agreement with the Lender, where Equipment LLC issued 181,705 warrants to purchase shares of Class A common stock of Equipment LLC to the Lender. The warrants are exercisable by the Lender at any time during a ten-year term at $0.01 per share of common stock. The warrants are legally detachable and can separately be exercised. The fair value for the warrants, as of the issuance date, is $1,999,396 and is recorded as equity with the offset recorded as a debt discount against the net proceeds. The proceeds of $40,000,000 are allocated to the WhiteHawk Promissory Note and the warrants are being amortized based on the straight-line method over the twenty-four month term of the note. For the three and nine months ended September 30, 2021, the Company has recorded amortized debt discount, related to the warrants, in the amount of $249,925, which is included in interest expenses. B. Riley Securities, Inc. On each of April 1, 2021 and May 14, 2021, Stronghold Inc. entered into a warrant agreement with American Stock Transfer & Trust Company (the “Warrant Agent”). B. Riley Securities, Inc. acted as the Company’s placement agent in connection with the Private Placements. In connection therewith, the Company issued B. Riley Securities, Inc. (i) a five-year warrant to purchase up to 97,920 shares of Series A Preferred Stock at a per share exercise price of $8.68 and (ii) a five-year warrant to purchase up to 18,170 shares of Series B Preferred Stock at a per share exercise price of $11.01. In each case the exercise price was equal to the respective private placement per share price. B. Riley Securities, Inc. and its affiliates purchased 439,200 and 91,619 shares of Series A Preferred Stock and Series B Preferred Stock, respectively, at the same private placement per share price. The warrants contain standard limitations and representations and are exercisable for a period of five years from the date of the Private Placements. The warrants are legally detachable and separately exercisable. The accounting for warrants on redeemable shares follows the guidance in ASC 480-10-25-8 through 25-13. Those paragraphs address the classification of instruments, other than an outstanding share, that have both of the following characteristics: • The instrument embodies an obligation to repurchase the issuer’s equity shares, or is indexed to such an obligation. • The instrument requires or may require the issuer to settle the obligation by transferring assets. The fair value of the warrants was recorded as a liability with an offset to Additional Paid-in Capital. The fair value of each of the warrants was calculated using the Black-Scholes option-pricing model with the following assumptions: Series A The following are the Black-Scholes input assumptions for the 97,920 Series A warrants; and the changes in fair values as of April 1, 2021 (date of issuance) and September 30, 2021 respectively: Three months ended September 30, 2021 Nine months ended September 30, 2021 As of Changes in As of Changes in June 30, 2021 September 30, 2021 April 1, 2021 September 30, 2021 Expected volatility 100.2 % 117.6 % 17.4 % 100.2 % 117.6 % 17.4 % Expected life (in years) 4.83 4.83 0 4.83 4.83 0 Risk-free interest rate 0.9 % 1.0 % 0.1 % 0.9 % 1.0 % 0.1 % Expected dividend yield 0.00 % 0.00 % 0.0 % 0.00 % 0.00 % 0.0 % Fair value $ 825,350 $ 745,023 $ (80,327) $ 631,897 $ 745,023 $ 113,126 On April 1, 2021, the Company recorded a liability of $631,897, and as a debt issuance cost against the Mezzanine Equity (see Note 15- Mezzanine Equity). As of September 30, 2021, the fair value of this liability is $745,023. For the three months and nine months ended September 30, 2021; respectively, the Company recognized a decrease of $(80,327) and an increase of $113,126 as part of the changes in fair value of warrant liabilities expense. Series B The following are the Black-Scholes input assumptions for the 18,170 Series B warrants; and the changes in fair values as of May 14, 2021 (date of issuance) and September 30, 2021 respectively: Three months ended September 30, 2021 Nine months ended September 30, 2021 As of Changes in Fair Value Inputs As of Changes in Fair Value Inputs June 30, 2021 September 30, 2021 May 14, 2021 September 30, 2021 Expected volatility 100.2 % 117.6 % 17.4 % 100.2 % 117.6 % 17.4 % Expected life (in years) 4.8 4.8 0 4.8 4.8 0 Risk-free interest rate 0.9 % 1.0 % 0.1 % 0.8 % 1.0 % 0.2 % Expected dividend yield 0.00 % 0.00 % 0.0 % 0.00 % 0.00 % 0.0 % Fair value $ 146,599 $ 133,947 $ (12,652) $ 148,575 $ 133,947 $ (14,628) On May 14, 2021, the Company recorded a liability of $148,575, and as a debt issuance cost against the Mezzanine Equity (see Note 15- Mezzanine Equity). As of September 30, 2021, the fair value of this liability is $133,947. For the three months and nine months ended September 30, 2021; respectively, the Company recognized a decrease of $(12,652) and a decrease of $(14,628) as part of the changes in fair value of warrant liabilities expense. |
MEZZANINE EQUITY
MEZZANINE EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Temporary Equity Disclosure [Abstract] | |
MEZZANINE EQUITY | MEZZANINE EQUITY Private Placements- Mezzanine Equity Series A & B On April 1, 2021 the Company entered into a Series A Preferred Stock Purchase Agreement pursuant to which the Company issued and sold 9,792,000 shares of Series A Preferred Stock in the Series A Private Placement at a price of $8.68 per share to various accredited individuals in reliance upon exemptions from registration pursuant to Section 4(a)(2) of the Securities Act, and Regulation D thereunder for aggregate consideration of approximately $85.0 million. In connection with the Series A Private Placement, the Company incurred approximately $6.3 million in fees and $631,897 as debt issuance costs for warrants issued as part of the Series A Private Placement. Further, pursuant to the Series A Private Placement, Stronghold Inc., the investors in the Series A Private Placement and key holders entered into a Right of First Refusal Agreement ("ROFR Agreement"). Under the ROFR Agreement, the key holders agreed to grant a right of first refusal to Stronghold Inc. to purchase all or any portion of capital stock of Stronghold Inc., held by a key holder or issued to a key holder after the date of the ROFR Agreement, not including any shares of Series A Preferred Stock or common stock issued or issuable upon conversion of the Series A Preferred Stock. The key holders also granted a refusal right of refusal to the investors in the Series A Private Placement to purchase all or any eligible capital stock not purchased by Stronghold Inc. pursuant to its right of first refusal. The ROFR Agreement also provided certain co-sale rights to investors in the Series A Private Placement to participate in any sale or similar transfer of any shares of common stock owned by a key holder or issued to a key holder after the Series A Private Placement, on the terms and conditions specified in a written notice from a key holder. The investors, however, are not obligated to participate in such sales or similar transfers. The co-sale and rights of first refusal under the ROFR Agreement terminated when the Preferred Stock converted into shares of Class A common stock. On May 14, 2021, the Company completed the Series B Private Placement. The terms of the Series B Preferred Stock were substantially similar to the Series A Preferred Stock, except for differences in the stated value of such shares in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or certain deemed liquidation events. In connection with the Series B Private Placement, the Company sold 1,817,035 shares of its Series B Preferred Stock for an aggregate purchase price of $20.0 million. In connection with the Series B Private Placement, the Company incurred approximately $1.6 million in fees and expenses and $148,575 as debt issuance costs for warrants issued as part of the Series B Private Placement. The Company entered into registration rights agreements with the investors in the Private Placements concurrently with the closing of each Private Placement, with certain filing deadlines as defined in the agreements. The following is a summary of the Series A and Series B valuations: Series A Series B Proceeds $ 85,000,000 $ 20,000,305 Transaction Fees (1) : B. Riley Securities (5,100,000) (1,200,000) Vinson & Elkins L.L.P. (1,226,990) (408,997) Debt issuance costs pertaining to stock registration warrants - refer to Note 14 (631,897) (148,575) Total net mezzanine equity $ 78,041,113 $ 18,242,733 _______________ (1) – consists of registration and placement fees Common Stock – Class V In connection with the Reorganization on April 1, 2021, Stronghold LLC immediately thereafter distributed the 27,072,000 shares of Class V common stock to Q Power. In addition, effective as of April 1, 2021, Stronghold Inc. acquired 14,400 Stronghold LLC Units held by Q Power (along with an equal number of shares of Class V common stock) in exchange for 14,400 newly issued shares of Class A common stock. Common Stock – Class V represents 68.9% ownership of Stronghold LLC. where the original owners of Q Power have economic rights and, as a holder, one vote on all matters to be voted on by our stockholders generally, and a redemption right into Class A shares. The Company classifies shares of Class V common stock held by Q Power as mezzanine equity based on its assessment of (i) the right (the “Redemption Right”) to cause Stronghold LLC to acquire all or a portion of its Stronghold LLC Units for, at Stronghold LLC’s election, (x) shares of Stronghold Inc.’s Class A common stock at a redemption ratio of one share of Class A common stock for each Stronghold LLC Unit redeemed, subject to conversion rate adjustments for stock splits, stock dividends and reclassification and other similar transactions or (y) an approximately equivalent amount of cash as determined pursuant to the Stronghold LLC Agreement of Q Power, and (ii) the right (the “Call Right”), for administrative convenience, to acquire each tendered Stronghold LLC Unit directly from the redeeming Stronghold Unit Holder for, at its election, (x) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends and reclassification and other similar transactions, or (y) an approximately equivalent amount of cash as determined pursuant to the terms of the Stronghold LLC Agreement of the Company pursuant to ASC 480-10-S99-3A. For each share of class V common stock outstanding, there is a corresponding outstanding Class A common unit of Stronghold LLC. The redemption of any share of Class V common stock would be accompanied by a concurrent redemption of the corresponding Class A common unit of Stronghold LLC, such that both the share of Class V common stock and the corresponding Class A common unit of Stronghold LLC are redeemed as a combined unit in exchange for either a single share of Class A common stock or cash of equivalent value based on the fair market value of the Class A common stock at the time of the redemption. For accounting purposes, the value of the Class A common units of Stronghold LLC is attributed to the corresponding shares of Class V common stock on the September 30, 2021 balance sheet. Common Stock – Class V is classified as mezzanine equity in the unaudited condensed consolidated balance sheet as, pursuant to the Stronghold LLC Agreement, the Redemption Rights of each unit held by Q Power for either shares of Class A common stock or an equivalent amount of cash is not solely within the Company’s control. This is due to the holders of the Class V common stock collectively owning a majority of the voting stock of the Company, which allows the holders of Class V common stock to elect the members of the Board, including those directors that determine whether to make a cash payment upon a Stronghold LLC Unit Holder’s exercise of its Redemption Right. Mezzanine equity is recorded at the greater of the book value or redemption amount from the date of the issuance, April 1, 2021, and the reporting date as of September 30, 2021. As of the issuance date of April 1, 2021, the shares of the Class V common stock are classified as mezzanine equity at the fair value of $6.39 per share, net of the non-controlling equity interest, or $172,774,000. As of September 30, 2021, the fair value price per share is $9.33, and the maximum redemption value was increased by $79,669,602 to $252,443,652. The valuation and the subsequent fair value adjustment are accounted for as an increase in mezzanine equity, and also as a negative increase to accumulated deficits respectively. The Company recorded Mezzanine Equity as presented in the table below: Non- controlling Interest(1) Series A Series B Common - Class V Preferred Shares Amount Preferred Shares Amount Shares Amount Total Balance - July 1, 2021 $ — 9,792,000 $ 78,041,113 1,817,035 $ 18,242,733 27,057,600 $ 167,661,249 $ 263,945,094 Net losses for the three months ended September 30, 2021................................................................ (4,328,460) — — — — — — (4,328,460) Maximum redemption right valuation.................. 4,328,460 — — — — — 75,341,142 79,669,602 Balance - September 30, 2021 $ — 9,792,000 $ 78,041,113 1,817,035 $ 18,242,733 27,057,600 $ 243,002,391 $ 339,286,236 Non- controlling Interest(1) Series A Series B Common - Class V Preferred Shares Amount Preferred Shares Amount Shares Amount Total Balance - December 31, 2020 $ (2,710,323) — $ — — $ — — $ — $ (2,710,323) Net loss - January 1 to March 31, 2021 (167,261) — — — — — — (167,261) Balance prior to the reorganization on April 1, 2021 (2,877,584) (2,877,584) Effect of reorganizations (see Note 1) Exchange of common shares - Class V — — — — 27,072,000 — Issuance of Series A convertible redeemable preferred units — 9,792,000 78,673,010 — — — — 78,673,010 Warrants issued as part of stock registrations - refer to Note 14 — — (631,897) — — — — (631,897) Exchange of common units for Class A common shares — — — — — (14,400) — Issuance of Series B convertible redeemable preferred units — — — 1,817,035 18,391,308 — — 18,391,308 Warrants issued as part of stock registrations - refer to Note 14 — — — — (148,576) — — (148,576) Net losses for the six months ended September 30, 2021 (6,563,677) — — — — — — (6,563,677) Maximum redemption right valuation 9,441,261 243,002,391 252,443,652 Balance- September 30, 2021 $ — 9,792,000 $ 78,041,113 1,817,035 $ 18,242,733 27,057,600 $ 243,002,391 $ 339,286,236 _______________ 1 Refer to Note 16- Non-controlling Interest for further discussions |
NON-CONTROLLING INTEREST
NON-CONTROLLING INTEREST | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
NON-CONTROLLING INTEREST | NON-CONTROLLING INTERESTThe Company is the sole managing member of Stronghold LLC and as a result consolidates the financial results of Stronghold LLC and reports a non-controlling interest representing the Common Units of Stronghold LLC held by Q Power. Changes in the Company’s ownership interest in Stronghold LLC while the Company retains its controlling interest in Stronghold LLC will be accounted for as mezzanine equity transactions. As such, future redemptions or direct exchanges of common units of Stronghold LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest. Refer to Note 15- Mezzanine Equity and Common Stock - Class V that describes the Redemption Rights of the non-controlling interest. The following summarizes the mezzanine equity adjustments pertaining to the non-controlling interest from April 1, 2021 through September 30, 2021: Mezzanine Equity Adjustments Balance- April 1, 2021 (1) $ (2,877,584) Net losses for the three months ended June 30, 2021 (2,235,219) Maximum redemption right valuation (2) 172,774,052 Balance- June 30, 2021 $ 167,661,249 Net losses for the three months ended September 30, 2021 (4,328,460) Adjustment of mezzanine equity to redemption amount (3) 79,669,602 Balance- September 30, 2021 $ 243,002,391 1 As of the date of reorganization- refer to Note 1 2 Based on 27,057,600 Common Class V shares outstanding at $6.39 issuance price as of April 1, 2021 3 Based on 27,057,600 Common Class V shares outstanding at $9.33 fair valuation price as of September 30, 2021 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic EPS of common stock is computed by dividing the Company’s net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company excludes the unvested RSUs awarded to its employees, officers, directors, and contractors under the LTIP from this net loss per share calculation because including them would be antidilutive. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock after the date of the reorganization on April 1, 2021. Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 July 1 to September 30, 2021 April 1 to September 30, 2021 Numerator Net Loss (1) $ (6,280,029) $ (9,523,046) Less; net losses attributable to non-controlling interests $ (4,328,460) $ (6,563,677) Net loss attributable to Class A common shareholders $ (1,951,569) $ (2,959,369) Denominator Weighted average shares of Class A common shares outstanding (2) 322,342 173,532 Basic net loss per share $ (6.05) $ (17.05) __________________ (1) Basic and diluted earnings per share of Class A common stock is presented only for the period after the Company’s Reorganization Transactions. As such, net loss used in the calculation represents the loss during the three months ending September 30, 2021 (July 1 through September 30, 2021); and for the nine months ended September 30, 2021 (April 1, 2021 through September 30, 2021). (2) Includes 181,647 in warrants that have an nominal exercise price and is a common stock equivalent for earnings per share purposes. Securities that could potentially dilute losses per share in the future that were not included in the computation of diluted loss per share at September 30, 2021 because their inclusion would be anti-dilutive are as follows: September 30, 2021 Warrants to purchase convertible preferred stock 116,090 Class V common shares not yet exchanged for Class A common shares 27,057,600 Convertible Series A preferred shares 10,368,000 Convertible Series B preferred shares 1,817,035 Total 39,358,725 |
RENEWABLE ENERGY CREDITS
RENEWABLE ENERGY CREDITS | 9 Months Ended |
Sep. 30, 2021 | |
Renewable Energy Credits [Abstract] | |
RENEWABLE ENERGY CREDITS | RENEWABLE ENERGY CREDITS Starting late in 2020 and for the nine months ended September 30, 2021, the Company has significantly increased the use of coal refuse as the plant increased megawatt capacity. The plant was relatively dormant during the comparative periods ended September 30, 2020. As a result, the Company's usage of coal refuse, which is classified as a Tier II Alternative Energy Source under Pennsylvania law, significantly increased. DEBM acts as the benefactor, on behalf of the Company, in the open market and is invoiced as RECs are realized based on this open market measured by consumer demands. GAAP guidance is the costs held in inventory to then produce the credit are a compliance cost, and the proceeds should be a contra expense to offset operating costs when expensed. RECs offset against the costs of fuel operating costs were $(956,366) and $(18,837) for the three months ended September 30, 2021 and September 30, 2020 respectively. There was a similar offset of $(1,746,352) and $(18,837) for the nine months ended September 30, 2021 and September 30, 2020 respectively. |
ASPEN INTEREST (_OLYMPUS_) BUYO
ASPEN INTEREST (“OLYMPUS”) BUYOUT | 9 Months Ended |
Sep. 30, 2021 | |
Business Reorganization [Abstract] | |
ASPEN INTEREST (“OLYMPUS”) BUYOUT | ASPEN INTEREST (“OLYMPUS”) BUYOUT On April 1, 2021, Stronghold Inc., using in part 576,000 shares of newly issued Series A Preferred Stock and in part proceeds from the Series A Private Placement, acquired the Aspen Interest. The total consideration was a combination of the newly issued Series A Preferred Stock valued at the issuance price of $8.68 per share or $5,000,000; plus an additional $2,000,000 in cash. A total of $7,000,000 that is treated as a buyout of the Partners’ Deficits of the Limited Partner (i.e., Aspen Interest) as of April 1, 2021. The Partners’ Deficit of the Aspen Interest as of April 1, 2021: Limited Partners Balance - December 31, 2020 $ (1,336,784) Net losses - three months ended March 31, 2021 (71,687) Balance - April 1, 2021 (1,408,471) |
SUPPLEMENTAL CASH AND NON-CASH
SUPPLEMENTAL CASH AND NON-CASH INFORMATION | 9 Months Ended |
Sep. 30, 2021 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH AND NON-CASH INFORMATION | SUPPLEMENTAL CASH AND NON-CASH INFORMATION Supplementary cash flows disclosures as of September 30, 2021 and 2020: September 30, 2021 September 30, 2020 Equipment financed with debt $ 63,389,457 $ 1,025,675 Interest Paid $ 2,594,751 $ 106,881 Supplementary non-cash financing activities as of September 30, 2021 and 2020: September 30, 2021 September 30, 2020 Issued as part of equipment debt financing: Warrants $ 1,999,396 $ — Common Class A shares 1,389,888 — Warrants issued as part of stock registrations 780,472 — Series A redeemable and convertible preferred stock- Aspen Interest buyout 5,000,000 — Total $ 9,169,756 $ — |
TAX RECEIVABLE AGREEMENT
TAX RECEIVABLE AGREEMENT | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
TAX RECEIVABLE AGREEMENT | TAX RECEIVABLE AGREEMENTThe Company entered into a Tax Receivable Agreement (“TRA”) with Q Power and an agent named by Q Power on April 1, 2021, pursuant to which the Company will pay the TRA participants 85% of the realized (or, in certain circumstances, deemed realized) cash tax savings attributable to the tax basis step-ups arising from taxable exchanges of units and certain other items.No deferred tax asset or liability has been recorded with respect to the TRA because an exchange that triggers the benefit and compensation owed by the Company under the TRA (i.e., the redemption of Stronghold LLC Units for shares of Class A common stock or cash) has not happened yet. Estimating the amount and timing of Stronghold Inc.’s realization of tax benefits subject to the TRA is imprecise and unknown at this time and will vary based on a number of factors, including when redemptions actually occur. Accordingly, the Company does not record any deferred tax asset or any liability with respect to the TRA. |
PROVISIONS FOR INCOME TAXES
PROVISIONS FOR INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
PROVISIONS FOR INCOME TAXES | PROVISIONS FOR INCOME TAXESThe provision for income taxes for the nine months ended September 30, 2021 and twelve months ended December 31, 2020 were zero and zero, respectively, resulting in an effective income tax rate of zero for each period. The provisions for income taxes and effective income tax rate for the three months ended September 30, 2021 and 2020 were also zero and zero respectively. The difference between the statutory income tax rate of 21% and the Company’s effective tax rate for the nine months ended September 30, 2021 is primarily due to the impact of nontaxable entities in the structure and the valuation allowance against the Company’s net deferred tax assets. The difference between the statutory income tax rate of 21% and the Company’s effective tax rate for the twelve months ended December 31, 2020 was primarily due to the nontaxable entities in the structure. The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be utilized. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | OTHER CURRENT ASSETSAs of September 30, 2021, the Company had an other current assets balance of $3,779,663 comprised of deferred legal and professional fees related to the registration, issuance and sale by the Company of its Class A common stock, par value $.0001 per share, in its IPO (as defined below). |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIESAs of September 30, 2021, the accrued liabilities balance of $3,833,191 consisted of $3,823,636 in legal costs incurred but not yet invoiced to the Company, and $9,555 in real estate taxes on the low-cost, environmentally beneficial coal refuse power generation facility that we have upgraded in Scrubgrass Township, Pennsylvania (the "Scrubgrass Plant") to be paid in arrears. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Management has evaluated events and transactions subsequent to the balance sheet date through the date of this report (the date the financial statements were available to be issued) for potential recognition or disclosure in the financial statements. Except as disclosed in the following sections, management has not identified any items requiring recognition or disclosure Equipment Financing MinerVa On October 26, 2021, the Company made the final payment to MinerVa in the amount of $14,667,500; as per the equipment purchasing agreement dated April 2, 2021. Delivery of miners are per the timeframes discussed in Note 8 - Contingencies and Commitments. No shares of Class A common stock have been issued yet (as discussed in Note 14 - Stocks Issued Under Master Financing Agreements and Warrants). Bitmain Technologies Limited On October 28, 2021, the Company entered into the first of two Non-Fixed Price Sales and Purchase Agreement with Bitmain Technologies Limited ("Bitmain"). This first agreement covers six batches of 2,000 miners, or 12,000 in total, arriving on a monthly basis from April through September 2022. Each batch has an assigned purchase price that totals to $75,000,000, to be paid in three installments of 25%, 35% and 40% over the six-month delivery period. Per the Agreement, on October 29, 2021, the Company made a $23,300,000 payment comprised of the 25% installment payment plus 35% of the April 2022 batch of 2,000 miners that have an assigned purchase price of $13,000,000. On November 18, 2021, the Company made an additional payment of 35% or $4,550,000 towards the April 2022 batch of miners. On November 16, 2021, the Company entered into the second Non-Fixed Price Sales and Purchase Agreement with Bitmain. This second agreement covers six batches of 300 miners, or 1,800 in total, arriving on a monthly basis from July 2022 through December 2022. Each batch has an assigned purchase price that totals $19,350,000, to be paid in three installments of 35%, 35%, and 30% of the total purchase price over the six month delivery period. Per the second Non-Fixed Price Sales and Purchase Agreement, on November 18, 2021, the Company paid the first installment payment of 35% or $6,835,000. The miners purchased pursuant to the two agreements with Bitmain will have an aggregate hash rate capacity of approximately 1,450 PH/s. Nowlit Solutions Corp. The Company paid for two separate purchases of miners from Nowlit Solutions Corp (collectively, the "Nowlit Purchases"). The first purchase payment was made on November 23, 2021, in the amount of $1,605,360 for 190 miners. The second purchase payment was made on November 26, 2021, in the amount of $2,486,730 for an additional 295 miners. Luxor Technology Corporation The Company paid for three separate purchases of miners from Luxor Technology Corporation (collectively, the "Luxor Purchases"). The first purchase payment was made on November 26, 2021, in the amount of $4,312,650 for 770 miners. The second and third purchase payments were made on November 29, 2021, in the amount of $5,357,300 and $3,633,500 respectively; for an additional 750 and 500 miners. The Nowlit Purchases and the Luxor Purchases contain an aggregate hash rate capacity exceeding 200 PH/s. Acquisition On July 9, 2021, Stronghold LLC (“Buyer”) entered into a binding Equity and Capital Contribution Agreement for the Panther Creek Energy Facility (the "Panther Creek Plant"), a coal refuse power generation facility that the Company acquired November 2, 2021 (the "Panther Creek Acquisition"). The consideration for the Panther Creek Plant was approximately $3,000,000 of cash consideration and 1,152,000 Common Units in the Buyer. Effective November 2, 2021, this acquisition has been executed and closed. Hosting Services Agreement On August 17, 2021, Stronghold LLC entered into a Hosting Services Agreement with Northern Data PA, LLC ("Northern Data") whereby Northern Data will construct and operate a colocation data center facility located on the Scrubgrass Plant (as defined below) (the "Hosting Agreement"), the primary business purpose of which will be to provide hosting services and support cryptocurrency miners. In October 2021, the final deposit owed to Northern Data was paid, and Northern Data has started delivering the 9,900 miners committed in the Hardware and Purchase Agreement dated April 14, 2021. Once operational, after deducting an amount equal to $0.027 per kilowatt-hour for the actual power used, 65% of all cryptocurrency revenue generated by the miners shall be payable to the Company and 35% of all cryptocurrency revenue generated by the miners shall be payable to Northern Data or its designee. Stock Split On October 18, 2021, the Board and the holders of a majority of the outstanding shares of the Company's voting stock approved a 2.88-for-1 stock split of the Company's common stock, which the Company has also effected with the written consent of the majority stockholder (the "Stock Split"). The Company's outstanding share and per share amounts in these financial statements have been adjusted to give effect to the Stock Split as of the April 1, 2021 date of reorganization. The Stock Split was effected on October 22, 2021. New Long-Term Incentive Plan On October 19 , 2021, the Board and the stockholders of the Company approved a new long-term incentive plan (the “New LTIP”) for employees, consultants and directors. The New LTIP provides for the grant of options (including incentive stock options and non-qualified stock options), stock appreciation rights, RSUs, dividend equivalents, other stock-based awards, and substitute awards intended to align the interests of service providers, including our named executive officers, with those of our stockholders. Pursuant to the New LTIP, the remaining shares of Class A common stock under the LTIP as described in Note 13 – Stock-Based Compensation, that were reserved and available for delivery, were assumed and reserved for issuance under the New LTIP. As of the effective date of the New LTIP, the Company now grants all equity-based awards under the New LTIP. As of the date of this filing, two RSU grants have been awarded under the New LTIP. Initial Public Offering On October 19, 2021, by unanimous written consent, the Board and a newly formed Pricing Committee approved the issuance and sale by the Company of its Class A common stock, par value $.0001 per share, in an initial public offering (the "IPO") to be underwritten by a group of underwriters to be named in the underwriting agreement dated October 19, 2021, by and among the Company and B. Riley Securities, Inc. and Cowen and Company, LLC, as representatives of the other underwriters named therein (the "Underwriting Agreement"). The Board unanimously approved the issuance and sale by the Company in the IPO of up to 7,690,400 shares of Class A common stock (which includes 6,687,305 firm shares and up to 1,003,095 shares of Class A common Stock that may be issued and sold to cover over allotments, if any) through the Underwriters, for a price to the public per share of $19.00, less underwriting discounts and commissions of $1.33 per share, as more fully set forth in the Underwriting Agreement. Total net proceeds raised, after deducting underwriting discounts and commissions and estimated offering expenses, were $132.5 million. Amended and Restated Certificate of Incorporation On October 19, 2021, by written consent of the Majority Stockholder, the Company has proposed amending and restating the Company’s certificate of incorporation to read substantially in the form of the Second Amended and Restated Certificate of Incorporation of the Company (the "Restated Charter"). The Board has reviewed and declared that it is advisable and in the best interests of the Company and its stockholders to adopt and effect the Restated Charter; for which the Majority Stockholder has also approved and adopted. T he original Certificate of Incorporation of the Company was filed with the Secretary of State of the State of Delaware on March 19, 2021. The amended and restated certificate of incorporation was filed with the Secretary of State of the State of Delaware and became effective on April 1, 2021. The Restated Charter was filed with the Secretary of State of the State of Delaware and became effective on October 22, 2021. Commercial Premium Finance Agreement Effective October 21, 2021, the Company entered into a director and officer insurance policy with annual premiums totaling $6.9 million. The Company has executed a Commercial Premium Finance Agreement with AFCO Premium Credit LLC over a term of nine months, with an annual interest rate of 3.454%, that finances the payment of the total premiums owed. The agreement requires a $1.4 million down payment, with the remaining $5.5 million plus interest paid over nine months. Monthly payments of $621.3 thousand start November 21, 2021 and end July 21, 2022. O&M Agreement |
NATURE OF OPERATIONS AND SIGN_2
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the annual financial statements. These financial statements reflect the consolidated accounts of the Company and wholly owned subsidiaries. In addition, certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements in order to conform to current presentation. The Company operates on a calendar year basis with the first day of the calendar year being January 1, and the last day of the year ending on December 31. Additionally, since there are no differences between net income and comprehensive income, all references to comprehensive income have been excluded from the condensed consolidated financial statements. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash | Cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. The Company maintains its cash in non-interest bearing accounts that are insured by the Federal Deposit Insurance Company up to $250,000. The Company’s deposits may, from time to time, exceed the $250,000 limit; however, management believes that there is no unusual risk present, as the Company places its cash with financial institutions which management considers being of high quality. |
Digital Currencies | Digital currencies are included in current assets in the reported balance sheets. Digital currencies are recorded at cost less any impairment. Currently Bitcoin constitutes the only cryptocurrency the Company mines or holds in material amounts. An intangible asset with an indefinite useful life is not amortized but assessed for impairment quarterly as well as annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a |
Accounts Receivable | Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. An allowance for doubtful accounts is provided when necessary and is based upon management’s evaluation of outstanding accounts receivable at year end. The potential risk is limited to the amount recorded in the financial statements. |
Inventory | Waste coal, fuel oil and limestone are valued at the lower of average cost or net realizable value and includes all related transportation and handling costs. The Company performs periodic assessments to determine the existence of obsolete, slow-moving, and unusable inventory and records necessary provisions to reduce such inventories to net realizable value. Spare parts inventory is expensed when purchased. |
Derivative Contracts | In accordance with guidance on accounting for derivative instruments and hedging activities all derivatives should be recognized at fair value. Derivatives or any portion thereof, that are not designated as, and effective as, hedges must be adjusted to fair value through earnings. Derivative contracts are classified as either assets or liabilities on the accompanying combined balance sheets. Certain contracts that require physical delivery may qualify for and be designated as normal purchases/normal sales. Such contracts are accounted for on an accrual basis. The Company uses derivative instruments to mitigate its exposure to various energy commodity market risks. The Company does not enter into any derivative contracts or similar arrangements for speculative or trading purposes. The Company will, at times, sell its forward unhedged electricity capacity to stabilize its future operating margins. |
Fair Value Measurements | The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities; Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data; and Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
Property, Equipment and Cryptocurrency Machines | Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. The Company records all assets associated with the cryptocurrency hosting operations at cost. These assets are comprised of storage trailers and the related electrical components. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the remaining estimated useful lives (“EUL”) of the related assets using the straight-line method. The Company’s depreciation is based on its Facility being considered a single property unit. Certain components of the Facility may require replacement or overhaul several times over its estimated life. Costs associated with overhauls are recorded as an expense in the period incurred. However, in instances where a replacement of a Facility component is significant and the Company can reasonably estimate the original cost of the component being replaced, the Company will write-off the replaced component and capitalize the cost of the replacement. The component will be depreciated over the lesser of the EUL of the component or the remaining useful life of the Facility. The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of property and equipment may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of property and equipment. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property and equipment is used, and the effects of obsolescence, demand, competition, and other economic factors. Management has assessed the basis of depreciation of the Company’s cryptocurrency machines used to verify digital currency transactions and generate digital currencies and believes they should be depreciated over a two-year period. The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers, is influenced by a number of factors including the following: 1. The complexity of the transaction verification process which is driven by the algorithms contained within the Bitcoin open source software; 2. The general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as hashing capacity which is measured in Petahash units); and 3. Technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of digital assets generated as a function of operating costs, primarily power costs, (i.e., the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and a lower cost of purchase). The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of specialized equipment. Management has determined that two years best reflects the current expected useful life of transaction verification servers. This assessment takes into consideration the availability of historical data and management’s expectations regarding the direction of the industry including potential changes in technology. Management will review this estimate annually and will revise such estimate as and when data becomes available. To the extent that any of the assumptions underlying management’s estimate of useful life of its transaction verification servers are subject to revision in a future reporting period either as a result of changes in circumstances or through the availability of greater quantities of data then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets. |
Asset Retirement Obligations | Asset retirement obligations, including those conditioned on future events, are recorded at fair value in the period in which they are incurred, if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset in the same period. In each subsequent period, the liability is accreted to its present value and the capitalized cost is depreciated over the EUL of the long-lived asset. If the asset retirement obligation is settled for other than the carrying amount of the liability, the Company recognizes a gain or loss on settlement. The Company’s asset retirement obligation represents the cost the Company would incur to perform environmental clean-up or dismantle certain portions of the Facility. |
Revenue Recognition | The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of this revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1. Step 1: Identify the contract with the customer 2. Step 2: Identify the performance obligations in the contract 3. Step 3: Determine the transaction price 4. Step 4: Allocate the transaction price to the performance obligations in the contract 5. Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. There were no revenue streams with variable consideration during the nine months ended September 30, 2021 and 2020. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (the "FASB"), the Company may be required to change its policies, which could have an effect on the Company’s condensed consolidated financial position and results from operations. Fair value of the digital asset award received is determined using the quoted price of the related cryptocurrency at the time of receipt. The Company’s policies with respect to its revenue streams are detailed below. Energy Revenue The Company operates as a market participant through PJM Interconnection, a Regional Transmission Organization (“RTO”) that coordinates the movement of wholesale electricity. The Company sells energy in the wholesale generation market in the PJM RTO. Energy revenues are delivered as a series of distinct units that are substantially the same and that have the same pattern of transfer to the customer over time and are therefore accounted for as a distinct performance obligation. The transaction price is based on pricing published in the day ahead market which constitute the stand-alone selling price. Energy revenue is recognized over time as energy volumes are generated and delivered to the RTO (which is contemporaneous with generation), using the output method for measuring progress of satisfaction of the performance obligation. The Company applies the invoice practical expedient in recognizing energy revenue. Under the invoice practical expedient, energy revenue is recognized based on the invoiced amount which is considered equal to the value provided to the customer for the Company’s performance obligation completed to date. Reactive energy power is provided to maintain a continuous voltage level. Revenue from reactive power is recognized ratably over time as the Company stands ready to provide it if called upon by the PJM RTO. Capacity Revenue The Company provides capacity to a customer through participation in capacity auctions held by the PJM RTO. Capacity revenues are a series of distinct performance obligations that are substantially the same and that have the same pattern of transfer to the customer over time and are therefore accounted for as a distinct performance obligation. The transaction price for capacity is market-based and constitutes the stand-alone selling price. As capacity represents the Company’s stand-ready obligation, capacity revenue is recognized as the performance obligation is satisfied ratably over time, on a monthly basis, since the Company stands ready equally throughout the period to deliver power to the PJM RTO if called upon. The Company applies the invoice practical expedient in recognizing capacity revenue. Under the invoice practical expedient, capacity revenue is recognized based on the invoiced amount which is considered equal to the value provided to the customer for the Company’s performance obligation completed to date. Penalties may be assessed by the PJM RTO against generation facilities if the facility is not available during the capacity period. The penalties assessed by the PJM RTO, if any, are recorded as a reduction to capacity revenue when incurred. Cryptocurrency Hosting The Company has entered into customer hosting contracts whereby the Company provides electrical power to cryptocurrency mining customers, and the customers pay a stated amount per megawatt-hour (“MWh”) (“Contract Capacity”). This amount is paid monthly in advance. Amounts used in excess of the Contract Capacity are billed based upon calculated formulas as contained in the contracts. If any shortfalls occur to due to outages, make-whole payment provisions contained in the contracts are used to offset the billings to the customer which prevented them from cryptocurrency mining. Advanced payments and customer deposits are reflected as contract liabilities. Cryptocurrency Mining The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The terms of the agreement provide that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. |
Waste Coal Credits | Waste coal credits are issued by the Commonwealth of Pennsylvania. Facilities that generate electricity by using coal refuse for power generation, control acid gases for emission control, and use the ash produced to reclaim mining-affected sites are eligible for such credits. Income related to these credits is recorded upon cash receipt and within other income. Renewable Energy Credits (“RECs”) |
Stock Based Compensation | For equity-classified awards, compensation expense is recognized over the requisite service period based on the computed fair value on the grant date of the award. Equity classified awards include the issuance of stock options and restricted stock units (“RSUs”). |
Notes Payable | The Company records notes payable net of any discounts or premiums. Discounts and premiums are amortized as interest expense or income over the life of the note in such a way as to result in a constant rate of interest when applied to the amount outstanding at the beginning of any given period. |
Warrant Liabilities | The Company records warrant liabilities at their fair value as of the balance sheet date, and recognizes changes in the balances, over the comparative periods of either the issuance date or the last reporting date, as part of changes in fair value of warrant liabilities expense. |
Segments | Accounting guidance establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in financial reports issued to stockholders. The Company has reorganized into two operating segments, which consist of Energy Operations and Cryptocurrency Operations. |
Mezzanine Equity | Redeemable Preferred Stock The Preferred Stock is reported as a mezzanine obligation between liabilities and stockholders’ equity due to certain redemption features being outside the control of the Company. See Note 15 – Mezzanine Equity. Common Stock – Class V The Common Stock – Class V shares (as described in Note 15 – Mezzanine Equity) is reported as a mezzanine obligation between liabilities and stockholders’ equity due to certain redemption features being outside the control of the Company. The Company accounts for the 68.9% interest represented by the Class V common stock as mezzanine equity as a result of certain redemption rights held by the holders thereof as discussed in "Note 15 – Mezzanine Equity." As such, the Company adjusts mezzanine equity to its maximum redemption amount at the balance sheet date, if higher than the carrying amount. The redemption amount is based a third-party valuation methodology of the Company’s Class A common stock at the end of the reporting period. Changes in the redemption value are recognized immediately as they occur, as if the end of the reporting period was also the redemption date for the instrument, with an offsetting entry to accumulated deficits. |
Loss per share | Basic net (loss) income per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding or shares subject to exercise for a nominal value during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. |
Income Taxes | Reorganization Upon completion of the Reorganization, the Company is organized as an “Up-C” structure in which substantially all of the assets and business of the consolidated Company are held by Stronghold Inc. through its subsidiaries, and the Company’s direct assets largely consist of cash and investments in subsidiaries. For income tax purposes, the portion of the Company’s earnings allocable to Stronghold Inc. is subject to corporate level tax rates at the federal and state levels. Therefore, the income taxes recorded prior to the Reorganization are not representative of the income taxes after the Reorganization. Stronghold Inc. and its indirectly owned corporate subsidiaries, Clearfield and Leechburg, account for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. Based on the Company’s evaluation and application of ASC Topic 740, Income Taxes (“ASC 740”), the Company has determined that the utilization of the deferred tax assets is not more likely than not, and therefore the Company has recorded a valuation allowance against the net deferred tax assets of the Company as well as Clearfield and Leechburg. Factors contributing to this assessment are the Company’s cumulative and current losses, as well as the evaluation of other sources of income as outlined in ASC 740. The Company continues to evaluate the likelihood of the utilization of deferred tax assets, and while the valuation allowance remains in place, we expect to record no income tax expense or benefit. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position. Stronghold Inc.’s subsidiaries Scrubgrass and SDM are structured as flow-through entities; and therefore the taxable income or loss of Scrubgrass and SDM is included in the income tax returns of the partners, including Stronghold Inc. Application of ASC 740 to these entities results in no recognition of federal or state income taxes at the entity level. The portion of Scrubgrass and SDM’s activities that are allocable to the Company will increase the Company’s taxable income or loss and be accounted for under ASC 740 at the Company. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position. Although the Company has not filed a corporate tax return, the basis of tax positions applied to our tax provisions substantially comply with applicable federal and state tax regulations, and we acknowledge the respective taxing authorities may take contrary positions based on their interpretation of the law. A tax position successfully challenged by a taxing authority could result in an adjustment to our provision or benefit for income taxes in the period in which a final determination is made. Prior to the Reorganization Scrubgrass and Stronghold were structured as a limited partnership and limited liability company, respectively; therefore the taxable income or loss of the Company is included in the income tax returns of the individual partners. Accordingly, no recognition has been given to federal or state income taxes in the accompanying financial statements. Scrubgrass' two subsidiaries, Clearfield and Leechburg, are corporations for federal and state income tax purposes. Income taxes attributable to Clearfield and Leechburg are provided based on the asset and liability method of accounting pursuant to the Income Taxes Topic of FASB ASC 740. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all, of the deferred tax asset will not be realized. Clearfield and Leechburg have not recorded any temporary differences resulting in either a deferred tax asset or liability as of December 31, 2020. Clearfield and Leechburg follow the Accounting for Uncertainty in Income Taxes Sub-Topic of FASB ASC 740 which governs the accounting for uncertainty in income taxes. Pursuant to this Sub-Topic, a tax position can be recognized in the financial statements only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured as the largest amount of benefit that will more likely than not be realized upon settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements. Clearfield and Leechburg did not recognize an impact under this Sub-Topic for the years ending December 31, 2020. As of December 31, 2020, the tax years ended December 31, 2017 through 2020 are open for potential examination by taxing authorities. |
NATURE OF OPERATIONS AND SIGN_3
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Activities of Digital Currencies | The following table presents the activities of the digital currencies for the nine months ended September 30, 2021 and the year ended December 31, 2020: September 30, 2021 December 31, 2020 (unaudited) Digital currencies at beginning of year $ 228,087 $ 15,436 Additions of digital currencies 3,901,426 339,456 Realized gain (loss) on sale of digital currencies 149,858 31,810 Impairments (466,286) — Proceeds from Sale of digital currencies (584,387) (158,615) Digital currencies at month ending $ 3,228,698 $ 228,087 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following components as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 (unaudited) Waste coal $ 304,202 $ 342,476 Fuel oil 49,508 33,243 Limestone 13,891 21,173 TOTALS $ 367,601 $ 396,892 |
EQUIPMENT DEPOSITS (Tables)
EQUIPMENT DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Equipment Deposits | Vendor Model Count Delivery Timeframe Total Commitments Unpaid [A] Equipment Deposits MinerVa MinerVA 15,000 Oct ‘21 - Dec '21 $ 73,387,500 (14,677,500) 58,710,000 Cryptech Bitmain 2,400 Nov ‘21 - Oct ‘22 12,660,000 (7,807,000) 4,853,000 Northern Data MicroBT 9,900 Oct ‘21 - Nov '21 22,061,852 — 22,061,852 Totals 27,300 $ 108,109,352 $ (22,484,500) $ 85,624,852 Remaining Purchase Price $ 12,660,000 April 2021 - 30% $ (3,798,000) # Date After down payment $ 8,862,000 1 05/01/21 $ (211,000) $ 8,651,000 3 06/01/21 $ (211,000) $ 8,440,000 4 07/01/21 $ (211,000) $ 8,229,000 5 08/01/21 $ (211,000) $ 8,018,000 6 09/01/21 $ (211,000) $ 7,807,000 7 10/01/21 $ (738,500) $ 7,068,500 8 11/01/21 $ (738,500) $ 6,330,000 9 12/01/21 $ (738,500) $ 5,591,500 10 01/01/22 $ (738,500) $ 4,853,000 11 02/01/22 $ (738,500) $ 4,114,500 12 03/01/22 $ (738,500) $ 3,376,000 13 04/01/22 $ (738,500) $ 2,637,500 14 05/01/22 $ (527,500) $ 2,110,000 15 06/01/22 $ (527,500) $ 1,582,500 15 07/01/22 $ (527,500) $ 1,055,000 16 08/01/22 $ (527,500) $ 527,500 17 09/01/22 $ (527,500) $ — The following are the outstanding future commitments still owed as of September 30, 2021: Vendor Model Count Delivery Timeframe Future Payments < 1 year 2 years 3-5 years MinerVa MinerVA 15,000 Oct ‘21 - Jan '21 $ 14,677,500 $ 14,677,500 $ — $ — Cryptech Bitmain 2,400 Nov ‘21 - Oct ‘22 7,807,000 7,807,000 — — Totals 17,400 $ 22,484,500 $ 22,484,500 $ — $ — |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following as of September 30, 2021 and December 31, 2020: Useful Lives (Years) September 30, 2021 Dec 31, 2020 (unaudited) Electric Plant 60 $ 30,288,979 $ 30,288,979 Power Transformers 30 2,162,386 — Machinery and equipment 5 - 20 5,436,333 2,862,736 Cryptocurrency Machines & Powering Supplies 2 - 3 6,387,432 — Computer hardware and software 3 - 5 4,236 5,062 Vehicles & Trailers 5 - 7 81,733 81,733 Construction in progress Not Depreciable 25,157,279 1,544,536 Asset retirement obligation 5 79,848 79,848 69,598,226 34,862,894 Accumulated depreciation and amortization (29,483,439) (27,048,695) TOTALS $ 40,114,787 $ 7,814,199 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term debt consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 Dec 31, 2020 $66,076 loan for equipment with monthly payments of $1,537 with interest at 5.55%, due July 2021. $ 7,582 $ 16,440 $75,000 loan for equipment with monthly payments of $2,489 with interest at 12.67%, due April 2021. 7,312 14,934 $142,000 loan for equipment with monthly payments of $4,620 with interest at 11.21%, due April 2021. — 18,056 $70,000 loan for equipment with monthly payments of $2,300 with interest at 11.92%, due April 2021. — 8,974 $499,520 loan for equipment with monthly payments of $8,863 with interest at 2.49% due December 2023. 257,376 333,599 $499,895 loan for equipment with monthly payments of $11,054 with interest at 2.95% due July 2023. 277,908 371,490 $212,675 loan for equipment with monthly payments of $7,239 with interest at 6.75% due October 2022. 123,600 168,397 $40,000,000 loan for equipment with monthly payments of $1,845,747 with interest at 10.00% due June 2023. 35,424,692 [A] — $10,641,362 loan for equipment with monthly payments of $491,045 with interest at 10.00% due June 2023. 9,424,174 [B] — $14,077,800 loan for equipment with monthly payments of $649,619 with interest at 10.00% due June 2023. 12,467,543 [C] — 57,990,187 931,890 Less current portions, deferred costs, & discounts Outstanding loan 31,251,305 449,447 Deferred debt issuance costs 1,355,285 — Discounts from issuance of stock 1,216,152 — Discounts from issuance of warrants 1,749,472 — $ 22,417,973 $ 482,443 [A] The WhiteHawk Promissory Note has a term of twenty-four months. Refer to Note 14 – Stock Issued Under Financing Agreements and Warrants for further discussions. [B] Arctos/NYDIG Financing Agreement [loan #1] with a term of twenty-four months. Refer to Note 14 - Stock Issued Under Financing Agreements and Warrants for further discussions. |
Future Scheduled Maturities on the Outstanding Borrowings | Future scheduled maturities on the outstanding borrowings for each of the next three years as of September 30, 2021 are as follows: Years ending December 31: 2021 $ 7,780,702 2022 32,620,394 2023 17,589,091 $ 57,990,187 |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding Future Commitments | Vendor Model Count Delivery Timeframe Total Commitments Unpaid [A] Equipment Deposits MinerVa MinerVA 15,000 Oct ‘21 - Dec '21 $ 73,387,500 (14,677,500) 58,710,000 Cryptech Bitmain 2,400 Nov ‘21 - Oct ‘22 12,660,000 (7,807,000) 4,853,000 Northern Data MicroBT 9,900 Oct ‘21 - Nov '21 22,061,852 — 22,061,852 Totals 27,300 $ 108,109,352 $ (22,484,500) $ 85,624,852 Remaining Purchase Price $ 12,660,000 April 2021 - 30% $ (3,798,000) # Date After down payment $ 8,862,000 1 05/01/21 $ (211,000) $ 8,651,000 3 06/01/21 $ (211,000) $ 8,440,000 4 07/01/21 $ (211,000) $ 8,229,000 5 08/01/21 $ (211,000) $ 8,018,000 6 09/01/21 $ (211,000) $ 7,807,000 7 10/01/21 $ (738,500) $ 7,068,500 8 11/01/21 $ (738,500) $ 6,330,000 9 12/01/21 $ (738,500) $ 5,591,500 10 01/01/22 $ (738,500) $ 4,853,000 11 02/01/22 $ (738,500) $ 4,114,500 12 03/01/22 $ (738,500) $ 3,376,000 13 04/01/22 $ (738,500) $ 2,637,500 14 05/01/22 $ (527,500) $ 2,110,000 15 06/01/22 $ (527,500) $ 1,582,500 15 07/01/22 $ (527,500) $ 1,055,000 16 08/01/22 $ (527,500) $ 527,500 17 09/01/22 $ (527,500) $ — The following are the outstanding future commitments still owed as of September 30, 2021: Vendor Model Count Delivery Timeframe Future Payments < 1 year 2 years 3-5 years MinerVa MinerVA 15,000 Oct ‘21 - Jan '21 $ 14,677,500 $ 14,677,500 $ — $ — Cryptech Bitmain 2,400 Nov ‘21 - Oct ‘22 7,807,000 7,807,000 — — Totals 17,400 $ 22,484,500 $ 22,484,500 $ — $ — |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Coal purchases under this agreement for the three and nine months ended September 30, 2021 and September 30, 2020 are as follows: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Coal Purchases: Coal Valley Sales, LLC 252,917 — 631,416 — TOTALS $ 252,917 $ — $ 631,416 $ — Amounts due to related parties as of September 30, 2021 and December 31, 2020: September 30, 2021 Dec 31, 2020 Payables: Coal Valley Properties, LLC $ — $ 188,338 Q Power LLC 510,000 510,000 Coal Valley Sales, LLC 225,618 — TOTALS $ 735,618 $ 698,338 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Reportable segment results for the three and nine months ending September 30, 2021 and September 30, 2020 are as follows: Three Months Ended, Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Operating Revenues Energy Operations $ 3,459,468 $ 818,796 $ 8,262,646 $ 2,906,858 Cryptocurrency Operations 2,560,245 141,226 5,643,669 221,455 Total Operating Revenues $ 6,019,713 $ 960,022 $ 13,906,315 $ 3,128,313 Net Operating Income/(Loss) Energy Operations $ (2,757,306) $ (809,043) $ (5,907,069) $ (1,706,052) Cryptocurrency Operations (1,188,726) 86,436 (2,046,007) 173,391 Net Operating Income/(Loss) $ (3,946,032) $ (722,607) $ (7,953,076) $ (1,532,661) Other Income, net (a) $ (2,333,997) $ 40,233 $ (1,808,918) $ 1,208,901 Net Income/(Loss) $ (6,280,029) $ (682,374) $ (9,761,994) $ (323,760) Depreciation and Amortization Energy Operations $ (149,426) $ (139,150) $ (430,965) $ (422,603) Cryptocurrency Operations (1,008,948) — (2,032,584) — Total Depreciation & Amortization $ (1,158,374) $ (139,150) $ (2,463,549) $ (422,603) Interest Expense Energy Operations $ (22,264) $ (32,381) $ (90,570) $ (106,881) Cryptocurrency Operations (2,438,404) — (2,504,181) — Total Interest Expense $ (2,460,668) $ (32,381) $ (2,594,751) $ (106,881) (a) The Company does not allocate other income, net for segment reporting purposes. Amount is shown as a reconciling item between net operating income/(losses) and consolidated income before taxes. Refer to consolidated statement of operations for the three and nine months ended September 30, 2021 and 2020 for further details. Energy Operations Cryptocurrency Total (unaudited) (unaudited) Cash $ 583,039 $ 40,851,371 $ 41,434,410 Cryptocurrencies — 3,228,698 3,228,698 Accounts receivable 256,104 52,283 308,387 Prepaid Insurance 139,269 139,269 278,538 Due from related party — — — Inventory 367,601 — 367,601 Other current assets 1,889,831 1,889,832 3,779,663 Equipment Deposits — 85,624,852 85,624,852 Property, plant and equipment, net 5,404,263 34,710,524 40,114,787 Land 29,919 — 29,919 Road Bond 185,245 — 185,245 $ 8,855,271 $ 166,496,829 $ 175,352,100 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following has been adjusted for the stock split effected on October 18, 2021: September 30, 2021 Weighted-average fair value of options granted $ 5.21 Expected volatility 117.64 % Expected life (in years) 5.79 Risk-free interest rate 0.90 % Expected dividend yield 0.00 % |
Schedule of Stock Options Roll Forward | The following table summarizes the stock option activity (as adjusted) under the plans for the nine months ended September 30, 2021: Number of Shares Weighted- Average Exercise Price Expected Term Weighted- Average Remaining Contract Price Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2021 — $ — — $ — Granted 3,430,843 $ 8.91 9.86 $ 5.22 $ — Exercised — $ — — $ — Cancelled/forfeited — $ — — $ — Outstanding at September 30, 2021 3,430,843 $ 8.91 9.86 $ 5.22 $ — Shares vested and expected to vest 3,430,843 $ 8.91 9.86 $ 5.22 $ — Exercisable as of September 30, 2021 90,081 $ 7.53 9.79 $ 5.17 $ — Exercisable as of December 31, 2020 — $ — — $ — |
STOCK ISSUED UNDER MASTER FIN_2
STOCK ISSUED UNDER MASTER FINANCING AGREEMENTS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Black Scholes Input Assumptions | The following are the Black-Scholes input assumptions for the 97,920 Series A warrants; and the changes in fair values as of April 1, 2021 (date of issuance) and September 30, 2021 respectively: Three months ended September 30, 2021 Nine months ended September 30, 2021 As of Changes in As of Changes in June 30, 2021 September 30, 2021 April 1, 2021 September 30, 2021 Expected volatility 100.2 % 117.6 % 17.4 % 100.2 % 117.6 % 17.4 % Expected life (in years) 4.83 4.83 0 4.83 4.83 0 Risk-free interest rate 0.9 % 1.0 % 0.1 % 0.9 % 1.0 % 0.1 % Expected dividend yield 0.00 % 0.00 % 0.0 % 0.00 % 0.00 % 0.0 % Fair value $ 825,350 $ 745,023 $ (80,327) $ 631,897 $ 745,023 $ 113,126 The following are the Black-Scholes input assumptions for the 18,170 Series B warrants; and the changes in fair values as of May 14, 2021 (date of issuance) and September 30, 2021 respectively: Three months ended September 30, 2021 Nine months ended September 30, 2021 As of Changes in Fair Value Inputs As of Changes in Fair Value Inputs June 30, 2021 September 30, 2021 May 14, 2021 September 30, 2021 Expected volatility 100.2 % 117.6 % 17.4 % 100.2 % 117.6 % 17.4 % Expected life (in years) 4.8 4.8 0 4.8 4.8 0 Risk-free interest rate 0.9 % 1.0 % 0.1 % 0.8 % 1.0 % 0.2 % Expected dividend yield 0.00 % 0.00 % 0.0 % 0.00 % 0.00 % 0.0 % Fair value $ 146,599 $ 133,947 $ (12,652) $ 148,575 $ 133,947 $ (14,628) |
MEZZANINE EQUITY (Tables)
MEZZANINE EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Net Mezzanine Equity | The following is a summary of the Series A and Series B valuations: Series A Series B Proceeds $ 85,000,000 $ 20,000,305 Transaction Fees (1) : B. Riley Securities (5,100,000) (1,200,000) Vinson & Elkins L.L.P. (1,226,990) (408,997) Debt issuance costs pertaining to stock registration warrants - refer to Note 14 (631,897) (148,575) Total net mezzanine equity $ 78,041,113 $ 18,242,733 _______________ (1) – consists of registration and placement fees The Company recorded Mezzanine Equity as presented in the table below: Non- controlling Interest(1) Series A Series B Common - Class V Preferred Shares Amount Preferred Shares Amount Shares Amount Total Balance - July 1, 2021 $ — 9,792,000 $ 78,041,113 1,817,035 $ 18,242,733 27,057,600 $ 167,661,249 $ 263,945,094 Net losses for the three months ended September 30, 2021................................................................ (4,328,460) — — — — — — (4,328,460) Maximum redemption right valuation.................. 4,328,460 — — — — — 75,341,142 79,669,602 Balance - September 30, 2021 $ — 9,792,000 $ 78,041,113 1,817,035 $ 18,242,733 27,057,600 $ 243,002,391 $ 339,286,236 Non- controlling Interest(1) Series A Series B Common - Class V Preferred Shares Amount Preferred Shares Amount Shares Amount Total Balance - December 31, 2020 $ (2,710,323) — $ — — $ — — $ — $ (2,710,323) Net loss - January 1 to March 31, 2021 (167,261) — — — — — — (167,261) Balance prior to the reorganization on April 1, 2021 (2,877,584) (2,877,584) Effect of reorganizations (see Note 1) Exchange of common shares - Class V — — — — 27,072,000 — Issuance of Series A convertible redeemable preferred units — 9,792,000 78,673,010 — — — — 78,673,010 Warrants issued as part of stock registrations - refer to Note 14 — — (631,897) — — — — (631,897) Exchange of common units for Class A common shares — — — — — (14,400) — Issuance of Series B convertible redeemable preferred units — — — 1,817,035 18,391,308 — — 18,391,308 Warrants issued as part of stock registrations - refer to Note 14 — — — — (148,576) — — (148,576) Net losses for the six months ended September 30, 2021 (6,563,677) — — — — — — (6,563,677) Maximum redemption right valuation 9,441,261 243,002,391 252,443,652 Balance- September 30, 2021 $ — 9,792,000 $ 78,041,113 1,817,035 $ 18,242,733 27,057,600 $ 243,002,391 $ 339,286,236 _______________ 1 Refer to Note 16- Non-controlling Interest for further discussions |
NON-CONTROLLING INTEREST (Table
NON-CONTROLLING INTEREST (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Schedule of Noncontrolling Ownership Interest | The following summarizes the mezzanine equity adjustments pertaining to the non-controlling interest from April 1, 2021 through September 30, 2021: Mezzanine Equity Adjustments Balance- April 1, 2021 (1) $ (2,877,584) Net losses for the three months ended June 30, 2021 (2,235,219) Maximum redemption right valuation (2) 172,774,052 Balance- June 30, 2021 $ 167,661,249 Net losses for the three months ended September 30, 2021 (4,328,460) Adjustment of mezzanine equity to redemption amount (3) 79,669,602 Balance- September 30, 2021 $ 243,002,391 1 As of the date of reorganization- refer to Note 1 2 Based on 27,057,600 Common Class V shares outstanding at $6.39 issuance price as of April 1, 2021 3 Based on 27,057,600 Common Class V shares outstanding at $9.33 fair valuation price as of September 30, 2021 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock after the date of the reorganization on April 1, 2021. Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 July 1 to September 30, 2021 April 1 to September 30, 2021 Numerator Net Loss (1) $ (6,280,029) $ (9,523,046) Less; net losses attributable to non-controlling interests $ (4,328,460) $ (6,563,677) Net loss attributable to Class A common shareholders $ (1,951,569) $ (2,959,369) Denominator Weighted average shares of Class A common shares outstanding (2) 322,342 173,532 Basic net loss per share $ (6.05) $ (17.05) __________________ (1) Basic and diluted earnings per share of Class A common stock is presented only for the period after the Company’s Reorganization Transactions. As such, net loss used in the calculation represents the loss during the three months ending September 30, 2021 (July 1 through September 30, 2021); and for the nine months ended September 30, 2021 (April 1, 2021 through September 30, 2021). (2) Includes 181,647 in warrants that have an nominal exercise price and is a common stock equivalent for earnings per share purposes. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Securities that could potentially dilute losses per share in the future that were not included in the computation of diluted loss per share at September 30, 2021 because their inclusion would be anti-dilutive are as follows: September 30, 2021 Warrants to purchase convertible preferred stock 116,090 Class V common shares not yet exchanged for Class A common shares 27,057,600 Convertible Series A preferred shares 10,368,000 Convertible Series B preferred shares 1,817,035 Total 39,358,725 |
ASPEN INTEREST (_OLYMPUS_) BU_2
ASPEN INTEREST (“OLYMPUS”) BUYOUT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Reorganization [Abstract] | |
Partners' Deficit of Aspen Interest | The Partners’ Deficit of the Aspen Interest as of April 1, 2021: Limited Partners Balance - December 31, 2020 $ (1,336,784) Net losses - three months ended March 31, 2021 (71,687) Balance - April 1, 2021 (1,408,471) |
SUPPLEMENTAL CASH AND NON-CAS_2
SUPPLEMENTAL CASH AND NON-CASH INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplementary cash flows disclosures as of September 30, 2021 and 2020: September 30, 2021 September 30, 2020 Equipment financed with debt $ 63,389,457 $ 1,025,675 Interest Paid $ 2,594,751 $ 106,881 Supplementary non-cash financing activities as of September 30, 2021 and 2020: September 30, 2021 September 30, 2020 Issued as part of equipment debt financing: Warrants $ 1,999,396 $ — Common Class A shares 1,389,888 — Warrants issued as part of stock registrations 780,472 — Series A redeemable and convertible preferred stock- Aspen Interest buyout 5,000,000 — Total $ 9,169,756 $ — |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) | May 14, 2021USD ($)shares | Apr. 01, 2021USD ($)$ / sharesshares | Mar. 31, 2021asubsidiary | Sep. 24, 2020owner | Feb. 12, 2020 | Sep. 30, 2021USD ($)subsidiaryshares | Sep. 30, 2020USD ($) |
Preferred Units [Line Items] | |||||||
Shares issued in business reorganization (in shares) | 576,000 | ||||||
Payment for business reorganization | $ | $ 2,000,000 | $ 2,000,000 | $ 0 | ||||
Consideration transferred | $ | 7,000,000 | ||||||
Equity interest issued value | $ | $ 5,000,000 | ||||||
Issuance price (in dollars per share) | $ / shares | $ 8.68 | ||||||
Shares exchanged (in shares) | 14,400 | ||||||
Common stock outstanding (in shares) | 140,674 | ||||||
Convertible Series A preferred shares | Private Placement | |||||||
Preferred Units [Line Items] | |||||||
Stock issued and sold during period (in shares) | 9,792,000 | ||||||
Sale of stock (in USD per share) | $ / shares | $ 8.68 | ||||||
Sale of stock, consideration received | $ | $ 85,000,000 | ||||||
Payments of fees | $ | 6,300,000 | ||||||
Payments of debt issuance costs | $ | $ 631,897 | ||||||
Convertible Series B preferred shares | Private Placement | |||||||
Preferred Units [Line Items] | |||||||
Stock issued and sold during period (in shares) | 1,817,035 | ||||||
Sale of stock, consideration received | $ | $ 20,000,305 | ||||||
Payments of fees | $ | 1,600,000 | ||||||
Payments of debt issuance costs | $ | $ 148,575 | ||||||
Stronghold LLC | |||||||
Preferred Units [Line Items] | |||||||
Shares exchanged in business reorganization (in shares) | 14,400 | ||||||
Q Power LLC | |||||||
Preferred Units [Line Items] | |||||||
Shares exchanged (in shares) | 14,400 | ||||||
Q Power LLC | Common - Class V | |||||||
Preferred Units [Line Items] | |||||||
Common stock outstanding (in shares) | 27,057,600 | ||||||
Q Power LLC | Common Class A | |||||||
Preferred Units [Line Items] | |||||||
Common stock outstanding (in shares) | 14,400 | ||||||
Stronghold LLC | |||||||
Preferred Units [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 31.00% | ||||||
Q Power LLC | |||||||
Preferred Units [Line Items] | |||||||
Ownership interest per member | 50.00% | ||||||
Number of owners | owner | 2 | ||||||
Q Power LLC | Stronghold LLC | |||||||
Preferred Units [Line Items] | |||||||
Shares received in business reorganization (in shares) | 27,072,000 | ||||||
Q Power LLC | Scrubgrass LP | |||||||
Preferred Units [Line Items] | |||||||
Ownership interest | 70.00% | ||||||
Q Power LLC | Stronghold Inc. | |||||||
Preferred Units [Line Items] | |||||||
Common stock, ownership percentage | 69.00% | ||||||
Q Power LLC | Stronghold LLC | |||||||
Preferred Units [Line Items] | |||||||
Ownership interest | 68.90% | 68.90% | |||||
Q Power LLC | Stronghold Power LLC | |||||||
Preferred Units [Line Items] | |||||||
Ownership interest | 100.00% | ||||||
Aspen Scrubgrass Participant LLC | Scrubgrass LP | |||||||
Preferred Units [Line Items] | |||||||
Ownership interest | 30.00% | ||||||
Stronghold Inc. | Stronghold LLC | Common - Class V | |||||||
Preferred Units [Line Items] | |||||||
Shares exchanged in business reorganization (in shares) | 27,072,000 | ||||||
Stronghold LLC | |||||||
Preferred Units [Line Items] | |||||||
Conversion ratio | 100.00% | ||||||
Stronghold LLC | Stronghold Inc. | |||||||
Preferred Units [Line Items] | |||||||
Shares exchanged in business reorganization (in shares) | 10,368,000 | ||||||
Limited partners' capital units outstanding (in shares) | 14,400 | ||||||
Preferred units outstanding (in shares) | 10,368,000 | ||||||
Stronghold LLC | Q Power LLC | |||||||
Preferred Units [Line Items] | |||||||
Common unit outstanding (in shares) | 27,057,600 | ||||||
Stronghold LLC | Q Power LLC | Common - Class V | |||||||
Preferred Units [Line Items] | |||||||
Shares distributed in business reorganization (in shares) | 27,072,000 | ||||||
Scrubgrass Generating Company, L.P. | |||||||
Preferred Units [Line Items] | |||||||
Number of subsidiaries | subsidiary | 2 | 2 | |||||
Clearfield Properties, Inc. | |||||||
Preferred Units [Line Items] | |||||||
Area of land (in acres) | a | 175 |
NATURE OF OPERATIONS AND SIGN_4
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES - Nature of Operations (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)renewalTerm | |
Principal Transaction Revenue [Line Items] | |
Contract with supplier, number of renewal terms | renewalTerm | 3 |
Reported energy revenue, percentage | 100.00% |
Direct Energy Business Marketing LLC (DEBM) | |
Principal Transaction Revenue [Line Items] | |
Payments to suppliers, monthly amount | $ | $ 7,500 |
NATURE OF OPERATIONS AND SIGN_5
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES - Cash and Digital Currencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Indefinite-lived Intangible Assets [Roll Forward] | |||||
Realized gain (loss) on sale of digital currencies | $ 0 | $ 3,662 | $ 149,858 | $ 4,941 | |
Impairments | (91,040) | $ 0 | (466,286) | 0 | |
Digital currencies | |||||
Indefinite-lived Intangible Assets [Roll Forward] | |||||
Digital currencies at beginning of year | 228,087 | $ 15,436 | $ 15,436 | ||
Additions of digital currencies | 3,901,426 | 339,456 | |||
Realized gain (loss) on sale of digital currencies | 149,858 | 31,810 | |||
Impairments | (91,040) | (466,286) | 0 | ||
Proceeds from Sale of digital currencies | (584,387) | (158,615) | |||
Digital currencies at month ending | $ 3,228,698 | $ 3,228,698 | $ 228,087 |
NATURE OF OPERATIONS AND SIGN_6
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable, Cryptocurrency Machines (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Accounts receivable, allowance for credit loss, writeoff | $ 150,162 | $ 150,162 | |
Accounts receivable, allowance for credit loss | $ 0 | $ 0 | $ 0 |
Settlement terms dispute, term | 35 days | ||
Cryptocurrency machines | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | two |
NATURE OF OPERATIONS AND SIGN_7
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES - Segments, Mezzanine Equity and Loss per Share (Details) | Apr. 01, 2021 | Sep. 30, 2021segmentshares | Dec. 31, 2020shares |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of operating segments | segment | 2 | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 39,358,725 | 0 | |
Stronghold LLC | Q Power LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership interest | 68.90% | 68.90% |
NATURE OF OPERATIONS AND SIGN_8
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - subsidiary | Sep. 30, 2021 | Mar. 31, 2021 |
Scrubgrass Generating Company, L.P. | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of subsidiaries | 2 | 2 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Waste coal | $ 304,202 | $ 342,476 |
Fuel oil | 49,508 | 33,243 |
Limestone | 13,891 | 21,173 |
TOTALS | $ 367,601 | $ 396,892 |
EQUIPMENT DEPOSITS - Narrative
EQUIPMENT DEPOSITS - Narrative (Details) | 9 Months Ended | |
Sep. 30, 2021minervendor | Apr. 01, 2021miner_equipmentminer | |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Number of vendors | vendor | 3 | |
Number of miners | 27,300 | |
Miner Equipment, Cryptech, Bitmain | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Number of miners | 2,400 | 2,400 |
Number of miners per month | 200 | 200 |
EQUIPMENT DEPOSITS - Schedule o
EQUIPMENT DEPOSITS - Schedule of Equipment Deposits (Details) | Sep. 30, 2021USD ($)miner | Sep. 01, 2021USD ($) | Aug. 01, 2021USD ($) | Jul. 01, 2021USD ($) | Jun. 01, 2021USD ($) | May 01, 2021USD ($) | Apr. 14, 2021miner | Apr. 02, 2021USD ($) | Apr. 02, 2021miner | Apr. 02, 2021segment | Apr. 02, 2021miner_equipment | Apr. 01, 2021USD ($)miner_equipment | Dec. 31, 2020USD ($) |
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||
Count | miner | 27,300 | ||||||||||||
Total Commitments | $ 108,109,352 | ||||||||||||
Unpaid | (22,484,500) | ||||||||||||
Equipment Deposits | $ 85,624,852 | $ 0 | |||||||||||
MinerVa, MinerVA | |||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||
Count | 15,000 | 15,000 | 15,000 | 15,000 | |||||||||
Total Commitments | $ 73,387,500 | $ 73,387,500 | |||||||||||
Unpaid | (14,677,500) | ||||||||||||
Equipment Deposits | $ 58,710,000 | ||||||||||||
Cryptech, Bitmain | |||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||
Count | 2,400 | 2,400 | |||||||||||
Total Commitments | $ 12,660,000 | $ 7,807,000 | $ 8,018,000 | $ 8,229,000 | $ 8,440,000 | $ 8,651,000 | 8,862,000 | $ 12,660,000 | |||||
Unpaid | (7,807,000) | $ (8,862,000) | |||||||||||
Equipment Deposits | $ 4,853,000 | ||||||||||||
Northern Data, MicroBT | |||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||
Count | miner | 9,900 | 9,900 | |||||||||||
Total Commitments | $ 22,061,852 | ||||||||||||
Unpaid | 0 | ||||||||||||
Equipment Deposits | $ 22,061,852 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | $ 1,158,374 | $ 139,150 | $ 2,463,549 | $ 422,603 | |
Property, Plant And Equipment, Excluding Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 69,598,226 | 69,598,226 | $ 34,862,894 | ||
Accumulated depreciation and amortization | (29,483,439) | (29,483,439) | (27,048,695) | ||
TOTALS | 40,114,787 | $ 40,114,787 | 7,814,199 | ||
Electric Plant | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 60 years | ||||
Property, Plant and Equipment, Gross | 30,288,979 | $ 30,288,979 | 30,288,979 | ||
Power Transformers | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 30 years | ||||
Property, Plant and Equipment, Gross | 2,162,386 | $ 2,162,386 | 0 | ||
Machinery and Equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 5,436,333 | $ 5,436,333 | 2,862,736 | ||
Machinery and Equipment | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 5 years | ||||
Machinery and Equipment | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 20 years | ||||
Cryptocurrency Machines & Powering Supplies | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 6,387,432 | $ 6,387,432 | 0 | ||
Cryptocurrency Machines & Powering Supplies | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 2 years | ||||
Cryptocurrency Machines & Powering Supplies | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 3 years | ||||
Computer Hardware and Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 4,236 | $ 4,236 | 5,062 | ||
Computer Hardware and Software | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 3 years | ||||
Computer Hardware and Software | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 5 years | ||||
Vehicles and Trailers | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 81,733 | $ 81,733 | 81,733 | ||
Vehicles and Trailers | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 5 years | ||||
Vehicles and Trailers | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 7 years | ||||
Construction in Progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 25,157,279 | $ 25,157,279 | 1,544,536 | ||
Asset Retirement Obligation | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Lives (in years) | 5 years | ||||
Property, Plant and Equipment, Gross | $ 79,848 | $ 79,848 | $ 79,848 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 57,990,187 | $ 931,890 |
Outstanding loan | 31,251,305 | 449,447 |
Deferred debt issuance costs | 1,355,285 | 0 |
Discounts from issuance of stock | 1,216,152 | 0 |
Discounts from issuance of warrants | 1,749,472 | 0 |
Long-term debt less current portions, deferred costs, & discounts | 22,417,973 | 482,443 |
Loans payable | $66,076 loan for equipment with monthly payments of $1,537 with interest at 5.55%, due July 2021. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 66,076 | |
Monthly payments | $ 1,537 | |
Interest rate | 5.55% | |
Long-term debt, gross | $ 7,582 | 16,440 |
Loans payable | $75,000 loan for equipment with monthly payments of $2,489 with interest at 12.67%, due April 2021. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 75,000 | |
Monthly payments | $ 2,489 | |
Interest rate | 12.67% | |
Long-term debt, gross | $ 7,312 | 14,934 |
Loans payable | $142,000 loan for equipment with monthly payments of $4,620 with interest at 11.21%, due April 2021. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 142,000 | |
Monthly payments | $ 4,620 | |
Interest rate | 11.21% | |
Long-term debt, gross | $ 0 | 18,056 |
Loans payable | $70,000 loan for equipment with monthly payments of $2,300 with interest at 11.92%, due April 2021. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 70,000 | |
Monthly payments | $ 2,300 | |
Interest rate | 11.92% | |
Long-term debt, gross | $ 0 | 8,974 |
Loans payable | $499,520 loan for equipment with monthly payments of $8,863 with interest at 2.49% due December 2023. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 499,520 | |
Monthly payments | $ 8,863 | |
Interest rate | 2.49% | |
Long-term debt, gross | $ 257,376 | 333,599 |
Loans payable | $499,895 loan for equipment with monthly payments of $11,054 with interest at 2.95% due July 2023. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 499,895 | |
Monthly payments | $ 11,054 | |
Interest rate | 2.95% | |
Long-term debt, gross | $ 277,908 | 371,490 |
Loans payable | $212,675 loan for equipment with monthly payments of $7,239 with interest at 6.75% due October 2022. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 212,675 | |
Monthly payments | $ 7,239 | |
Interest rate | 6.75% | |
Long-term debt, gross | $ 123,600 | 168,397 |
Loans payable | $40,000,000 loan for equipment with monthly payments of $1,845,747 with interest at 10.00% due June 2023. | ||
Debt Instrument [Line Items] | ||
Debt face amount | 40,000,000 | |
Monthly payments | $ 1,845,747 | |
Interest rate | 10.00% | |
Long-term debt, gross | $ 35,424,692 | 0 |
Long-term debt, term | 24 months | |
Loans payable | $10,641,362 loan for equipment with monthly payments of $491,045 with interest at 10.00% due June 2023. | ||
Debt Instrument [Line Items] | ||
Debt face amount | $ 10,641,362 | |
Monthly payments | $ 491,045 | |
Interest rate | 10.00% | |
Long-term debt, gross | $ 9,424,174 | 0 |
Long-term debt, term | 24 months | |
Loans payable | $14,077,800 loan for equipment with monthly payments of $649,619 with interest at 10.00% due June 2023. | ||
Debt Instrument [Line Items] | ||
Debt face amount | $ 14,077,800 | |
Monthly payments | $ 649,619 | |
Interest rate | 10.00% | |
Long-term debt, gross | $ 12,467,543 | $ 0 |
Long-term debt, term | 24 months |
LONG-TERM DEBT - Future Schedul
LONG-TERM DEBT - Future Scheduled Maturities on the Outstanding Borrowings (Details) | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 7,780,702 |
2022 | 32,620,394 |
2023 | 17,589,091 |
Long-term debt | $ 57,990,187 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - miner | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Concentration Risk [Line Items] | ||||
Number of miners | 27,300 | 27,300 | ||
Revenue | Direct Energy Business Marketing LLC (DEBM) | Customer Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 100.00% | 100.00% | ||
Accounts receivable | Direct Energy Business Marketing LLC (DEBM) | Customer Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 91.00% | 38.00% | ||
Purchased Coal | Related Party Concentration Risk | Related Party One | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 44.00% | |||
Purchased Coal | Related Party Concentration Risk | Related Party Two | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 99.00% |
CONTINGENCIES AND COMMITMENTS -
CONTINGENCIES AND COMMITMENTS - Narrative (Details) terahash in Millions | Sep. 01, 2022USD ($) | Aug. 01, 2022USD ($) | Jul. 01, 2022USD ($) | Jun. 01, 2022USD ($) | May 01, 2022USD ($) | Apr. 01, 2022USD ($) | Mar. 01, 2022USD ($) | Feb. 01, 2022USD ($) | Jan. 01, 2022USD ($) | Dec. 01, 2021USD ($) | Nov. 01, 2021USD ($) | Oct. 26, 2021USD ($) | Oct. 01, 2021USD ($) | Sep. 01, 2021USD ($) | Aug. 01, 2021USD ($) | Jul. 01, 2021USD ($) | Jun. 02, 2021USD ($) | Jun. 01, 2021USD ($) | May 01, 2021USD ($) | Apr. 30, 2021USD ($) | Apr. 02, 2021USD ($)miner | Apr. 01, 2021USD ($)miner_equipmentminerinstallment | Sep. 30, 2021USD ($)minerinstallment | Sep. 30, 2022installment | Jan. 31, 2022miner | Dec. 31, 2021miner | Nov. 30, 2021miner | Oct. 31, 2021miner | Apr. 02, 2021USD ($) | Apr. 02, 2021terahash | Apr. 02, 2021 | Apr. 02, 2021segment | Apr. 02, 2021miner_equipment |
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Number of miners | miner | 27,300 | ||||||||||||||||||||||||||||||||
Remaining commitment balance | $ 108,109,352 | ||||||||||||||||||||||||||||||||
Unpaid amount | $ 22,484,500 | ||||||||||||||||||||||||||||||||
Number of installments | installment | 17 | ||||||||||||||||||||||||||||||||
Subsequent Event | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Purchases | $ 738,500 | ||||||||||||||||||||||||||||||||
Miner Equipment, MinerVa, MinerVA | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Number of miners | 15,000 | 15,000 | 15,000 | 15,000 | |||||||||||||||||||||||||||||
Total terahash delivered by miner (in terahash) | terahash | 1.5 | ||||||||||||||||||||||||||||||||
Price per miner (in dollars per miner) | $ 4,892.5 | ||||||||||||||||||||||||||||||||
Remaining commitment balance | $ 73,387,500 | 73,387,500 | |||||||||||||||||||||||||||||||
Percentage of purchase price | 20.00% | 20.00% | 60.00% | ||||||||||||||||||||||||||||||
Purchases | $ 14,677,500 | $ 44,032,500 | |||||||||||||||||||||||||||||||
Unpaid amount | $ 14,677,500 | ||||||||||||||||||||||||||||||||
Miner Equipment, MinerVa, MinerVA | Subsequent Event | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Number of miners | miner | 2,500 | ||||||||||||||||||||||||||||||||
Purchases | $ 14,667,500 | ||||||||||||||||||||||||||||||||
Miner Equipment, MinerVa, MinerVA | Forecast | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Number of miners | miner | 2,500 | 5,000 | 5,000 | ||||||||||||||||||||||||||||||
Hardware, Nowlit Solutions Corp | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Remaining commitment balance | $ 0 | ||||||||||||||||||||||||||||||||
Purchases | $ 5,657,432 | ||||||||||||||||||||||||||||||||
Miner Equipment, Cryptech, Bitmain | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Number of miners | 2,400 | 2,400 | |||||||||||||||||||||||||||||||
Remaining commitment balance | $ 7,807,000 | $ 8,018,000 | $ 8,229,000 | $ 8,440,000 | $ 8,651,000 | $ 12,660,000 | $ 12,660,000 | 8,862,000 | |||||||||||||||||||||||||
Percentage of purchase price | 30.00% | 70.00% | |||||||||||||||||||||||||||||||
Purchases | $ 211,000 | $ 211,000 | $ 211,000 | $ 211,000 | $ 211,000 | $ 3,798,000 | $ 1,055,000 | ||||||||||||||||||||||||||
Unpaid amount | $ 7,807,000 | $ 8,862,000 | |||||||||||||||||||||||||||||||
Number of miners per month | miner | 200 | 200 | |||||||||||||||||||||||||||||||
Number of installments | installment | 5 | ||||||||||||||||||||||||||||||||
Miner Equipment, Cryptech, Bitmain | Subsequent Event | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Purchases | $ 738,500 | ||||||||||||||||||||||||||||||||
Unpaid amount | $ 6,330,000 | $ 7,068,500 | |||||||||||||||||||||||||||||||
Miner Equipment, Cryptech, Bitmain | Forecast | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Unpaid amount | $ 0 | $ 527,500 | $ 1,055,000 | $ 1,582,500 | $ 2,110,000 | $ 2,637,500 | $ 3,376,000 | $ 4,114,500 | $ 4,853,000 | $ 5,591,500 | |||||||||||||||||||||||
Miner Equipment, Cryptech, Bitmain | Forecast | Subsequent Event | |||||||||||||||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||||||||||||||||||
Purchases | $ 527,500 | $ 527,500 | $ 527,500 | $ 527,500 | $ 527,500 | $ 738,500 | $ 738,500 | $ 738,500 | $ 738,500 | $ 738,500 | |||||||||||||||||||||||
Number of installments | installment | 12 |
CONTINGENCIES AND COMMITMENTS_2
CONTINGENCIES AND COMMITMENTS - Installments Remaining (Details) - USD ($) | Sep. 01, 2022 | Aug. 01, 2022 | Jul. 01, 2022 | Jun. 01, 2022 | May 01, 2022 | Apr. 01, 2022 | Mar. 01, 2022 | Feb. 01, 2022 | Jan. 01, 2022 | Dec. 01, 2021 | Nov. 01, 2021 | Oct. 01, 2021 | Sep. 01, 2021 | Aug. 01, 2021 | Jul. 01, 2021 | Jun. 01, 2021 | May 01, 2021 | Apr. 01, 2021 | Sep. 30, 2021 | Apr. 02, 2021 |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||||||||||||||
Total Commitments | $ 108,109,352 | |||||||||||||||||||
Unpaid amount | $ 22,484,500 | |||||||||||||||||||
Subsequent Event | ||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||||||||||||||
Purchases | $ (738,500) | |||||||||||||||||||
Miner Equipment, Cryptech, Bitmain | ||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||||||||||||||
Percentage of purchase price | 30.00% | 70.00% | ||||||||||||||||||
Total Commitments | $ 7,807,000 | $ 8,018,000 | $ 8,229,000 | $ 8,440,000 | $ 8,651,000 | $ 12,660,000 | $ 12,660,000 | $ 8,862,000 | ||||||||||||
Purchases | $ (211,000) | $ (211,000) | $ (211,000) | $ (211,000) | $ (211,000) | $ (3,798,000) | (1,055,000) | |||||||||||||
Unpaid amount | $ 7,807,000 | $ 8,862,000 | ||||||||||||||||||
Miner Equipment, Cryptech, Bitmain | Forecast | ||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||||||||||||||
Unpaid amount | $ 0 | $ 527,500 | $ 1,055,000 | $ 1,582,500 | $ 2,110,000 | $ 2,637,500 | $ 3,376,000 | $ 4,114,500 | $ 4,853,000 | $ 5,591,500 | ||||||||||
Miner Equipment, Cryptech, Bitmain | Subsequent Event | ||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||||||||||||||
Purchases | $ (738,500) | |||||||||||||||||||
Unpaid amount | $ 6,330,000 | $ 7,068,500 | ||||||||||||||||||
Miner Equipment, Cryptech, Bitmain | Subsequent Event | Forecast | ||||||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||||||||||||||||
Purchases | $ (527,500) | $ (527,500) | $ (527,500) | $ (527,500) | $ (527,500) | $ (738,500) | $ (738,500) | $ (738,500) | $ (738,500) | $ (738,500) |
CONTINGENCIES AND COMMITMENTS_3
CONTINGENCIES AND COMMITMENTS - Outstanding Future Commitments (Details) | Sep. 30, 2021USD ($)miner | Apr. 02, 2021miner | Apr. 02, 2021USD ($) | Apr. 02, 2021segment | Apr. 02, 2021miner_equipment | Apr. 01, 2021miner_equipment |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||
Number of miners | miner | 27,300 | |||||
Future Payments | $ 22,484,500 | |||||
Less than 1 year | 22,484,500 | |||||
2 years | 0 | |||||
3-5 years | $ 0 | |||||
Miner Equipment, Minerva Miner VA And Cryptech Bitmain | ||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||
Number of miners | miner | 17,400 | |||||
MinerVa, MinerVA | ||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||
Number of miners | 15,000 | 15,000 | 15,000 | 15,000 | ||
Future Payments | $ 14,677,500 | |||||
Less than 1 year | 14,677,500 | |||||
2 years | 0 | |||||
3-5 years | $ 0 | |||||
Cryptech, Bitmain | ||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||
Number of miners | 2,400 | 2,400 | ||||
Future Payments | $ 7,807,000 | $ 8,862,000 | ||||
Less than 1 year | 7,807,000 | |||||
2 years | 0 | |||||
3-5 years | $ 0 |
RELATED-PARTY TRANSACTIONS - Na
RELATED-PARTY TRANSACTIONS - Narrative (Details) | May 10, 2021USD ($) | May 09, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($)$ / TownerT | Sep. 30, 2020USD ($) |
Related Party Transaction [Line Items] | ||||||||
Repayments of related party debt | $ 2,024,250 | $ 0 | ||||||
Coal Valley Properties, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of owners | owner | 1 | |||||||
Q Power LLC | Coal Reclamation Partnership | ||||||||
Related Party Transaction [Line Items] | ||||||||
Ownership percentage by noncontrolling owners | 16.26% | 16.26% | 16.26% | 16.26% | ||||
Affiliated Entity | Notes Payable, Other Payables | William Spence And Greg Beard | ||||||||
Related Party Transaction [Line Items] | ||||||||
Repayments of related party debt | $ 2,093,018 | |||||||
Affiliated Entity | Waste Coal Agreement (the “WCA”) | Coal Valley Sales, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Waste coal annual quantity committed (in ton) | T | 200,000 | |||||||
Waste coal, handling fee (in USD per ton) | $ / T | 6.07 | |||||||
Waste coal commitment, units in excess of annual commitment, price per unit (in USD per ton) | $ / T | 1 | |||||||
Waste coal commitment, monthly payments | $ 25,000 | |||||||
Waste coal commitment, semi-monthly minimum payments | $ 51,000 | |||||||
Affiliated Entity | Management Services Agreement | William Spence | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses from transactions with related party | $ 150,000 | $ 450,000 | ||||||
Affiliated Entity | Management Services Agreement | Q Power LLC | William Spence | ||||||||
Related Party Transaction [Line Items] | ||||||||
Monthly management fee | $ 50,000 | $ 25,000 | ||||||
Chief Executive Officer | Beard Aviation LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses from transactions with related party | $ 49,000 | $ 69,000 |
RELATED-PARTY TRANSACTIONS - Re
RELATED-PARTY TRANSACTIONS - Related Party Purchases (Details) - Affiliated Entity - Waste Coal Agreement (the “WCA”) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Related Party Transaction [Line Items] | ||||
Coal purchases from related party | $ 252,917 | $ 0 | $ 631,416 | $ 0 |
Coal Valley Sales, LLC | ||||
Related Party Transaction [Line Items] | ||||
Coal purchases from related party | $ 252,917 | $ 0 | $ 631,416 | $ 0 |
RELATED-PARTY TRANSACTIONS - Am
RELATED-PARTY TRANSACTIONS - Amounts Due to Related Parties (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 735,618 | $ 698,338 |
Affiliated Entity | Coal Valley Properties, LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 188,338 |
Affiliated Entity | Q Power LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 510,000 | 510,000 |
Affiliated Entity | Coal Valley Sales, LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 225,618 | $ 0 |
PAYCHECK PROTECTION PROGRAM L_2
PAYCHECK PROTECTION PROGRAM LOAN, ECONOMIC INJURY DISASTER LOAN (Details) - Loans payable - USD ($) | Jun. 08, 2021 | Mar. 16, 2021 | Jan. 31, 2021 |
Round 2, Paycheck Protection Program, CARES Act | |||
Debt Instrument [Line Items] | |||
Proceeds from issuance of debt | $ 841,670 | ||
Interest rate | 1.00% | ||
Debt instrument term | 5 years | ||
Round 1, Paycheck Protection Program, CARES Act | |||
Debt Instrument [Line Items] | |||
Forgiveness for loan | $ 638,800 | ||
Economic Injury Disaster Loan (“EIDL”) | |||
Debt Instrument [Line Items] | |||
Repayment of debt | $ 150,000 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT REPORTING - Results fro
SEGMENT REPORTING - Results from Operating Segments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | |||||
Operating Revenues | $ 6,019,713 | $ 960,022 | $ 13,906,315 | $ 3,128,313 | |
Net Operating Income/(Loss) | (3,946,032) | (722,607) | (7,953,076) | (1,532,661) | |
Total other income / (expense) | (2,333,997) | 40,233 | (1,808,918) | 1,208,901 | |
NET INCOME/(LOSS) | (6,280,029) | (682,374) | $ (9,523,046) | (9,761,994) | (323,760) |
Depreciation and Amortization | (1,158,374) | (139,150) | (2,463,549) | (422,603) | |
Interest Expense | (2,460,668) | (32,381) | (2,594,751) | (106,881) | |
Energy Operations | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 3,459,468 | 818,796 | 8,262,646 | 2,906,858 | |
Net Operating Income/(Loss) | (2,757,306) | (809,043) | (5,907,069) | (1,706,052) | |
Depreciation and Amortization | (149,426) | (139,150) | (430,965) | (422,603) | |
Interest Expense | (22,264) | (32,381) | (90,570) | (106,881) | |
Cryptocurrency Operations | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 2,560,245 | 141,226 | 5,643,669 | 221,455 | |
Net Operating Income/(Loss) | (1,188,726) | 86,436 | (2,046,007) | 173,391 | |
Depreciation and Amortization | (1,008,948) | 0 | (2,032,584) | 0 | |
Interest Expense | $ (2,438,404) | $ 0 | $ (2,504,181) | $ 0 |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of Assets, Operating Segments (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Assets | $ 175,352,100 | $ 9,362,314 |
Cash | 41,434,410 | 303,187 |
Digital currencies | 3,228,698 | 228,087 |
Accounts receivable | 308,387 | 65,900 |
Prepaid Insurance | 278,538 | 0 |
Due from related party | 0 | 302,973 |
Inventory | 367,601 | 396,892 |
Other current assets | 3,779,663 | 65,831 |
Equipment Deposits | 85,624,852 | 0 |
Property, plant and equipment, net | 40,114,787 | 7,814,199 |
Land | 29,919 | 0 |
Road Bond | 185,245 | 185,245 |
TOTAL ASSETS | 175,352,100 | $ 9,362,314 |
Energy Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 8,855,271 | |
Cash | 583,039 | |
Digital currencies | 0 | |
Accounts receivable | 256,104 | |
Prepaid Insurance | 139,269 | |
Due from related party | 0 | |
Inventory | 367,601 | |
Other current assets | 1,889,831 | |
Equipment Deposits | 0 | |
Property, plant and equipment, net | 5,404,263 | |
Land | 29,919 | |
Road Bond | 185,245 | |
TOTAL ASSETS | 8,855,271 | |
Cryptocurrency Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 166,496,829 | |
Cash | 40,851,371 | |
Digital currencies | 3,228,698 | |
Accounts receivable | 52,283 | |
Prepaid Insurance | 139,269 | |
Due from related party | 0 | |
Inventory | 0 | |
Other current assets | 1,889,832 | |
Equipment Deposits | 85,624,852 | |
Property, plant and equipment, net | 34,710,524 | |
Land | 0 | |
Road Bond | 0 | |
TOTAL ASSETS | $ 166,496,829 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Apr. 28, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cost not yet recognized | $ 15,222,666 | $ 15,222,666 | ||
Stock compensation expense | $ 976,528 | 1,246,460 | ||
Stock compensation expense, tax benefit | $ 0 | |||
Outstanding share options (in shares) | 3,430,843 | 3,430,843 | 0 | |
Share-based Payment Arrangement, Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 3,744,000 | |||
Expiration period from grant date | 10 years | |||
Expected dividend yield | 0.00% | |||
Cost not yet recognized, period for recognition | 9 years 10 months 9 days |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Valuation Assumptions (Details) - Share-based Payment Arrangement, Option | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average fair value of options granted (in USD per share) | $ 5.21 |
Expected volatility | 117.64% |
Expected life (in years) | 5 years 9 months 14 days |
Risk-free interest rate | 0.90% |
Expected dividend yield | 0.00% |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Number of Shares | ||
Outstanding at January 1 2021 (in shares) | 0 | |
Granted (in shares) | 3,430,843 | |
Outstanding at September 30, 2021 (in shares) | 3,430,843 | |
Shares vested and expected to vest (in shares) | 3,430,843 | |
Exercisable as of September 30 2021 (in shares) | 90,081 | |
Exercisable as of December 31 2020 (in shares) | 0 | |
Weighted- Average Exercise Price | ||
Outstanding at January 1, 2020 (in USD per share) | $ 0 | |
Granted (in USD per share) | 8.91 | |
Outstanding at September 30, 2021 (in USD per share) | 8.91 | |
Shares vested and expected to vest (in USD per share) | 8.91 | |
Exercisable as of September 30, 2021 (in USD per share) | 7.53 | |
Exercisable as of December 31, 2020 (in USD per share) | $ 0 | |
Expected Term | ||
Granted | 9 years 10 months 9 days | |
Outstanding at September 30, 2021 | 9 years 10 months 9 days | |
Shares vested and expected to vest | 9 years 10 months 9 days | |
Exercisable as of September 30, 2021 | 9 years 9 months 14 days | |
Weighted- Average Remaining Contract Price | ||
Outstanding at January 1, 2021 (in USD per share) | $ 5.22 | $ 0 |
Granted (in USD per share) | 5.22 | |
Shares vested and expected to vest (in USD per share) | 5.22 | |
Exercisable as of September 30 2021 (in USD per share) | 5.17 | |
Exercisable as of December 30 2020 (in USD per share) | $ 0 | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding at January 1, 2021 | $ 0 | |
Granted | 0 | |
Outstanding at September 30, 2021 | 0 | |
Shares vested and expected to vest | 0 | |
Exercisable as of September 30, 2021 | 0 | |
Exercisable as of December 31, 2020 | $ 0 |
STOCK ISSUED UNDER MASTER FIN_3
STOCK ISSUED UNDER MASTER FINANCING AGREEMENTS AND WARRANTS - Narrative (Details) $ / shares in Units, terahash in Millions | Jul. 02, 2021USD ($)loan | Jun. 30, 2021USD ($) | Jun. 25, 2021USD ($)shares | May 14, 2021USD ($)$ / sharesshares | Apr. 02, 2021minershares | Apr. 01, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)miner$ / shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)miner$ / shares | Sep. 30, 2021USD ($)miner$ / sharesshares | Sep. 30, 2020USD ($) | Apr. 02, 2021terahash | Apr. 02, 2021segment | Apr. 02, 2021miner_equipment | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from equipment financing agreement | $ 24,157,178 | $ 24,157,178 | $ 0 | ||||||||||||
Number of miners | miner | 27,300 | 27,300 | 27,300 | ||||||||||||
Warrants issued with conversions to redeemable preferred stock | $ 878,970 | $ 878,970 | $ 878,970 | $ 0 | |||||||||||
Fair value | 878,970 | $ 878,970 | 878,970 | $ 0 | |||||||||||
Changes in fair value of warrant liabilities | $ (92,979) | $ 0 | $ 98,498 | $ 0 | |||||||||||
MinerVa, MinerVA | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of miners | 15,000 | 15,000 | 15,000 | 15,000 | 15,000 | 15,000 | |||||||||
Total terahash delivered by miner (in terahash) | terahash | 1.5 | ||||||||||||||
Number of shares issuable | shares | 443,848 | ||||||||||||||
Arctos Credit LLC (NYDIG) | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
New issues (in shares) | shares | 126,274 | ||||||||||||||
WhiteHawk Finance LLC | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds from issuance of warrants | $ 40,000,000 | ||||||||||||||
WhiteHawk Finance LLC | Note Warrant | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued with conversions to redeemable preferred stock | 1,999,396 | ||||||||||||||
Fair value | $ 1,999,396 | ||||||||||||||
B. Riley Securities, Inc. | Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Expected life (in years) | 5 years | ||||||||||||||
Common Class A | WhiteHawk Finance LLC | Note Warrant | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | shares | 181,705 | ||||||||||||||
Expected life (in years) | 10 years | 10 years | 10 years | ||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||
Convertible Series A preferred shares | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Expected life (in years) | 4 years 9 months 29 days | 4 years 9 months 29 days | 4 years 9 months 29 days | 4 years 9 months 29 days | 4 years 9 months 29 days | ||||||||||
Warrants issued with conversions to redeemable preferred stock | $ 825,350 | $ 631,897 | $ 745,023 | $ 745,023 | $ 745,023 | ||||||||||
Fair value | $ 825,350 | 631,897 | 745,023 | 745,023 | 745,023 | ||||||||||
Warrant issued | $ 631,897 | $ 631,897 | |||||||||||||
Changes in fair value of warrant liabilities | $ (80,327) | $ 113,126 | |||||||||||||
Convertible Series A preferred shares | Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | shares | 9,792,000 | ||||||||||||||
Convertible Series A preferred shares | B. Riley Securities, Inc. | Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
New issues (in shares) | shares | 439,200 | ||||||||||||||
Warrants issued during period (in shares) | shares | 97,920 | ||||||||||||||
Expected life (in years) | 5 years | ||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 8.68 | ||||||||||||||
Convertible Series B preferred shares | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Expected life (in years) | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days | ||||||||||
Warrants issued with conversions to redeemable preferred stock | $ 146,599 | $ 148,575 | $ 133,947 | $ 133,947 | $ 133,947 | ||||||||||
Fair value | $ 146,599 | 148,575 | 133,947 | 133,947 | 133,947 | ||||||||||
Warrant issued | $ 148,575 | 148,576 | |||||||||||||
Changes in fair value of warrant liabilities | (12,652) | (14,628) | |||||||||||||
Convertible Series B preferred shares | Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | shares | 1,817,035 | ||||||||||||||
Convertible Series B preferred shares | B. Riley Securities, Inc. | Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
New issues (in shares) | shares | 91,619 | ||||||||||||||
Warrants issued during period (in shares) | shares | 18,170 | ||||||||||||||
Expected life (in years) | 5 years | ||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 11.01 | ||||||||||||||
Arctos Credit LLC (NYDIG) | Loans payable | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt face amount | $ 34,481,700 | ||||||||||||||
Number of loans received | loan | 2 | ||||||||||||||
Interest rate | 10.00% | ||||||||||||||
Unamortized debt discounts | 1,389,888 | 1,389,888 | 1,389,888 | ||||||||||||
Amortization of debt discount | 173,736 | ||||||||||||||
Standby fee percentage | 1.75% | ||||||||||||||
Unused borrowings | $ 10,256,922 | ||||||||||||||
Standby fee expense | 208,816 | 208,816 | |||||||||||||
Loan for equipment due June 2023, one | Loans payable | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt face amount | $ 40,000,000 | $ 40,000,000 | $ 40,000,000 | ||||||||||||
Interest rate | 10.00% | 10.00% | 10.00% | ||||||||||||
Amortization of debt discount | $ 249,925 | ||||||||||||||
Long-term debt, term | 24 months | 24 months | 24 months |
STOCK ISSUED UNDER MASTER FIN_4
STOCK ISSUED UNDER MASTER FINANCING AGREEMENTS AND WARRANTS - Schedule of Valuation Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2021USD ($) | May 14, 2021USD ($)shares | Apr. 01, 2021USD ($)shares | Dec. 31, 2020USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Fair value | $ 878,970 | $ 878,970 | $ 0 | |||||
Changes in fair value of warrant liabilities | $ (92,979) | $ 0 | $ 98,498 | $ 0 | ||||
Convertible Series A preferred shares | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Expected life (in years) | 4 years 9 months 29 days | 4 years 9 months 29 days | 4 years 9 months 29 days | 4 years 9 months 29 days | ||||
Change in expected life (in years) | 0 days | 0 days | ||||||
Fair value | $ 745,023 | $ 745,023 | $ 825,350 | $ 631,897 | ||||
Changes in fair value of warrant liabilities | $ (80,327) | $ 113,126 | ||||||
Convertible Series A preferred shares | Expected volatility | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants, measurement input | 1.176 | 1.176 | 1.002 | 1.002 | ||||
Changes in Fair Value Inputs | 17.40% | 17.40% | ||||||
Convertible Series A preferred shares | Risk-free interest rate | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants, measurement input | 0.010 | 0.010 | 0.009 | 0.009 | ||||
Changes in Fair Value Inputs | 0.10% | 0.10% | ||||||
Convertible Series A preferred shares | Expected dividend yield | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants, measurement input | 0 | 0 | 0 | 0 | ||||
Changes in Fair Value Inputs | 0.00% | 0.00% | ||||||
Convertible Series B preferred shares | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Expected life (in years) | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days | ||||
Change in expected life (in years) | 0 days | 0 days | ||||||
Fair value | $ 133,947 | $ 133,947 | $ 146,599 | $ 148,575 | ||||
Changes in fair value of warrant liabilities | $ (12,652) | $ (14,628) | ||||||
Convertible Series B preferred shares | Expected volatility | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants, measurement input | 1.176 | 1.176 | 1.002 | 1.002 | ||||
Changes in Fair Value Inputs | 17.40% | 17.40% | ||||||
Convertible Series B preferred shares | Risk-free interest rate | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants, measurement input | 0.010 | 0.010 | 0.009 | 0.008 | ||||
Changes in Fair Value Inputs | 0.10% | 0.20% | ||||||
Convertible Series B preferred shares | Expected dividend yield | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants, measurement input | 0 | 0 | 0 | 0 | ||||
Changes in Fair Value Inputs | 0.00% | 0.00% | ||||||
B. Riley Securities, Inc. | Private Placement | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Expected life (in years) | 5 years | |||||||
B. Riley Securities, Inc. | Convertible Series A preferred shares | Private Placement | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants issued during period (in shares) | shares | 97,920 | |||||||
Expected life (in years) | 5 years | |||||||
B. Riley Securities, Inc. | Convertible Series B preferred shares | Private Placement | ||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||
Warrants issued during period (in shares) | shares | 18,170 | |||||||
Expected life (in years) | 5 years |
MEZZANINE EQUITY - Narrative (D
MEZZANINE EQUITY - Narrative (Details) | May 14, 2021USD ($)shares | Apr. 01, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / shares | Jun. 30, 2021USD ($) | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2021USD ($)vote$ / shares |
Temporary Equity [Line Items] | ||||||
Shares exchanged (in shares) | shares | 14,400 | |||||
Mezzanine equity, net of non-controlling interest | $ 172,774,000 | $ 339,286,236 | $ 339,286,236 | $ 339,286,236 | ||
Maximum redemption right valuation | 79,669,602 | $ 172,774,052 | 252,443,652 | |||
Stronghold LLC | ||||||
Temporary Equity [Line Items] | ||||||
Number of votes | vote | 1 | |||||
Q Power LLC | Stronghold LLC | ||||||
Temporary Equity [Line Items] | ||||||
Ownership interest | 68.90% | 68.90% | ||||
Q Power LLC | ||||||
Temporary Equity [Line Items] | ||||||
Shares exchanged (in shares) | shares | 14,400 | |||||
Stronghold LLC | ||||||
Temporary Equity [Line Items] | ||||||
Shares exchanged in business reorganization (in shares) | shares | 14,400 | |||||
Convertible Series A preferred shares | ||||||
Temporary Equity [Line Items] | ||||||
Mezzanine equity, net of non-controlling interest | 78,041,113 | 78,041,113 | $ 78,041,113 | |||
Convertible Series A preferred shares | Private Placement | ||||||
Temporary Equity [Line Items] | ||||||
Stock issued and sold during period (in shares) | shares | 9,792,000 | |||||
Sale of stock (in USD per share) | $ / shares | $ 8.68 | |||||
Sale of stock, consideration received | $ 85,000,000 | |||||
Payments of fees | 6,300,000 | |||||
Payments of debt issuance costs | $ 631,897 | |||||
Convertible Series B preferred shares | ||||||
Temporary Equity [Line Items] | ||||||
Mezzanine equity, net of non-controlling interest | $ 18,242,733 | $ 18,242,733 | $ 18,242,733 | |||
Convertible Series B preferred shares | Private Placement | ||||||
Temporary Equity [Line Items] | ||||||
Stock issued and sold during period (in shares) | shares | 1,817,035 | |||||
Sale of stock, consideration received | $ 20,000,305 | |||||
Payments of fees | 1,600,000 | |||||
Payments of debt issuance costs | $ 148,575 | |||||
Common - Class V | ||||||
Temporary Equity [Line Items] | ||||||
Mezzanine equity, fair value per share (in USD per share) | $ / shares | $ 6.39 | $ 9.33 | $ 9.33 | $ 9.33 | ||
Mezzanine equity, net of non-controlling interest | $ 243,002,390 | $ 243,002,390 | $ 243,002,390 | |||
Maximum redemption right valuation | $ 75,341,142 | $ 243,002,391 | ||||
Common - Class V | Q Power LLC | Stronghold LLC | ||||||
Temporary Equity [Line Items] | ||||||
Shares distributed in business reorganization (in shares) | shares | 27,072,000 |
MEZZANINE EQUITY - Schedule of
MEZZANINE EQUITY - Schedule of Series A and B Valuations (Details) - Private Placement - USD ($) | May 14, 2021 | Apr. 01, 2021 |
Convertible Series A preferred shares | ||
Temporary Equity [Line Items] | ||
Proceeds | $ 85,000,000 | |
Transaction Fees | (6,300,000) | |
Debt issuance costs pertaining to stock registration warrants - refer to Note 14 | (631,897) | |
Total net mezzanine equity | 78,041,113 | |
Convertible Series A preferred shares | B. Riley Securities | ||
Temporary Equity [Line Items] | ||
Transaction Fees | (5,100,000) | |
Convertible Series A preferred shares | Vinson & Elkins L.L.P. | ||
Temporary Equity [Line Items] | ||
Transaction Fees | $ (1,226,990) | |
Convertible Series B preferred shares | ||
Temporary Equity [Line Items] | ||
Proceeds | $ 20,000,305 | |
Transaction Fees | (1,600,000) | |
Debt issuance costs pertaining to stock registration warrants - refer to Note 14 | (148,575) | |
Total net mezzanine equity | 18,242,733 | |
Convertible Series B preferred shares | B. Riley Securities | ||
Temporary Equity [Line Items] | ||
Transaction Fees | (1,200,000) | |
Convertible Series B preferred shares | Vinson & Elkins L.L.P. | ||
Temporary Equity [Line Items] | ||
Transaction Fees | $ (408,997) |
MEZZANINE EQUITY - Schedule o_2
MEZZANINE EQUITY - Schedule of Mezzanine Equity (Details) - USD ($) | May 14, 2021 | Apr. 01, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
General partners, beginning balance | $ (2,877,584) | $ 167,661,249 | $ (2,877,584) | $ (2,710,323) | $ (2,877,584) | $ (2,710,323) | |
NET INCOME/(LOSS) - attributable to non-controlling interest | (4,328,460) | (2,235,219) | (167,261) | (6,563,677) | (6,730,940) | ||
Maximum redemption right valuation | 79,669,602 | 172,774,052 | 252,443,652 | ||||
General partners, ending balance | 243,002,391 | 167,661,249 | $ (2,877,584) | 243,002,391 | 243,002,391 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Beginning balance | 263,945,094 | ||||||
Maximum redemption right valuation | 79,669,602 | 172,774,052 | 252,443,652 | ||||
Ending balance | 339,286,236 | $ 263,945,094 | 339,286,236 | $ 339,286,236 | |||
General Partners | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
Maximum redemption right valuation | 4,328,460 | 9,441,261 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Maximum redemption right valuation | $ 4,328,460 | $ 9,441,261 | |||||
Convertible Series A preferred shares | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Beginning balance (in shares) | 9,792,000 | ||||||
Beginning balance | $ 78,041,113 | ||||||
Issuance of convertible redeemable preferred units (in shares) | 9,792,000 | ||||||
Issuance of Series A convertible redeemable preferred units | $ 78,673,010 | ||||||
Warrants issued as part of stock registrations - refer to Note 14 | $ (631,897) | $ (631,897) | |||||
Ending balance (in shares) | 9,792,000 | 9,792,000 | 9,792,000 | 9,792,000 | |||
Ending balance | $ 78,041,113 | $ 78,041,113 | $ 78,041,113 | $ 78,041,113 | |||
Convertible Series B preferred shares | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Beginning balance (in shares) | 1,817,035 | ||||||
Beginning balance | $ 18,242,733 | ||||||
Issuance of convertible redeemable preferred units (in shares) | 1,817,035 | ||||||
Issuance of Series A convertible redeemable preferred units | $ 18,391,308 | ||||||
Warrants issued as part of stock registrations - refer to Note 14 | $ (148,575) | $ (148,576) | |||||
Ending balance (in shares) | 1,817,035 | 1,817,035 | 1,817,035 | 1,817,035 | |||
Ending balance | $ 18,242,733 | $ 18,242,733 | $ 18,242,733 | $ 18,242,733 | |||
Common - Class V | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
Maximum redemption right valuation | $ 75,341,142 | $ 243,002,391 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Beginning balance (in shares) | 27,057,600 | ||||||
Beginning balance | $ 167,661,249 | ||||||
Exchange of common shares - Class V (in shares) | 27,072,000 | ||||||
Exchange of common units for Class A common shares (in shares) | (14,400) | ||||||
Maximum redemption right valuation | $ 75,341,142 | $ 243,002,391 | |||||
Ending balance (in shares) | 27,057,600 | 27,057,600 | 27,057,600 | 27,057,600 | 27,057,600 | ||
Ending balance | $ 243,002,391 | $ 167,661,249 | $ 243,002,391 | $ 243,002,391 |
NON-CONTROLLING INTEREST (Detai
NON-CONTROLLING INTEREST (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Apr. 01, 2021 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||
General partners, beginning balance | $ 167,661,249 | $ (2,877,584) | $ (2,710,323) | $ (2,877,584) | $ (2,710,323) | |
Less; net losses attributable to non-controlling interests | (4,328,460) | (2,235,219) | (167,261) | (6,563,677) | (6,730,940) | |
Maximum redemption right valuation and adjustments | 79,669,602 | 172,774,052 | 252,443,652 | |||
General partners, ending balance | 243,002,391 | $ 167,661,249 | $ (2,877,584) | 243,002,391 | $ 243,002,391 | |
Common - Class V | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||
Maximum redemption right valuation and adjustments | $ 75,341,142 | $ 243,002,391 | ||||
Mezzanine equity, outstanding (in shares) | 27,057,600 | 27,057,600 | 27,057,600 | 27,057,600 | 27,057,600 | |
Mezzanine equity, fair value per share (in USD per share) | $ 9.33 | $ 9.33 | $ 9.33 | $ 6.39 |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Earnings per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |||
Numerator | |||||||||
Net Loss | $ (6,280,029) | $ (682,374) | $ (9,523,046) | $ (9,761,994) | $ (323,760) | ||||
Less; net losses attributable to non-controlling interests | (4,328,460) | $ (2,235,219) | $ (167,261) | (6,563,677) | (6,730,940) | ||||
Net loss attributable to Class A common shareholders | $ (1,951,569) | $ (238,948) | $ (682,374) | $ (2,959,369) | $ (3,031,054) | $ (323,760) | |||
Denominator | |||||||||
Weighted average shares of Class A common shares outstanding (in shares) | 322,342 | [1] | 173,532 | 173,532 | [1] | ||||
Earnings per share: | |||||||||
Basic net loss per share (in USD per share) | $ (6.05) | [1] | $ (17.05) | $ (17.05) | [1] | ||||
Warrants included in common stock (in shares) | 181,647 | 181,647 | 181,647 | ||||||
[1] | Basic and diluted loss per share of Class A common stock is presented only for the period after the Company’s Reorganization Transactions. See Note 1 - Business Combinations for a description of the Reorganization Transactions. See Note 17 - Earnings (Loss) Per Share for the calculation of loss per share. |
EARNINGS (LOSS) PER SHARE - S_2
EARNINGS (LOSS) PER SHARE - Schedule of Potentially Dilutive Securities (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 39,358,725 | 0 |
Warrants to purchase convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 116,090 | |
Common - Class V | Class V common shares not yet exchanged for Class A common shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 27,057,600 | |
Convertible Preferred Stock | Convertible Series A preferred shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 10,368,000 | |
Convertible Preferred Stock | Convertible Series B preferred shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,817,035 |
RENEWABLE ENERGY CREDITS (Detai
RENEWABLE ENERGY CREDITS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Renewable Energy Credits [Abstract] | ||||
Renewable energy credits, utilized | $ (956,366) | $ (18,837) | $ (1,746,352) | $ (18,837) |
ASPEN INTEREST (_OLYMPUS_) BU_3
ASPEN INTEREST (“OLYMPUS”) BUYOUT - Narrative (Details) - USD ($) | Apr. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Business Reorganization [Abstract] | |||
Shares issued in business reorganization (in shares) | 576,000 | ||
Issuance price (in dollars per share) | $ 8.68 | ||
Equity interest issued value | $ 5,000,000 | ||
Payment for business reorganization | 2,000,000 | $ 2,000,000 | $ 0 |
Consideration transferred | $ 7,000,000 |
ASPEN INTEREST (_OLYMPUS_) BU_4
ASPEN INTEREST (“OLYMPUS”) BUYOUT - Partners' Deficit of Aspen Interest (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Limited partners, beginning balance | $ (1,336,784) |
Net losses - three months ended March 31, 2021 | $ (71,687) |
SUPPLEMENTAL CASH AND NON-CAS_3
SUPPLEMENTAL CASH AND NON-CASH INFORMATION (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Noncash or Part Noncash Acquisitions [Line Items] | ||
Equipment financed with debt | $ 63,389,457 | $ 1,025,675 |
Interest Paid | 2,594,751 | 106,881 |
Issued as part of equipment debt financing: | ||
Warrants | 1,999,396 | 0 |
Warrants issued as part of stock registrations | 780,472 | 0 |
Total | 9,169,756 | 0 |
Common Class A | ||
Issued as part of equipment debt financing: | ||
Stock issued | 1,389,888 | 0 |
Series A redeemable and convertible preferred stock | ||
Issued as part of equipment debt financing: | ||
Stock issued | $ 5,000,000 | $ 0 |
TAX RECEIVABLE AGREEMENT (Detai
TAX RECEIVABLE AGREEMENT (Details) - USD ($) | Apr. 01, 2021 | Sep. 30, 2021 |
Income Tax Disclosure [Abstract] | ||
Tax receivable agreement, percentage | 85.00% | |
Tax receivable agreement, deferred tax asset | $ 0 | |
Tax receivable agreement, deferred tax liability | $ 0 |
PROVISIONS FOR INCOME TAXES (De
PROVISIONS FOR INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Effective income tax rate | 0.00% | 0.00% |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Other current assets | $ 3,779,663 | $ 65,831 |
Common stock, par value (in USD per share) | $ 0.0001 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued liabilities | $ 3,833,191 | $ 828 |
Legal fee accrual | 3,823,636 | |
Real estate tax accrual | $ 9,555 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Nov. 29, 2021USD ($)minerpetahash | Nov. 26, 2021USD ($)miner | Nov. 23, 2021USD ($)miner | Nov. 18, 2021USD ($) | Nov. 16, 2021USD ($)minerinstallmentpetahash | Nov. 02, 2021USD ($)shares | Nov. 01, 2021USD ($) | Oct. 29, 2021USD ($) | Oct. 28, 2021USD ($)minerinstallment | Oct. 26, 2021USD ($)shares | Oct. 21, 2021USD ($) | Oct. 19, 2021USD ($)$ / sharesshares | Oct. 18, 2021 | Jun. 02, 2021USD ($) | Apr. 02, 2021USD ($)miner | Apr. 01, 2021installment | Oct. 31, 2021miner$ / kWh | Sep. 30, 2021USD ($)miner$ / shares | Apr. 14, 2021miner | Apr. 02, 2021USD ($) | Apr. 02, 2021 | Apr. 02, 2021segment | Apr. 02, 2021miner_equipment |
Subsequent Event [Line Items] | |||||||||||||||||||||||
Number of miners | miner | 27,300 | ||||||||||||||||||||||
Remaining commitment balance | $ 108,109,352 | ||||||||||||||||||||||
Number of installments | installment | 17 | ||||||||||||||||||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | ||||||||||||||||||||||
MinerVa, MinerVA | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 14,677,500 | $ 44,032,500 | |||||||||||||||||||||
Number of miners | 15,000 | 15,000 | 15,000 | 15,000 | |||||||||||||||||||
Remaining commitment balance | $ 73,387,500 | $ 73,387,500 | |||||||||||||||||||||
Percentage of purchase price | 20.00% | 20.00% | 60.00% | ||||||||||||||||||||
Northern Data, MicroBT | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Number of miners | miner | 9,900 | 9,900 | |||||||||||||||||||||
Remaining commitment balance | $ 22,061,852 | ||||||||||||||||||||||
Subsequent Event | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 738,500 | ||||||||||||||||||||||
Price deducted for power used (in dollars per kilowatt-hours) | $ / kWh | 0.027 | ||||||||||||||||||||||
Percentage of revenue for company | 65.00% | ||||||||||||||||||||||
Percentage of revenue for counterparty | 35.00% | ||||||||||||||||||||||
Conversion ratio | 2.88 | ||||||||||||||||||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | ||||||||||||||||||||||
Sale of stock (in USD per share) | $ / shares | 19 | ||||||||||||||||||||||
Sale of stock, stock issuance costs (in USD per share) | $ / shares | $ 1.33 | ||||||||||||||||||||||
Sale of stock, consideration received | $ 132,500,000 | ||||||||||||||||||||||
Subsequent Event | MinerVa Semiconductor Corp | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
New issues (in shares) | shares | 0 | ||||||||||||||||||||||
Subsequent Event | Panther Creek Energy Facility | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Cash payment to acquire business | $ 3,000,000 | ||||||||||||||||||||||
Subsequent Event | Panther Creek Energy Facility | Common Stock | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Equity interest issued (in shares) | shares | 1,152,000 | ||||||||||||||||||||||
Subsequent Event | Loans payable | Commercial Premium Finance Agreement | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Debt instrument term | 9 months | ||||||||||||||||||||||
Interest rate | 3.454% | ||||||||||||||||||||||
Down payment | $ 1,400,000 | ||||||||||||||||||||||
Debt outstanding | 5,500,000 | ||||||||||||||||||||||
Monthly payments | 621,300 | ||||||||||||||||||||||
Subsequent Event | Management | Directors And Officers Insurance Policy | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Related party transaction | $ 6,900,000 | ||||||||||||||||||||||
Subsequent Event | Affiliated Entity | Management Fee | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Expenses from transactions with related party | $ 1,000,000 | ||||||||||||||||||||||
Subsequent Event | Affiliated Entity | Mobilization Fee | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Expenses from transactions with related party | $ 150,000 | ||||||||||||||||||||||
Subsequent Event | IPO | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Shares sold in offering (in shares) | shares | 7,690,400 | ||||||||||||||||||||||
Subsequent Event | IPO, Firm Shares | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Shares sold in offering (in shares) | shares | 6,687,305 | ||||||||||||||||||||||
Subsequent Event | Over-Allotment Option | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Shares sold in offering (in shares) | shares | 1,003,095 | ||||||||||||||||||||||
Subsequent Event | MinerVa, MinerVA | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 14,667,500 | ||||||||||||||||||||||
Number of miners | miner | 2,500 | ||||||||||||||||||||||
Subsequent Event | Miner Equipment, Bitmain Technologies Limited | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 23,300,000 | ||||||||||||||||||||||
Number of miners per month | miner | 300 | 2,000 | |||||||||||||||||||||
Number of miners | miner | 1,800 | 12,000 | |||||||||||||||||||||
Remaining commitment balance | $ 19,350,000 | $ 75,000,000 | |||||||||||||||||||||
Number of installments | installment | 3 | 3 | |||||||||||||||||||||
Delivery period | 6 months | 6 months | |||||||||||||||||||||
Number of petahash per second | petahash | 1,450 | ||||||||||||||||||||||
Subsequent Event | Miner Equipment, Bitmain Technologies Limited | Miner Equipment, Bitmain Technologies Limited, Installment One | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 6,835,000 | ||||||||||||||||||||||
Percentage of purchase price | 0.35% | 25.00% | |||||||||||||||||||||
Subsequent Event | Miner Equipment, Bitmain Technologies Limited | Miner Equipment, Bitmain Technologies Limited, Installment Two And Three | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 4,550,000 | ||||||||||||||||||||||
Percentage of installment purchase price assigned | 35.00% | ||||||||||||||||||||||
Subsequent Event | Miner Equipment, Bitmain Technologies Limited | Miner Equipment, Bitmain Technologies Limited, Installment Two | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Remaining commitment balance | $ 13,000,000 | ||||||||||||||||||||||
Percentage of purchase price | 0.35% | 35.00% | |||||||||||||||||||||
Percentage of installment purchase price assigned | 0.35% | ||||||||||||||||||||||
Subsequent Event | Miner Equipment, Bitmain Technologies Limited | Miner Equipment, Bitmain Technologies Limited, Installment Three | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Percentage of purchase price | 0.30% | 40.00% | |||||||||||||||||||||
Subsequent Event | Miner Equipment, Nowlit Solutions Corp. And Luxor Technology Corporation | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Number of petahash per second | petahash | 200 | ||||||||||||||||||||||
Subsequent Event | Miner Equipment, Nowlit Solutions Corp. | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 2,486,730 | $ 1,605,360 | |||||||||||||||||||||
Number of miners | miner | 295 | 190 | |||||||||||||||||||||
Subsequent Event | Miner Equipment, Luxor Technology Corporation | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 4,312,650 | ||||||||||||||||||||||
Number of miners | miner | 770 | ||||||||||||||||||||||
Subsequent Event | Miner Equipment, Luxor Technology Corporation | Miner Equipment, Luxor Technology Corporation, Purchase One | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 5,357,300 | ||||||||||||||||||||||
Number of miners | miner | 750 | ||||||||||||||||||||||
Subsequent Event | Miner Equipment, Luxor Technology Corporation | Miner Equipment, Luxor Technology Corporation, Purchase Two | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Purchases | $ 3,633,500 | ||||||||||||||||||||||
Number of miners | miner | 500 |