COVER
COVER - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 28th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | 845 | |
Local Phone Number | 579-5992 | |
Title of 12(b) Security | Class A common stock | |
Trading Symbol | SDIG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
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 | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,965,392 | |
Common Class V | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,405,760 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS: | ||
Cash and cash equivalents | $ 7,537,607 | $ 4,214,613 |
Digital currencies | 2,704 | 3,175,595 |
Accounts receivable | 1,739,187 | 507,029 |
Inventory | 4,085,923 | 4,196,812 |
Prepaid insurance | 2,391,206 | 3,787,048 |
Due from related parties | 97,288 | 97,288 |
Other current assets | 2,215,805 | 1,675,084 |
Total current assets | 18,069,720 | 17,653,469 |
Equipment deposits | 0 | 8,000,643 |
Property, plant and equipment, net | 144,269,680 | 144,642,771 |
Operating lease right-of-use assets | 1,283,338 | 1,472,747 |
Land | 1,748,440 | 1,748,440 |
Road bond | 299,738 | 299,738 |
Security deposits | 348,888 | 348,888 |
Other noncurrent assets | 170,488 | 170,488 |
TOTAL ASSETS | 166,190,292 | 174,337,184 |
LIABILITIES: | ||
Accounts payable | 11,510,296 | 11,857,052 |
Accrued liabilities | 9,599,950 | 10,787,895 |
Financed insurance premiums | 1,513,704 | 2,927,508 |
Current portion of long-term debt, net of discounts and issuance fees | 12,058,049 | 7,936,147 |
Current portion of operating lease liabilities | 729,821 | 788,706 |
Due to related parties | 619,947 | 718,838 |
Total current liabilities | 36,031,767 | 35,016,146 |
Asset retirement obligation | 1,089,471 | 1,075,728 |
Warrant liabilities | 13,532,709 | 25,210,429 |
Long-term debt, net of discounts and issuance fees | 43,153,392 | 48,203,762 |
Long-term operating lease liabilities | 639,586 | 776,079 |
Contract liabilities | 67,244 | 241,420 |
Total liabilities | 94,514,169 | 110,523,564 |
COMMITMENTS AND CONTINGENCIES (NOTE 11) | ||
REDEEMABLE COMMON STOCK: | ||
Redeemable common stock | 9,704,926 | 20,416,116 |
STOCKHOLDERS’ EQUITY: | ||
Common Stock – Class A; $0.0001 par value; 685,440,000 shares authorized; 12,900,076 and 11,115,561 shares issued and outstanding as of March 31, 2024, and December 31, 2023, respectively. | 1,290 | 1,112 |
Accumulated deficits | (314,994,985) | (331,647,755) |
Additional paid-in capital | 376,964,891 | 375,044,145 |
Total stockholders' equity | 61,971,197 | 43,397,504 |
Total redeemable common stock and stockholders' equity | 71,676,123 | 63,813,620 |
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY | 166,190,292 | 174,337,184 |
Series C convertible preferred stock | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value, issued | $ 1 | $ 1 |
Preferred stock, outstanding (in shares) | 5,990 | 5,990 |
Preferred Units (in shares) | 5,990 | 5,990 |
Series D convertible preferred stock | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, value, issued | $ 0 | $ 1 |
Preferred stock, outstanding (in shares) | 0 | 7,610 |
Preferred Units (in shares) | 0 | 7,610 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Common stock - Class V, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock - Class V, authorized (in shares) | 34,560,000 | 34,560,000 |
Common stock - Class V, issued (in shares) | 2,405,760 | 2,405,760 |
Common stock - Class V, outstanding (in shares) | 2,405,760 | 2,405,760 |
Common stock - Class A, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock - Class A, authorized (in shares) | 685,440,000 | 685,440,000 |
Common stock - Class A, issued (in shares) | 12,900,076 | 11,115,561 |
Common stock - Class A, outstanding (in shares) | 12,900,076 | 11,115,561 |
Series C convertible preferred stock | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 23,102 | 23,102 |
Preferred stock, issued (in shares) | 5,990 | 5,990 |
Preferred stock, outstanding (in shares) | 5,990 | 5,990 |
Series D convertible preferred stock | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 15,582 | 15,582 |
Preferred stock, issued (in shares) | 0 | 7,610 |
Preferred stock, outstanding (in shares) | 0 | 7,610 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING REVENUES: | ||
Operating revenues | $ 27,522,185 | $ 17,266,215 |
OPERATING EXPENSES: | ||
Fuel | 7,410,828 | 7,414,014 |
Operations and maintenance | 8,241,725 | 8,440,923 |
General and administrative | 6,598,346 | 8,468,755 |
Depreciation and amortization | 9,514,654 | 7,722,841 |
Loss on disposal of fixed assets | 0 | 91,086 |
Realized gain on sale of digital currencies | (624,107) | (326,768) |
Unrealized gain on digital currencies | (1,227) | 0 |
Realized gain on sale of miner assets | (36,012) | 0 |
Impairments on digital currencies | 0 | 71,477 |
Total operating expenses | 31,104,207 | 31,882,328 |
NET OPERATING LOSS | (3,582,022) | (14,616,113) |
OTHER INCOME (EXPENSE): | ||
Interest expense | (2,263,409) | (2,383,913) |
Loss on debt extinguishment | 0 | (28,960,947) |
Changes in fair value of warrant liabilities | 11,677,720 | (714,589) |
Other | 10,000 | 15,000 |
Total other income (expense) | 9,424,311 | (32,044,449) |
NET INCOME (LOSS) | 5,842,289 | (46,660,562) |
NET INCOME (LOSS) attributable to noncontrolling interest | 918,287 | (18,119,131) |
NET INCOME (LOSS) attributable to Stronghold Digital Mining, Inc. | $ 4,924,002 | $ (28,541,431) |
NET INCOME (LOSS) attributable to Class A common shareholders: | ||
Basic (in USD per share) | $ 0.35 | $ (6.52) |
Diluted (in USD per share) | $ 0.35 | $ (6.52) |
Weighted average number of Class A common shares outstanding: | ||
Basic (in shares) | 13,989,820 | 4,375,614 |
Diluted (in shares) | 13,989,820 | 4,375,614 |
Cryptocurrency mining | ||
OPERATING REVENUES: | ||
Operating revenues | $ 21,291,058 | $ 11,297,298 |
Cryptocurrency hosting | ||
OPERATING REVENUES: | ||
Operating revenues | 5,457,529 | 2,325,996 |
Energy | ||
OPERATING REVENUES: | ||
Operating revenues | 700,067 | 2,730,986 |
Capacity | ||
OPERATING REVENUES: | ||
Operating revenues | 0 | 859,510 |
Other | ||
OPERATING REVENUES: | ||
Operating revenues | $ 73,531 | $ 52,425 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) | Total | Cumulative Effect, Period of Adoption, Adjustment | Series C convertible preferred stock | Series D convertible preferred stock | Preferred Stock Series C convertible preferred stock | Preferred Stock Series D convertible preferred stock | Common A | Common A Series C convertible preferred stock | Common A Series D convertible preferred stock | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital | Additional Paid-in Capital Series C convertible preferred stock | Additional Paid-in Capital Series D convertible preferred stock |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Shares outstanding (in shares) | 0 | 0 | 31,710,217 | |||||||||||
Beginning balance at Dec. 31, 2022 | $ 83,025,144 | $ 0 | $ 0 | $ 3,171 | $ (240,443,302) | $ 323,465,275 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income attributable to Stronghold Digital Mining, Inc. | (28,541,431) | (28,541,431) | ||||||||||||
Net income attributable to noncontrolling interest | (18,119,131) | (18,119,131) | ||||||||||||
Maximum redemption right valuation [Common V Units] | (3,744,632) | (3,744,632) | ||||||||||||
Stock-based compensation | 2,449,324 | 2,449,324 | ||||||||||||
Vesting of restricted stock units (in shares) | 508,319 | |||||||||||||
Vesting of restricted stock units | 0 | $ 51 | (51) | |||||||||||
Warrants issued and outstanding | 1,739,882 | 1,739,882 | ||||||||||||
Exercised warrants (in shares) | 5,002,650 | |||||||||||||
Exercised warrants | 273 | $ 501 | (228) | |||||||||||
Issuance of Series C convertible preferred stock (in shares) | 23,102 | |||||||||||||
Issuance of Series C convertible preferred stock | $ 45,386,946 | $ 2 | $ 45,386,944 | |||||||||||
Conversion of stock (in shares) | (1,530) | 3,825,000 | ||||||||||||
Conversion of stock | $ 0 | $ 382 | $ (382) | |||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 21,572 | 0 | 41,046,186 | |||||||||||
Ending balance at Mar. 31, 2023 | 82,196,375 | $ 2 | $ 0 | $ 4,105 | (290,848,496) | 373,040,764 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Shares outstanding (in shares) | 21,572 | 0 | 41,046,186 | |||||||||||
Shares outstanding (in shares) | 5,990 | 7,610 | 11,115,561 | |||||||||||
Beginning balance at Dec. 31, 2023 | 43,397,504 | $ 99,292 | $ 1 | $ 1 | $ 1,112 | (331,647,755) | $ 99,292 | 375,044,145 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income attributable to Stronghold Digital Mining, Inc. | 4,924,002 | 4,924,002 | ||||||||||||
Net income attributable to noncontrolling interest | 918,287 | 918,287 | ||||||||||||
Maximum redemption right valuation [Common V Units] | 10,711,189 | 10,711,189 | ||||||||||||
Stock-based compensation (in shares) | 0 | |||||||||||||
Stock-based compensation | 1,939,120 | $ 0 | 1,939,120 | |||||||||||
Vesting of restricted stock units (in shares) | 370,398 | |||||||||||||
Vesting of restricted stock units | 0 | $ 37 | (37) | |||||||||||
Conversion of stock (in shares) | (7,610) | 1,414,117 | ||||||||||||
Conversion of stock | $ (18,197) | $ (1) | $ 141 | $ (18,337) | ||||||||||
Ending balance (in shares) at Mar. 31, 2024 | 5,990 | 0 | 12,900,076 | |||||||||||
Ending balance at Mar. 31, 2024 | $ 61,971,197 | $ 1 | $ 0 | $ 1,290 | $ (314,994,985) | $ 376,964,891 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Shares outstanding (in shares) | 5,990 | 0 | 12,900,076 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 5,842,289 | $ (46,660,562) |
Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||
Depreciation and amortization | 9,514,654 | 7,722,841 |
Accretion of asset retirement obligation | 13,743 | 13,051 |
Loss on disposal of fixed assets | 0 | 91,086 |
Realized gain on sale of miner assets | (36,012) | 0 |
Change in value of accounts receivable | 213,040 | 1,002,750 |
Amortization of debt issuance costs | 51,473 | 34,517 |
Stock-based compensation | 1,939,120 | 2,449,324 |
Loss on debt extinguishment | 0 | 28,960,947 |
Changes in fair value of warrant liabilities | (11,677,720) | 714,589 |
Other | 199,844 | (12,139) |
(Increase) decrease in digital currencies: | ||
Mining revenue | (25,114,221) | (12,921,075) |
Net proceeds from sale of digital currencies | 28,387,631 | 12,286,573 |
Unrealized gain on digital currencies | (1,227) | 0 |
Impairments on digital currencies | 0 | 71,477 |
(Increase) decrease in assets: | ||
Accounts receivable | (1,445,198) | 4,959,865 |
Prepaid insurance | 1,395,842 | 1,336,037 |
Due from related parties | 0 | (68,436) |
Inventory | 110,889 | (229,175) |
Other assets | (1,092,745) | (296,265) |
Increase (decrease) in liabilities: | ||
Accounts payable | (400,907) | (1,390,895) |
Due to related parties | (98,891) | 237,466 |
Accrued liabilities | (1,637,806) | (1,518,296) |
Other liabilities, including contract liabilities | (302,388) | (125,146) |
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES | 5,861,410 | (3,341,466) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (244,605) | (13,738) |
Proceeds from sale of property, plant and equipment, including CIP | 180,000 | 0 |
NET CASH FLOWS USED IN INVESTING ACTIVITIES | (64,605) | (13,738) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of debt | (1,060,008) | (1,836,925) |
Repayments of financed insurance premiums | (1,413,803) | (1,750,874) |
Proceeds from exercise of warrants | 0 | 273 |
NET CASH FLOWS USED IN FINANCING ACTIVITIES | (2,473,811) | (3,587,526) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,322,994 | (6,942,730) |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 4,214,613 | 13,296,703 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 7,537,607 | $ 6,353,973 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Stronghold Digital Mining, Inc. ("Stronghold Inc." or the "Company") is a low-cost, environmentally beneficial, vertically integrated crypto asset mining company focused on mining Bitcoin and environmental remediation and reclamation services. The Company wholly owns and operates two coal refuse power generation facilities that it has upgraded: (i) the Company's first reclamation facility located on a 650-acre site in Scrubgrass Township, Venango County, Pennsylvania, which the Company acquired the remaining interest of in April 2021, and has the capacity to generate approximately 83.5 megawatts (“MW”) of electricity (the "Scrubgrass Plant"); and (ii) a facility located near Nesquehoning, Pennsylvania, which the Company acquired in November 2021, and has the capacity to generate approximately 80 MW of electricity (the "Panther Creek Plant," and collectively with the Scrubgrass Plant, the "Plants"). Both facilities qualify as an Alternative Energy System because coal refuse is classified under Pennsylvania law as a Tier II Alternative Energy Source (large-scale hydropower is also classified in this tier). The Company is committed to generating energy and managing its assets sustainably, and the Company believes that it is one of the first vertically integrated crypto asset mining companies with a focus on environmentally beneficial operations. Stronghold Inc. operates in two business segments – the Energy Operations segment and the Cryptocurrency Operations segment. This segment presentation is consistent with how the Company's chief operating decision maker evaluates financial performance and makes resource allocation and strategic decisions about the business. Energy 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 a Professional Services Agreement (“PSA”) with Customized Energy Solutions (“CES”), effective July 27, 2022. Under the PSA, CES agreed to act as the exclusive provider of services for the benefit of the Company related to interfacing with PJM, including handling daily marketing, energy scheduling, telemetry, capacity management, reporting, and other related services for the Plants. The initial term of the agreement is two years, and then will extend automatically on an annual basis unless terminated by either party with 60 days written (or electronic) notice prior to the current term end. The Company’s primary fuel source is waste coal which is provided by various third parties. Waste coal tax credits are earned by the Company by generating electricity utilizing coal refuse. Cryptocurrency Operations The Company is also a vertically-integrated digital currency mining business. The Company buys and maintains a fleet of Bitcoin miners as well as the required infrastructure and provides power to third-party digital currency miners under hosting agreements. 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
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION The unaudited condensed consolidated balance sheet as of March 31, 2024, the unaudited condensed consolidated statements of operations, stockholders' equity and cash flows for the three months ended March 31, 2024, and 2023, have been prepared by the Company. In the opinion of management, all adjustments, consisting of only normal and recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented, have been made. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the operating results expected for the full year. The condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Certain information and footnote disclosures normally included in the annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), have been condensed or omitted. Certain reclassifications of amounts previously reported have been made to the accompanying condensed consolidated financial statements in order to conform to current presentation. Additionally, since there are no differences between net income (loss) and comprehensive income (loss), all references to comprehensive income (loss) have been excluded from the condensed consolidated financial statements. On May 15, 2023, following approval by the Board of Directors (the "Board") and stockholders of the Company, the Company effected a 1-for-10 reverse stock split ("Reverse Stock Split") of its Class A common stock, par value $0.0001 per share, and Class V common stock, par value $0.0001 per share. The par values of the Company's Class A and Class V common stock were not adjusted as a result of the Reverse Stock Split. All share and per share amounts and related stockholders' equity balances presented herein have been retroactively adjusted to reflect the Reverse Stock Split. Recently Implemented Accounting Pronouncements In September 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-13, Financial Instruments – Credit Losses , which adds a new impairment model, known as the current expected credit loss ("CECL") model, that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance for its estimate of expected credit losses at the initial recognition of an in-scope financial instrument and applies it to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses, and entities will need to measure expected credit losses on assets that have a low risk of loss. Since the Company is a smaller reporting company, as defined by the U.S. Securities and Exchange Commission (the "SEC"), the new guidance became effective on January 1, 2023. The Company adopted ASU 2016-13 effective January 1, 2023, but the adoption of ASU 2016-13 did not have an impact on the Company's consolidated financial statements. In December 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other - Crypto Assets (Subtopic 350-60) , which requires all entities holding crypto assets that meet certain requirements to subsequently measure those in-scope crypto assets at fair value, with the remeasurement recorded in net income. Among other things, the new guidance also requires separate presentation of (i) the gain or loss associated with remeasurement of crypto assets on the income statement and (ii) crypto assets from other intangible assets on the balance sheet. Before this new guidance, crypto assets were generally accounted for as indefinite-lived intangible assets, which follow a cost-less-impairment accounting model that only reflects decreases, but not increases, in the fair value of crypto assets holdings until sold. Although early adoption is permitted, the new guidance becomes effective on January 1, 2025, and should be applied using a modified retrospective transition method with a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the beginning of the year of adoption. The Company adopted ASU 2023-08 as of January 1, 2024, and the cumulative adjustment increased the opening balance of retained earnings by $99,292. See Note 2 – Digital Currencies for more information. Recently Issued Accounting Pronouncements During the first quarter of 2024, there have been no recently issued accounting pronouncements applicable to the Company. However, the Company continues to evaluate the impact of the following accounting pronouncements issued during the preceding quarter. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure , which requires public entities to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, public entities with a single reportable segment will be required to provide the new disclosures and all the disclosures required under ASC 280, Segment Reporting . Although early adoption is permitted, this new guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis. The Company is currently evaluating the impact of adopting this new guidance on its interim and annual consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. Although early adoption is permitted, this new guidance becomes effective for annual periods beginning after December 15, 2024, on a prospective basis. The Company is currently evaluating the impact of adopting this new guidance on its interim and annual consolidated financial statements and related disclosures. |
DIGITAL CURRENCIES
DIGITAL CURRENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
DIGITAL CURRENCIES | NOTE 2 – DIGITAL CURRENCIES As of March 31, 2024, the Company held an aggregate amount of $2,704 in digital currencies comprised of unrestricted Bitcoin. Changes in digital currencies consisted of the following for the three months ended March 31, 2024, and 2023: Three Months Ended March 31, 2024 March 31, 2023 Digital currencies at beginning of period $ 3,175,595 $ 109,827 Additions of digital currencies (1) 25,114,221 12,921,075 Realized gain on sale of digital currencies 624,107 326,768 Unrealized gain (loss) on digital currencies 1,227 — Impairment losses — (71,477) Proceeds from sale of digital currencies (29,011,738) (12,613,341) Impact of ASU 2023-08 as of January 1, 2024 99,292 — Digital currencies at end of period $ 2,704 $ 672,852 (1) Additions of digital currencies were related to mining activities. 2 See Note 1 – Basis of Presentation for more details regarding the Company's adoption of ASU 2023-08 as of January 1, 2024. As previously disclosed, the Company adopted ASU 2023-08 effective January 1, 2024, using a modified retrospective transition method, with a cumulative-effect adjustment of $99,292 recorded to the opening balance of retained earnings. Following the adoption of ASU 2023-08, realized gains (net of realized losses) on the sale of digital currencies were $624,107 and unrealized gains (net of unrealized losses) on digital currencies were $1,227 for the three months ended March 31, 2024. Furthermore, with the adoption of ASU 2023-08, the Company no longer accounts for digital currencies as indefinite-live intangible assets, and therefore, no impairment losses have been recognized in the current year period. As of March 31, 2024, the Company's crypto asset holdings were immaterial. As of December 31, 2023, the Company's crypto asset holdings consisted of approximately 76.7 Bitcoin with a carrying value was $3,175,595 and fair value of $3,274,887. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY Inventory consisted of the following components as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 Waste coal $ 3,984,245 $ 4,066,201 Fuel oil 57,847 72,969 Limestone 43,831 57,642 Inventory $ 4,085,923 $ 4,196,812 |
EQUIPMENT DEPOSITS
EQUIPMENT DEPOSITS | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
EQUIPMENT DEPOSITS | NOTE 4 – EQUIPMENT DEPOSITS Equipment deposits represent contractual agreements with vendors to deliver and install miners at future dates. The following details the vendor, miner model, miner count, and expected delivery month(s). |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 5 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following as of March 31, 2024, and December 31, 2023: Useful Lives (Years) March 31, 2024 December 31, 2023 Electric plant 10 - 60 $ 67,083,864 $ 67,063,626 Strongboxes and power transformers 8 - 30 54,588,284 54,588,284 Karbolith 30 493,626 — Machinery and equipment 5 - 20 16,222,214 16,222,214 Rolling stock 5 - 7 261,000 261,000 Cryptocurrency machines and powering supplies 2 - 3 97,426,973 88,445,931 Computer hardware and software 2 - 5 100,536 100,536 Vehicles and trailers 2 - 7 658,500 658,500 Leasehold improvements 2 - 3 2,992,845 2,992,845 Construction in progress Not Depreciable 11,155,827 11,562,170 Asset retirement cost 10 - 30 580,452 580,452 251,564,121 242,475,558 Accumulated depreciation and amortization (107,294,441) (97,832,787) Property, plant and equipment, net $ 144,269,680 $ 144,642,771 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 $11,155,827 as of March 31, 2024, represents open contracts for future projects. Depreciation and amortization expense charged to operations was $9,514,654 and $7,722,841 for the three months ended March 31, 2024, and 2023, respectively, including depreciation of assets under finance leases of $103,736 and $133,382 for the three months ended March 31, 2024, and 2023, respectively. The gross value of assets under finance leases and the related accumulated amortization approximated $2,797,265 and $1,524,472 as of March 31, 2024, respectively, and $2,797,265 and $1,420,736 as of December 31, 2023, respectively. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | NOTE 6 – ACCRUED LIABILITIES Accrued liabilities consisted of the following as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 Accrued legal and professional fees $ 734,445 $ 733,115 Accrued interest 2,992 22,101 Accrued sales and use tax 6,088,271 5,660,028 Accrued plant utilities and fuel 1,565,020 3,505,203 Other 1,209,222 867,448 Accrued liabilities $ 9,599,950 $ 10,787,895 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 7 – DEBT Total debt consisted of the following as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 $499,520 loan, with interest at 2.74%, due February 2024. $ — $ 26,522 $517,465 loan, with interest at 4.79%, due November 2024. 121,576 158,027 $119,000 loan, with interest at 7.40%, due December 2026. 110,058 119,000 $585,476 loan, with interest at 4.99%, due November 2025. 302,428 345,665 $431,825 loan, with interest at 7.60%, due April 2024. 7,956 31,525 $58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. 50,932,368 51,060,896 $92,381 loan, with interest at 1.49%, due April 2026. 50,722 56,470 $64,136 loan, with interest at 11.85%, due May 2024. 7,000 13,795 $196,909 loan, with interest at 6.49%, due October 2025. 121,818 134,845 $60,679 loan, with interest at 7.60%, due March 2025. 44,516 48,672 $3,500,000 Promissory Note, with interest at 7.50%, due October 2025. 3,000,000 3,000,000 $1,184,935 Promissory Note, due June 2024. 236,987 592,468 $552,024 Promissory Note, due July 2024. 276,012 552,024 Total outstanding borrowings $ 55,211,441 $ 56,139,909 Current portion of long-term debt, net of discounts and issuance fees 12,058,049 7,936,147 Long-term debt, net of discounts and issuance fees $ 43,153,392 $ 48,203,762 WhiteHawk Refinancing Agreement On October 27, 2022, the Company entered into a secured credit agreement (the “Credit Agreement”) with WhiteHawk Finance LLC ("WhiteHawk") to refinance an existing equipment financing agreement, dated June 30, 2021, by and between Stronghold Digital Mining Equipment, LLC and WhiteHawk (the “WhiteHawk Financing Agreement”). Upon closing, the Credit Agreement consisted of $35.1 million in term loans and $23.0 million in additional commitments. The financing pursuant to the Credit Agreement (such financing, the “WhiteHawk Refinancing Agreement”) was entered into by Stronghold Digital Mining Holdings, LLC ("Stronghold LLC"), as Borrower (in such capacity, the “Borrower”), and is secured by substantially all of the assets of the Company and its subsidiaries and is guaranteed by the Company and each of its material subsidiaries. The WhiteHawk Refinancing Agreement requires equal monthly amortization payments resulting in full amortization at maturity. The WhiteHawk Refinancing Agreement has customary representations, warranties and covenants including restrictions on indebtedness, liens, restricted payments and dividends, investments, asset sales and similar covenants and contains customary events of default. On February 6, 2023, the Company, Stronghold LLC, as borrower, their subsidiaries and WhiteHawk Capital Partners LP ("WhiteHawk Capital"), as collateral agent and administrative agent, and the other lenders thereto, entered into an amendment to the Credit Agreement (the “First Amendment”) in order to modify certain covenants and remove certain prepayment requirements contained therein. As a result of the First Amendment, amortization payments for the period from February 2023 through July 2024 are not required, with monthly amortization resuming July 31, 2024. Beginning June 30, 2023, following a five-month holiday, Stronghold LLC will make monthly prepayments of the loan in an amount equal to 50% of its average daily cash balance (including cryptocurrencies) in excess of $7,500,000 for such month. Consistent with the First Amendment, the Company made a loan prepayment of $180,000 during the three months ended March 31, 2024. The First Amendment also modified the financial covenants to (i) in the case of the requirement of the Company to maintain a leverage ratio no greater than 4.0:1.00, such covenant will not be tested until the fiscal quarter ending September 30, 2024, and (ii) in the case of the minimum liquidity covenant, modified to require minimum liquidity at any time to be not less than: (A) until March 31, 2024, $2,500,000; (B) during the period beginning April 1, 2024, through and including December 31, 2024, $5,000,000; and (C) from and after January 1, 2025, $7,500,000. On February 15, 2024, the Company and WhiteHawk Capital, as collateral agent and administrative agent, and the other lenders thereto, entered into a Third Amendment to the Credit Agreement (the "Third Amendment") which, among other items, amended the the Company’s minimum liquidity requirement to not be less than: (A) until June 30, 2025, $2,500,000 and (B) from and after July 1, 2025, $5,000,000. The Company was in compliance with all applicable covenants under the WhiteHawk Refinancing Agreement as of March 31, 2024. The borrowings under the WhiteHawk Refinancing Agreement mature on October 26, 2025, and bear interest at a rate of either (i) the Secured Overnight Financing Rate ("SOFR") plus 10% or (ii) a reference rate equal to the greater of (x) 3%, (y) the federal funds rate plus 0.5% and (z) the term SOFR rate plus 1%, plus 9%. Borrowings under the WhiteHawk Refinancing Agreement may also be accelerated in certain circumstances. The average interest rate for borrowings under the WhiteHawk Refinancing Agreement approximated 15.50% and 14.46% for the three months ended March 31, 2024, and 2023, respectively. Convertible Note Exchange On December 30, 2022, the Company entered into an exchange agreement with the holders (the “Purchasers”) of the Company’s Amended and Restated 10% Notes (the “Amended May 2022 Notes”), providing for the exchange of the Amended May 2022 Notes (the “Exchange Agreement”) for shares of the Company’s newly-created Series C Convertible Preferred Stock, par value $0.0001 per share (the “Series C Preferred Stock”). On February 20, 2023, the transactions contemplated under the Exchange Agreement were consummated, and the Amended May 2022 Notes were deemed paid in full. Approximately $16.9 million of principal amount of debt was extinguished in exchange for the issuance of the shares of Series C Preferred Stock. As a result of this transaction, the Company incurred a loss on debt extinguishment of approximately $28,960,947 during the first quarter of 2023. Bruce & Merrilees Promissory Note On March 28, 2023, the Company and Stronghold LLC entered into a settlement agreement (the “B&M Settlement”) with its electrical contractor, Bruce & Merrilees Electric Co. (“B&M”). Pursuant to the B&M Settlement, B&M agreed to eliminate an approximately $11.4 million outstanding payable in exchange for a promissory note in the amount of $3,500,000 (the "B&M Note") and a stock purchase warrant for the right to purchase from the Company 300,000 shares of Class A common stock (the "B&M Warrant"). The B&M Note has no definitive payment schedule or term. Pursuant to the B&M Settlement, B&M released ten (10) 3000kva transformers to the Company and fully cancelled ninety (90) transformers remaining under a pre-existing order with a third-party supplier. The terms of the B&M Settlement included a mutual release of all claims. Simultaneous with the B&M Settlement, the Company and each of its subsidiaries entered into a subordination agreement with B&M and WhiteHawk Capital pursuant to which all obligations, liabilities and indebtedness of every nature of the Company and each of its subsidiaries owed to B&M shall be subordinate and subject in right and time of payment, to the prior payment of full of the Company's obligation to WhiteHawk Capital pursuant to the Credit Agreement. This subordination agreement became effective on March 28, 2023, with the Second Amendment to the Credit Agreement. Pursuant to the B&M Note, the first $500,000 of the principal amount of the loan was payable in four equal monthly installments of $125,000 beginning on April 30, 2023, so long as (i) no default or event of default has occurred or is occurring under the WhiteHawk Credit Agreement and (ii) no PIK Option (as such term is defined in the WhiteHawk Refinancing Agreement) has been elected by the Company. The principal amount under the B&M Note bears interest at seven and one-half percent (7.5%). As of March 31, 2024, the Company paid $500,000 of principal pursuant to the B&M Note. Canaan Promissory Notes On July 19, 2023, the Company entered into a Sales and Purchase Contract with Canaan Inc. ("Canaan") whereby the Company purchased 2,000 A1346 Bitcoin miners for a total purchase price of $2,962,337. The purchase price was payable to Canaan via an upfront payment of $1,777,402 on or before August 1, 2023, which the Company paid on July 25, 2023, and a promissory note of $1,184,935 due to Canaan in ten (10) equal, interest-free installments on the first day of each consecutive month thereafter until the remaining promissory note balance is fully repaid. The miners were delivered and installed during the third quarter of 2023 at the Company's Panther Creek Plant. As of March 31, 2024, the Company paid $947,948 of the promissory note due to Canaan. On December 26, 2023, the Company entered into a second Sales and Purchase Contract with Canaan whereby the Company purchased 1,100 A1346 Bitcoin miners for a total purchase price of $1,380,060. The purchase price was payable to Canaan via an upfront payment of $828,036 on or before December 26, 2023, which the Company paid on December 26, 2023, and a promissory note of $552,024 due to Canaan in six (6) equal, interest-free installments on the first day of each consecutive month thereafter, beginning in 2024, until the remaining promissory note balance is fully repaid. The miners were delivered and installed during the first quarter of 2024 at the Company's Scrubgrass Plant. As of March 31, 2024, the Company paid $276,012 of the promissory note due to Canaan. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8 – 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 Company's Russellton site specifically. The Company is also obligated to unload and properly dispose of ash at its Russellton site. The Company is charged a reduced handling fee of $1.00 per ton for any tons in excess of the minimum take of 200,000 tons. The Company is the designated operator of the Russellton site, and therefore, is responsible for complying with all state and federal requirements and regulations. The Company purchases coal from Coal Valley Properties, LLC, a single-member limited liability company which is entirely owned by one individual who has ownership in Q Power LLC ("Q Power"), and from CVS. CVS is a single-member limited liability company 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%. The Company expensed $379,442 and $150,000 for the three months ended March 31, 2024, and 2023, respectively, associated with coal purchases from CVS, which is included in fuel expense in the condensed consolidated statements of operations. See the composition of the due to related parties balance as of March 31, 2024, and December 31, 2023, below. Fuel Service and Beneficial Use Agreement The Company has a Fuel Service and Beneficial Use Agreement (“FBUA”) with Northampton Fuel Supply Company, Inc. (“NFS”), a wholly owned subsidiary of Olympus Power. The Company buys fuel from and sends ash to NFS, for the mutual benefit of both facilities, under the terms and rates established in the FBUA. The FBUA expired on December 31, 2023. The Company expensed $621,509 and $1,157,927 for the three months ended March 31, 2024, and 2023, respectively, which is included in fuel expense in the condensed consolidated statements of operations. See the composition of the due to related parties balance as of March 31, 2024, and December 31, 2023, below. Effective February 13, 2024, the Company terminated its Omnibus Services Agreement with Olympus Power, and therefore, Northampton is no longer a related party entity as of March 31, 2024. Fuel Management Agreements Panther Creek Fuel Services LLC Effective August 1, 2012, the Company entered into the Fuel Management Agreement (the “Panther Creek Fuel Agreement”) with Panther Creek Fuel Services LLC, a wholly owned subsidiary of Olympus Services LLC which, in turn, is a wholly owned subsidiary of Olympus Power LLC. Under the Panther Creek Fuel Agreement, Panther Creek Fuel Services LLC provides the Company with operations and maintenance services with respect to the Facility. The Company reimburses Panther Creek Energy Services LLC for actual wages and salaries. The Company expensed $0 and $478,621 for the three months ended March 31, 2024, and 2023, respectively, which is included in operations and maintenance expense in the condensed consolidated statements of operations. See the composition of the due to related parties balance as of March 31, 2024, and December 31, 2023, below. Effective February 13, 2024, the Company terminated its Omnibus Services Agreement with Olympus Power, and therefore, Panther Creek Fuel Services LLC is no longer a related party entity as of March 31, 2024. Scrubgrass Fuel Services, LLC Effective February 1, 2022, the Company entered into the Fuel Management Agreement (the “Scrubgrass Fuel Agreement”) with Scrubgrass Fuel Services LLC, a wholly owned subsidiary of Olympus Services LLC, which, in turn, is a wholly owned subsidiary of Olympus Power LLC. Under the Scrubgrass Fuel Agreement, Scrubgrass Fuel Services LLC provides the Company with operations and maintenance services with respect to the Facility. The Company reimburses Scrubgrass Energy Services LLC for actual wages and salaries. The Company expensed $0 and $276,119 for the three months ended March 31, 2024, and 2023, respectively, which is included in operations and maintenance expense in the condensed consolidated statements of operations. See the composition of the due to related parties balance as of March 31, 2024, and December 31, 2023, below. Effective February 13, 2024, the Company terminated its Omnibus Services Agreement with Olympus Power, and therefore, Scrubgrass Fuel Services, LLC is no longer a related party entity as of March 31, 2024. O&M Agreements Olympus Power LLC On November 2, 2021, Stronghold LLC entered into an Operations, Maintenance and Ancillary Services Agreement (the “Omnibus Services Agreement”) with Olympus Stronghold Services, LLC (“Olympus Stronghold Services”), whereby Olympus Stronghold Services provided certain operations and maintenance services to Stronghold LLC and employed certain personnel to operate the Plants. Stronghold LLC reimbursed Olympus Stronghold Services for those costs incurred by Olympus Stronghold Services and approved by Stronghold LLC in the course of providing services under the Omnibus Services Agreement, including payroll and benefits costs and insurance costs. The material costs incurred by Olympus Stronghold Services were to be approved by Stronghold LLC. From November 2, 2021, until October 1, 2023, Stronghold LLC also agreed to pay Olympus Stronghold Services a management fee at the rate of $1,000,000 per year, payable monthly for services provided at each of the Plants, and an additional one-time mobilization fee of $150,000 upon the effective date of the Omnibus Services Agreement, which was deferred. Effective October 1, 2022, Stronghold LLC began paying Olympus Stronghold Services a management fee for the Panther Creek Plant in the amount of $500,000 per year, payable monthly for services provided at the Panther Creek Plant. This was a reduction of $500,000 from the $1,000,000 per year management fee that the Company was previously scheduled to pay Olympus Stronghold Services. The Company expensed $30,000 and $235,376 for the three months ended March 31, 2024, and 2023, respectively, which includes the monthly management fees plus reimbursable costs incurred by Olympus Stronghold Services for payroll, benefits and insurance. See the composition of the due to related parties balance as of March 31, 2024, and December 31, 2023, below. On February 13, 2024, Stronghold LLC and Olympus Services entered into a Termination and Release Agreement (the “Termination and Release”) whereby the Omnibus Services Agreement was terminated. The Termination and Release contained a mutual customary release. The Company expects to continue to pay Olympus Power LLC $10,000 per month for ongoing assistance at each of the Scrubgrass Plant and Panther Creek Plant. As disclosed above, effective February 13, 2024, the Company terminated its Omnibus Services Agreement with Olympus Power, and therefore, Olympus Power LLC is no longer a related party entity as of March 31, 2024. Panther Creek Energy Services LLC Effective August 2, 2021, the Company entered into the Operations and Maintenance Agreement (the “O&M Agreement”) with Panther Creek Energy Services LLC, a wholly owned subsidiary of Olympus Services LLC which, in turn, is a wholly owned subsidiary of Olympus Power LLC. Under the O&M Agreement, Panther Creek Energy Services LLC provides the Company with operations and maintenance services with respect to the Facility. The Company reimburses Panther Creek Energy Services LLC for actual wages and salaries. The Company also agreed to pay a management fee of $175,000 per operating year, which is payable monthly, and is adjusted by the consumer price index on each anniversary date of the effective date. The Company expensed $0 and $910,394 for the three months ended March 31, 2024, and 2023, respectively, which includes the monthly management fees plus reimbursable costs incurred by Olympus Stronghold Services for payroll, benefits and insurance. See the composition of the due to related parties balance as of March 31, 2024, and December 31, 2023, below. In connection with the equity contribution agreement, effective July 9, 2021 (the "Equity Contribution Agreement"), the Company entered into the Amended and Restated Operations and Maintenance Agreement (the “Amended O&M Agreement”) with Panther Creek Energy Services LLC. Under the Amended O&M Agreement, the management fee is $250,000 for the twelve-month period following the effective date and $325,000 per year thereafter. The effective date of the Amended O&M Agreement was the closing date of the Equity Contribution Agreement. Effective November 1, 2023, Stronghold LLC no longer pays Olympus Stronghold Services a management fee for the Panther Creek Plant. Effective February 13, 2024, the Company terminated its Omnibus Services Agreement with Olympus Power, and therefore, Panther Creek Energy Services LLC is no longer a related party entity as of March 31, 2024. Scrubgrass Energy Services, LLC Effective February 1, 2022, the Company entered into the Operations and Maintenance Agreement (the “Scrubgrass O&M Agreement”) with Scrubgrass Energy Services LLC, a wholly owned subsidiary of Olympus Services LLC which, in turn, is a wholly owned subsidiary of Olympus Power LLC. Under the Scrubgrass O&M Agreement, Scrubgrass Energy Services LLC provides the Company with operations and maintenance services with respect to the Facility. The Company reimburses Scrubgrass Energy Services LLC for actual wages and salaries. The Company also agreed to pay a management fee of $175,000 per operating year, which is payable monthly, and is adjusted by the consumer price index on each anniversary date of the effective date. The Company expensed $0 and $1,724,112 for the three months ended March 31, 2024, and 2023, respectively, which includes the monthly management fees plus reimbursable costs incurred by Olympus Stronghold Services for payroll, benefits and insurance. See the composition of the due to related parties balance as of March 31, 2024, and December 31, 2023, below. In connection with the Equity Contribution Agreement effective July 9, 2021, the Company entered into the Amended and Restated Operations and Maintenance Agreement (the “Scrubgrass Amended O&M Agreement”) with Scrubgrass Energy Services LLC. Under the Scrubgrass Amended O&M Agreement, the management fee is $250,000 for the twelve-month period following the effective date and $325,000 per year thereafter. The effective date of the Scrubgrass Amended O&M Agreement is the closing date of the Equity Contribution Agreement. Effective October 1, 2022, Stronghold LLC no longer pays Olympus Stronghold Services a management fee for the Scrubgrass Plant. Effective February 13, 2024, the Company terminated its Omnibus Services Agreement with Olympus Power, and therefore, Scrubgrass Energy Services, LLC is no longer a related party entity as of March 31, 2024. Management Services Agreement On April 19, 2023, pursuant to an independent consulting agreement the Company entered into with William Spence in connection with his departure from the Board (the "Spence Consulting Agreement"), Mr. Spence's annualized management fee of $600,000 decreased to the greater of $200,000 or 10% of any economic benefits derived from the sale of beneficial use ash, carbon sequestration efforts or alternative fuel arrangements, in each case, arranged by Mr. Spence. The previous consulting and advisory agreement with Mr. Spence was terminated in connection with entry into the Spence Consulting Agreement. In April 2023, as part of the compensation pursuant to the Spence Consulting Agreement, Mr. Spence also received a one-time grant of 250,000 fully vested shares of the Company's Class A common stock, which was recorded as stock-based compensation in the second quarter of 2023. Warrants On September 13, 2022, the Company entered into a Securities Purchase Agreement with Greg Beard, the Company's chairman and chief executive officer, for the purchase and sale of 60,241 shares of Class A common stock and warrants to purchase 60,241 shares of Class A common stock, at an initial exercise price of $17.50 per share, subsequently amended to $10.10 per share and then $7.51 per share. Refer to Note 15 – Equity Issuances for additional details. Additionally, on April 20, 2023, Mr. Beard invested $1.0 million in exchange for 100,000 shares of Class A common stock and 100,000 pre-funded warrants. Refer to Note 15 – Equity Issuances for additional details. Amounts due to related parties as of March 31, 2024, and December 31, 2023, were as follows: March 31, 2024 December 31, 2023 Coal Valley Sales, LLC $ 503,670 $ 433,195 Panther Creek Operating LLC — 14,511 Northampton Generating Fuel Supply Company, Inc. — 226,951 Olympus Power LLC and other subsidiaries 32,944 44,181 William Spence 83,333 — Due to related parties $ 619,947 $ 718,838 |
CONCENTRATIONS
CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 9 – 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 cryptocurrency 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 cryptocurrency mining and energy industry. Financial instruments which potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents customarily exceed federally insured limits. For accounts receivable, the Company’s significant credit risk is primarily concentrated with CES. CES accounted for approximately 90% and 99% of the Company's Energy Operations segment revenues for the three months ended March 31, 2024 and 2023, respectively. Additionally, approximately 19% and 13% of the Company's total revenue for the three months ended March 31, 2024 and March 31, 2023, respectively, was derived from services provided to two customers. For the three months ended March 31, 2024, and 2023, the Company purchased 55% and 60% of waste coal, respectively, from two suppliers. See Note 8 – Related Party Transactions for further information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES Commitments : As discussed in Note 4 – Equipment Deposits , the Company has entered into various equipment contracts to purchase miners. Most of these contracts required a percentage of deposits upfront and subsequent payments to cover the contracted purchase price of the equipment. Details of the outstanding purchase agreement with MinerVa are summarized below. MinerVa Semiconductor Corp On April 2, 2021, the Company entered into a purchase agreement (the "MinerVa Purchase Agreement") with MinerVa for the acquisition of 15,000 of their MV7 ASIC SHA256 model cryptocurrency miners with a total terahash to be delivered equal to 1.5 million terahash. The price per miner was $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 on June 2, 2021. As of March 31, 2024, there were no remaining deposits owed. In December 2021, the Company extended the deadline for delivery of the MinerVa miners to April 2022. In March 2022, MinerVa was again unable to meet its delivery date and had only delivered approximately 3,200 of the 15,000 miners. As a result, an impairment totaling $12,228,742 was recorded in the first quarter of 2022. Furthermore, in the fourth quarter of 2022, the difference between the fair value of the MinerVa equipment deposits and the carrying value resulted in the Company recording an additional impairment charge of $5,120,000. On July 18, 2022, the Company provided written notice of dispute to MinerVa pursuant to the MinerVa Purchase Agreement. Under the MinerVa Purchase Agreement, the Company and MinerVa were required to work together in good faith towards a resolution for a period of sixty (60) days following this notice, after which, if no settlement had been reached, the Company could end discussions, declare an impasse, and adhere to the dispute resolution provisions of the MinerVa Purchase Agreement. As the 60-day period has expired, the Company is evaluating all available remedies under the MinerVa Purchase Agreement. On October 30, 2023, the Company sent MinerVa a Notice of Impasse. On October 31, 2023, the Company filed a Statement of Claim in Calgary, Alberta against MinerVa for breach of contract related to the MinerVa Purchase Agreement. As of March 31, 2024, MinerVa had delivered, refunded cash or swapped into deliveries of industry-leading miners of equivalent value to approximately 12,700 of the 15,000 miners. As disclosed below, the Company is pursuing legal action through the dispute resolution process, and as a result, the Company no longer expects equipment deliveries. Contingencies: Legal Proceedings The Company experiences litigation in the normal course of business. Management is of the belief that none of this routine litigation will have a material adverse effect on the Company’s financial position or results of operations. McClymonds Supply & Transit Company, Inc. and DTA, L.P. vs. Scrubgrass Generating Company, L.P. On January 31, 2020, McClymonds Supply and Transit Company, Inc. (“McClymonds”) made a Demand for Arbitration, as required by the terms of the Transportation Agreement between McClymonds and Scrubgrass Generating Company, L.P. ("Scrubgrass") dated April 8, 2013 (the “Agreement”). In its demand, McClymonds alleged damages in the amount of $5,042,350 for failure to pay McClymonds for services. On February 18, 2020, Scrubgrass submitted its answering statement denying the claim of McClymonds in its entirety. On March 31, 2020, Scrubgrass submitted its counterclaim against McClymonds in the amount of $6,747,328 as the result of McClymonds’ failure to deliver fuel as required under the terms of the Agreement. Hearings were held from January 31, 2022, to February 3, 2022. On May 9, 2022, an award in the amount of $5.0 million plus interest of approximately $0.8 million was issued in favor of McClymonds. The two managing members of Q Power have executed a binding document to pay the full amount of the award and have begun to pay the full amount of the award, such that there will be no effect on the financial condition of the Company. McClymonds shall have no recourse to the Company with respect to the award. Allegheny Mineral Corporation v. Scrubgrass Generating Company, L.P., Butler County Court of Common Pleas, No. AD 19-11039 In November 2019, Allegheny Mineral Corporation ("Allegheny Mineral") filed suit against the Company seeking payment of approximately $1,200,000 in outstanding invoices. In response, the Company filed counterclaims against Allegheny Mineral asserting breach of contract, breach of express and implied warranties, and fraud in the amount of $1,300,000. After unsuccessful mediation in August 2020, the parties again attempted to mediate the case on October 26, 2022, which led to a mutual agreement to settlement terms of a $300,000 cash payment, and a supply agreement for limestone. Subject to completion of the settlement terms, this matter has been stayed in Butler County Court, and the outstanding litigation has been terminated. Federal Energy Regulatory Commission ("FERC") Matters On November 19, 2021, Scrubgrass received a notice of breach from PJM Interconnection, LLC alleging that Scrubgrass breached Interconnection Service Agreement – No. 1795 (the “ISA”) by failing to provide advance notice to PJM Interconnection, LLC and Mid-Atlantic Interstate Transmission, LLC pursuant to ISA, Appendix 2, section 3, of modifications made to the Scrubgrass Plant. On December 16, 2021, Scrubgrass responded to the notice of breach and respectfully disagreed that the ISA had been breached. On January 7, 2022, Scrubgrass participated in an information gathering meeting with representatives from PJM regarding the notice of breach and continued to work with PJM regarding the dispute, including conducting a necessary study agreement with respect to the Scrubgrass Plant. On January 20, 2022, the Company sent PJM a letter regarding the installation of a resistive computational load bank at the Panther Creek Plant. On March 1, 2022, the Company executed a necessary study agreement with respect to the Panther Creek Plant. PJM’s investigation and discussions with the Company regarding the notice of breach at the Scrubgrass Plant and the Panther Creek Plant are ongoing, including with respect to interim procedures, until the Company receives revised Interconnect Service Agreements for the Scrubgrass Plant and the Panther Creek Plant. Stronghold does not expect to make any material payments related to any resettlements of prior billing statements. The Company continues to expect to source electricity for its computational load banks from the Scrubgrass and Panther Creek Plants; however, Stronghold expects that, until the revised Interconnect Service Agreements are finalized and potentially thereafter, the Company will pay retail rates for electricity that is imported from the grid should it be unable to fully supply power to the computational load banks. On May 11, 2022, the Division of Investigations of the FERC Office of Enforcement (“OE”) informed the Company that the OE was conducting a non-public preliminary investigation concerning Scrubgrass’ compliance with various aspects of the PJM tariff. The OE requested that the Company provide certain information and documents concerning Scrubgrass’ operations by June 10, 2022. On July 13, 2022, after being granted an extension to respond by the OE, the Company submitted a formal response to the OE's request. Since the Company submitted its formal response to the OE's request, the Company has had further discussions with the OE regarding the Company's formal response. The OE's investigation, and discussions between the OE and the Company, regarding potential instances of non-compliance is continuing. The Company does not believe that the PJM notice of breach, the Panther Creek necessary study agreement, discussions regarding other potential issues related to the computational load bank, including power consumption and potential resettlements of billing statements for certain prior months, or the preliminary investigation by the OE will have a material adverse effect on the Company’s reported financial position or results of operations, although the Company cannot predict with certainty the final outcome of these proceedings. Shareholder Securities and Derivative Lawsuits On April 14, 2022, the Company, and certain of our current and former directors, officers and underwriters were named in a putative class action complaint filed in the United States District Court for the Southern District of New York (Winter v. Stronghold Digital Mining, Case No. 1:22-cv-3088). On August 4, 2022, co-lead plaintiffs were appointed. On October 18, 2022, the plaintiffs filed an amended complaint, alleging that the Company made misleading statements and/or failed to disclose material facts in violation of Section 11 of the Securities Act, 15 U.S.C. §77k and Section 15 of the Securities Act of 1933, as amended (the "Securities Act"), about the Company’s business, operations, and prospects in the Company’s registration statement on Form S-1 related to its initial public offering, and when subsequent disclosures were made regarding these operational issues when the Company announced its fourth quarter and full year 2021 financial results, the Company’s stock price fell, causing significant losses and damages. As relief, the plaintiffs are seeking, among other things, compensatory damages. The amended complaint also alleged violations of Section 12 of the Securities Act based on alleged false or misleading statements in the Company’s prospectus related to its initial public offering. On December 19, 2022, the Company filed a motion to dismiss, which the court largely denied on August 10, 2023. On September 8, 2023, the Court entered a Case Management Order, which set a number of case deadlines, including the completion of all discovery by April 21, 2025. On January 19, 2024, the Court granted the motion of one co-lead plaintiff to withdraw from the case, leaving one plaintiff remaining. Plaintiff filed a motion for class certification on February 19, 2024 and defendants’ response to that motion is due on June 10, 2024. The defendants continue to believe the allegations in the complaint are without merit and intend to defend these suits vigorously. On September 5, 2023, and September 15, 2023, respectively, purported shareholders of the Company filed two derivative actions in the United States District Court for the Southern District of New York (Wilson v. Beard, Case No. 1:23-cv-7840, and Navarro v. Beard, Case No. 1:23-cv-08714) against certain of our current and former directors and officers, and the Company as a nominal defendant. The shareholders generally allege that the individual defendants breached their fiduciary duties by making or failing to prevent the misrepresentations alleged in the putative Winter securities class action, and assert claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, corporate waste, and for contribution under Section 11 of the Securities Act and Section 21D of the Securities Exchange Act of 1934. The two cases were consolidated on October 24, 2023 under the case name In Re Stronghold Digital Mining, Inc., Stockholder Derivative Litigation (the “Consolidated Derivative Action”). On November 21, 2023 the Court entered an order staying the Consolidated Derivative Action pending a ruling on the motion for class certification in the putative Winter securities class action. The defendants believe the allegations in the Consolidated Derivative Action are without merit and intend to defend the suits vigorously. On November 14, 2023, and February 4, 2024, respectfully, purported shareholders of the Company filed two additional derivative actions in the United States District Court for the Southern District of New York (Parker v. Beard, Case No. 23 Civ. 10028 and Bruno v. Beard, Case No. 24 Civ. 798) against certain of our current and former directors and officers, and the Company as a nominal defendant. These lawsuits assert substantially the same claims and allegations as the Wilson and Navarro complaints. Plaintiff in the Bruno action had previously served a books and records demand, as well as an investigation/litigation demand, on the Company making similar allegations. On April 24, 2024, the Parker and Bruno cases were consolidated with the Consolidated Derivative Action by agreement of the parties. As a result, the Parker and Bruno cases are also stayed pending further proceedings in the putative Winter securities class action. Mark Grams v. Treis Blockchain, LLC, Chain Enterprises, LLC, Cevon Technologies, LLC, Stronghold Digital Mining, LLC, David Pence, Michael Bolick, Senter Smith, Brian Lambretti and John Chain On May 4, 2023, Stronghold Digital Mining, LLC, a subsidiary of the Company ("Stronghold"), was named as one of several defendants in a complaint filed in the United States District Court for the Middle District of Alabama Eastern Division (the "Grams Complaint"). The Grams Complaint alleges that certain Bitcoin miners the Company purchased from Treis Blockchain, LLC ("Treis") in December 2021 contained firmware that is alleged to have constituted “trade secrets” owned by Grams. Principally, the Grams Complaint included allegations of misappropriation of these alleged trade secrets. The Company believes that the allegations against it and its subsidiaries in the Grams Complaint are without merit and intends to vigorously defend the suit. To that end, the Company has entered into a joint defense agreement with Treis and the other named defendants. The Company has also entered into a tolling agreement with Treis. The Company filed a motion to dismiss the case for lack of personal jurisdiction on June 23, 2023. On October 6, 2023, Grams filed an Amended Complaint, to which the Company filed a renewed Motion to Dismiss for Lack of Personal Jurisdiction, or in the Alternative to Transfer the Case to the District of South Carolina, in addition to a renewed Motion to Dismiss several causes of action alleged in the Amended Complaint. On December 8, 2023, the Company filed its reply to Plaintiff’s response to the Company's Motion to Transfer or Alternatively to Dismiss pursuant to Rule 12(b)(2). On April 12, 2024, Grams filed an opposition to the Company’s previously filed motion to dismiss. On April 22, 2024, the Company filed a reply in support of its motion to dismiss. A ruling on the pending motions is expected to be forthcoming in the foreseeable future. The Company does not believe the Grams Complaint will have a material adverse effect on the Company’s reported financial position or results of operations. MinerVa Purchase Agreement On July 18, 2022, the Company provided written notice of dispute to MinerVa pursuant to the MinerVa Purchase Agreement. Under the MinerVa Purchase Agreement, the Company and MinerVa were required to work together in good faith towards a resolution for a period of sixty (60) days following this notice, after which, if no settlement had been reached, the Company could end discussions, declare an impasse and adhere to the dispute resolution provisions of the MinerVa Purchase Agreement. On October 30, 2023, the Company sent MinerVa a Notice of Impasse. On October 31, 2023, the Company filed a Statement of Claim in Calgary, Alberta against MinerVa for breach of contract related to the MinerVa Purchase Agreement. John W. Krynock v. Panther Creek Fuel Services, LLC c/o Olympus Power On June 2, 2023, Panther Creek Fuel Services, LLC, an affiliate of the Company was named as a defendant in a Federal Black Lung Case under Title IV of the Federal Coal Mine Health and Safety Act of 1969. The Plaintiff previously settled a state law claim with a predecessor in interest of the Company. The Company denies any liability in connection with the claim and intends to defend the suit vigorously. The Company does not believe that the claim will have a material adverse effect on the Company’s reported financial position or results of operations, although the Company cannot predict with any certainty the outcome of these proceedings. Department of Environmental Protection On November 9, 2023, the Company entered into a Consent Order and Agreement (“COA”) with the Commonwealth of Pennsylvania, Department of Environmental Protection (“DEP”). Pursuant to the COA, the DEP found that a July 5, 2022, inspection of the Company’s Scrubgrass Plant observed that coal ash at the Scrubgrass Plant exceeded the capacity of the permitted ash conditioning area as approved by the DEP on September 12, 2007. The COA found that the Scrubgrass Plant’s storage of excess waste coal ash violated certain provisions of the Solid Waste Management Act and Pennsylvania Code, among other items. Pursuant to the COA, Scrubgrass must pay a civil penalty in the amount of $28,800, in two equal installments within ninety (90) days of entry into the COA. The Company made the first payment to the DEP on November 10, 2023. The terms of the COA also require the Company to remove (i) a minimum of 80,000 tons of excess waste coal ash by November 9, 2024, (ii) 160,000 aggregate tons of excess waste coal ash by November 9, 2025, (iii) 220,000 aggregate tons of excess waste coal ash by November 9, 2026, and (iv) all remaining excess waste coal ash by November 9, 2027, such that the ash conditioning area is consistent with the specifications accepted by the DEP on September 7, 2007. Beginning on January 24, 2024, the Company is to provide quarterly progress reports to the DEP. In connection with the COA, the Company has had preliminary discussions with the Pennsylvania Public Utilities Commission (“PUC”) and the DEP regarding potential resettlement or forfeiture of Pennsylvania Tier II Alternative Energy Credits during any period of non-compliance, expected to be limited to July 5-22, 2022. In February of 2024, the Company retired 25,968 Alternative Energy Credits reflective of the amount of credits generated during the period of non-compliance from July 5-22, 2022. On December 15, 2023, the Scrubgrass Creek Watershed Association filed a Notice of Appeal to the Environmental Hearing Board regarding the COA (the “COA Appeal”). The Company does not believe the COA, COA Appeal or discussions with the PUC will have a material adverse effect on the Company’s reported financial position or results of operations. Save Carbon County On March 26, 2024, the Company, Panther Creek Power Operating, LLC, Stronghold and Stronghold LLC were named as defendants (collectively, the “Stronghold Defendants”) in a complaint filed in the Court of Common Pleas in Philadelphia County by Save Carbon County (the “Complaint”). In addition to the Stronghold Defendants, Josh Shapiro in his capacity as the Governor of the Commonwealth of Pennsylvania, the Pennsylvania Department of Environmental Protection, Jessica Shirley in her capacity as the Interim Secretary for the Pennsylvania Department of Environmental Protection, and the Pennsylvania Public Utility Commission were named as defendants. Pursuant to the Complaint, Save Carbon County alleges certain public nuisance, private nuisance, products liability, and negligence claims against the Stronghold Defendants and demands compensatory and punitive damages, together with costs of suit, interest, and attorney’s fees. The Company believes the Complaint is without merit. The Company does not believe that the claim will have a material adverse effect on the Company’s reported financial position or results of operations, although the Company cannot predict with any certainty the outcome of these proceedings. |
REDEEMABLE COMMON STOCK
REDEEMABLE COMMON STOCK | 3 Months Ended |
Mar. 31, 2024 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE COMMON STOCK | NOTE 11 – REDEEMABLE COMMON STOCK Class V common stock represented 15.7% and 17.8% ownership of Stronghold LLC, as of March 31, 2024, and December 31, 2023, respectively, granting the owners of Q Power economic rights and, as a holder, one vote on all matters to be voted on by the Company's stockholders generally, and a redemption right into Class A shares. Refer to Note 12 – Noncontrolling Interests for more details. The Company classifies its Class V common stock as redeemable common stock in the accompanying condensed consolidated balance sheets 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 who determine whether to make a cash payment upon a Stronghold LLC unit holder’s exercise of its redemption rights. Redeemable common stock 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 March 31, 2024. The Company recorded redeemable common stock as presented in the table below. Common - Class V Shares Amount Balance - December 31, 2023 2,405,760 $ 20,416,116 Net income attributable to noncontrolling interest — 918,287 Maximum redemption right valuation — (11,629,477) Balance - March 31, 2024 2,405,760 $ 9,704,926 NOTE 15 – EQUITY ISSUANCES Series C Convertible Preferred Stock On December 30, 2022, the Company entered into the Exchange Agreement with the Purchasers of the Amended May 2022 Notes whereby the Amended May 2022 Notes were to be exchanged for shares of Series C Preferred Stock that, among other things, will convert into shares of Class A common stock or pre-funded warrants that may be exercised for shares of Class A common stock, at a conversion rate equal to the stated value of $1,000 per share plus cash in lieu of fractional shares, divided by a conversion price of $4.00 per share of Class A common stock. Upon the fifth anniversary of the Series C Preferred Stock, each outstanding share of Series C Preferred Stock will automatically and immediately convert into Class A common stock or pre-funded warrants. In the event of a liquidation, the Purchasers shall be entitled to receive an amount per share of Series C Preferred Stock equal to its stated value of $1,000 per share. The Exchange Agreement closed on February 20, 2023. Pursuant to the Exchange Agreement, the Purchasers received an aggregate 23,102 shares of the Series C Preferred Stock, in exchange for the cancellation of an aggregate $17,893,750 of principal and accrued interest, representing all of the amounts owed to the Purchasers under the May 2022 Notes. On February 20, 2023, one Purchaser converted 1,530 shares of the Series C Preferred Stock to 382,500 shares of the Company’s Class A common stock. The rights and preferences of the Series C Preferred Stock are designated in a certificate of designation, and the Company provided certain registration rights to the Purchasers. As of March 31, 2024, 5,990 shares of the Series C Preferred Stock remain outstanding following the Series D Exchange Agreement described below. Series D Exchange Agreement On November 13, 2023, the Company consummated a transaction (the “Series D Exchange Transaction”) pursuant to an exchange agreement, dated November 13, 2023 (the “Series D Exchange Agreement”) with Adage Capital Partners, LP (the “Holder”) whereby the Company issued to the Holder an aggregate of 15,582 shares of a newly created series of preferred stock, the Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”), in exchange for 15,582 shares of Series C Preferred Stock held by the Holder, which represented all of the shares of Series C Preferred Stock held by the Holder. The Series D Preferred Stock contains substantially similar terms as the Series C Preferred Stock except with respect to a higher conversion price. The Series D Exchange Agreement contains representations, warranties, covenants, releases, and indemnities customary for transactions of this type, as well as certain trading volume restrictions. As a result of the Series D Exchange Transaction, the Company recorded a deemed contribution of $20,492,568 resulting from the extinguishment of 15,582 shares of Series C Preferred Stock associated with the Series D Exchange Transaction. The deemed contribution represented the difference between the carrying value of the existing Series C Preferred Stock and the estimated fair value of the newly-issued Series D Preferred Stock. During the first quarter of 2024, the remaining 7,610 shares of Series D Convertible Preferred Stock were converted to 1,414,117 shares of Class A common stock. During the three months ended March 31, 2024, the Company incurred $18,197 of final offering costs which has been capitalized within additional paid-in capital in the condensed consolidated balance sheet. September 2022 Private Placement On September 13, 2022, the Company entered into Securities Purchase Agreements with Armistice and Greg Beard, the Company's chairman and chief executive officer (together with Armistice, the “September 2022 Private Placement Purchasers”), for the purchase and sale of 227,435 and 60,241 shares, respectively, of Class A common stock, par value $0.0001 per share at a purchase price of $16.00 and $16.60, respectively, and warrants to purchase an aggregate of 560,241 shares of Class A common stock, at an initial exercise price of $17.50 per share (subject to certain adjustments). Subject to certain ownership limitations, such warrants are exercisable upon issuance and will be exercisable for five and a half years commencing upon the date of issuance. Armistice also purchased the pre-funded warrants to purchase 272,565 shares of Class A common stock at a purchase price of $16.00 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.001 per warrant share. The transaction closed on September 19, 2022. The gross proceeds from the sale of such securities, before deducting offering expenses, were approximately $9.0 million. The warrant liabilities are subject to remeasurement at each balance sheet date, and any change in fair value is recognized as "changes in fair value of warrant liabilities" in the condensed consolidated statements of operations. The fair value of the warrant liabilities was estimated as of March 31, 2024, using a Black-Scholes model with significant inputs as follows: March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.75 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 1,970,318 In connection with the closing of the December 2023 Private Placement (discussed below), the Company and Armistice entered into an amendment to, among other things, adjust the strike price of the remaining outstanding warrants from $10.10 per share to $7.00 per share and extend the expiration date through December 31, 2029. Furthermore, in January 2024, the Company and Mr. Beard entered into an amendment to, among other things, adjust the strike price of the remaining outstanding warrants from $10.10 per share to $7.51 per share. April 2023 Private Placement On April 20, 2023, the Company entered into Securities Purchase Agreements with an institutional investor and the Company’s chairman and chief executive officer, Greg Beard, for the purchase and sale of shares of Class A common stock, par value $0.0001 per share at a purchase price of $10.00 per share, and warrants to purchase shares of Class A common stock, at an initial exercise price of $11.00 per share (subject to certain adjustments in accordance with the terms thereof). Pursuant to the Securities Purchase Agreements, the institutional investor invested $9.0 million in exchange for an aggregate of 900,000 shares of Class A common stock and pre-funded warrants, and Mr. Beard invested $1.0 million in exchange for an aggregate of 100,000 shares of Class A common stock, in each case at a price of $10.00 per share equivalent. Further, the institutional investor and Mr. Beard received warrants exercisable for 900,000 shares and 100,000 shares, respectively, of Class A common stock. Subject to certain ownership limitations, the warrants are exercisable six months after issuance. The warrants are exercisable for five and a half years commencing upon the date of issuance, subject to certain ownership limitations. The pre-funded warrants have an exercise price of $0.001 per warrant share and are immediately exercisable, subject to certain ownership limitations . The gross proceeds from the April 2023 Private Placement, before deducting offering expenses, were approximately $10.0 million. The April 2023 Private Placement closed on April 21, 2023. The warrant liabilities are subject to remeasurement at each balance sheet date, and any change in fair value is recognized as "changes in fair value of warrant liabilities" in the condensed consolidated statements of operations. The fair value of the warrant liabilities was estimated as of March 31, 2024, using a Black-Scholes model with significant inputs as follows: March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.75 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 3,540,238 Additionally, as previously disclosed, the Company entered into Securities Purchase Agreements with the September 2022 Private Placement Purchasers for, in part, warrants to purchase an aggregate of 560,241 shares of Class A common stock, at an exercise price of $17.50 per share. On April 20, 2023, the Company and the September 2022 Private Placement Purchasers entered into amendments to, among other things, adjust the strike price of the warrants from $17.50 per share to $10.10 per share. Pursuant to Greg Beard's employment agreement with the Company dated September 6, 2023, Mr. Beard is eligible for an annual bonus if the applicable targets to achieve such annual bonus are met. For Mr. Beard's 2023 annual bonus, on January 29, 2024, the Compensation Committee of the Company amended Mr. Beard's warrants under the September 2022 Private Placement (described above) and the April 2023 Private Placement such that the exercise price of the warrants was adjusted to $7.51. December 2023 Private Placement On December 21, 2023, the Company entered into a Securities Purchase Agreement with an institutional investor for the purchase and sale of shares of Class A common stock, par value $0.0001 per share at a purchase price of $6.71 per share, and warrants to purchase shares of Class A common stock, at an initial exercise price of $7.00 per share (the “December 2023 Private Placement”). Pursuant to the Securities Purchase Agreement, the institutional investor invested $15.4 million in exchange for an aggregate of 2,300,000 shares of Class A common stock and pre-funded warrants at a price of $6.71 per share equivalent. Further, the institutional investor received warrants exercisable for 2,300,000 shares of Class A common stock. Subject to certain ownership limitations, the warrants are exercisable six months after issuance. The warrants are exercisable for five and a half years commencing upon the date of issuance, subject to certain ownership limitations. The pre-funded warrants have an exercise price of $0.001 per warrant share and are immediately exercisable, subject to certain ownership limitations. The gross proceeds from the December 2023 Private Placement, before deducting offering expenses, were approximately $15.4 million. The December 2023 Private Placement closed on December 21, 2023. The warrant liabilities are subject to remeasurement at each balance sheet date, and any change in fair value is recognized as "changes in fair value of warrant liabilities" in the condensed consolidated statements of operations. The fair value of the warrant liabilities was estimated as of March 31, 2024, using a Black-Scholes model with significant inputs as follows: March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.25 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 8,022,153 ATM Agreement On May 23, 2023, the Company entered into an at-the-market offering agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC ("HCW") to sell shares of its Class A common stock having aggregate sales proceeds of up to $15.0 million (the "ATM Shares"), from time to time, through an "at the market" equity offering program under which HCW acts as sales agent and/or principal. Pursuant to the ATM Agreement, the ATM Shares may be offered and sold through HCW in transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on The Nasdaq Stock Market LLC or sales made to or through a market maker other than on an exchange or in negotiated transactions. Under the ATM Agreement, HCW is entitled to compensation equal to 3.0% of the gross proceeds from the sale of the ATM Shares sold through HCW. The Company has no obligation to sell any of the ATM Shares under the ATM Agreement and may at any time suspend solicitations and offers under the ATM Agreement. The Company and HCW may each terminate the ATM Agreement at any time upon specified prior written notice. The ATM Shares have been and are being issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-271671), filed with the SEC on May 5, 2023, as amended by Amendment No. 1 to the registration statement filed with the SEC on May 23, 2023 (as amended, the “ATM Registration Statement”). Pursuant to the ATM Agreement, no sales may be made until 30 days following the date on which the ATM Registration Statement is declared effective. The ATM Registration Statement was declared effective on May 25, 2023. During the three months ended March 31, 2024, the Company sold zero ATM Shares. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
NONCONTROLLING INTERESTS | NOTE 12 – NONCONTROLLING INTERESTS The Company is the sole managing member of Stronghold LLC and, as a result, consolidates the financial results of Stronghold LLC and reports a noncontrolling 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, are accounted for as redeemable common stock transactions. As such, future redemptions or direct exchanges of common units of Stronghold LLC by the continuing equity owners will result in changes to the amount recorded as noncontrolling interest. Refer to Note 11 – Redeemable Common Stock which describes the redemption rights of the noncontrolling interest. Class V common stock represented 15.7% and 17.8% ownership of Stronghold LLC as of March 31, 2024, and December 31, 2023, respectively, granting the owners of Q Power economic rights and, as a holder, one vote on all matters to be voted on by the Company's stockholders generally, and a redemption right into shares of Class A common stock. The following summarizes the redeemable common stock adjustments pertaining to the noncontrolling interest as of and for the three months ended March 31, 2024: Class V Common Stock Outstanding Fair Value Price Redeemable Common Stock Adjustments Balance - December 31, 2023 2,405,760 $ 8.49 $ 20,416,116 Net income attributable to noncontrolling interest — 918,287 Adjustment of redeemable common stock to redemption amount (1) — (11,629,477) Balance - March 31, 2024 2,405,760 $ 4.03 $ 9,704,926 (1) Redeemable common stock adjustment based on Class V common stock outstanding at fair value price at each quarter end, using a 10-day variable weighted average price ("VWAP") of trading dates including the closing date. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13 – STOCK-BASED COMPENSATION Stock-based compensation expense was $1,939,120 and $2,449,324 for the three months ended March 31, 2024, and 2023, respectively, and is included in general and administrative expense in the condensed consolidated statements of operations. There was no income tax benefit related to stock-based compensation expense due to the Company having a full valuation allowance recorded against its deferred income tax assets. On January 22, 2024, the Company entered into award agreements with certain executive officers. In total, the executive officers were granted 135,000 restricted stock units. Similarly, on March 15, 2023, the Company entered into award agreements with certain executive officers. In total, the executive officers were granted 272,500 restricted stock units in exchange for the cancellation of 98,669 stock options and 25,000 performance share units previously granted to the executive officers. All restricted stock units were granted under the Company’s previously adopted Omnibus Incentive Plan, dated October 19, 2021. |
WARRANTS
WARRANTS | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
WARRANTS | NOTE 14 – WARRANTS The following table summarizes outstanding warrants as of March 31, 2024. Number of Warrants Outstanding as of December 31, 2023 5,277,985 Issued — Exercised — Outstanding as of March 31, 2024 5,277,985 September 2022 Private Placement On September 13, 2022, the Company entered into Securities Purchase Agreements with Armistice Capital Master Fund Ltd. ("Armistice") and Greg Beard, the Company's chairman and chief executive officer, for the purchase and sale of 227,435 and 60,241 shares of Class A common stock, respectively, and warrants to purchase an aggregate of 560,241 shares of Class A common stock, at an initial exercise price of $17.50 per share. Refer to Note 15 – Equity Issuances for additional details and information regarding subsequent amendments. As part of the transaction, Armistice purchased the pre-funded warrants for 272,565 shares of Class A common stock at a purchase price of $16.00 per warrant. The pre-funded warrants have an exercise price of $0.001 per warrant share. In April 2023, the Company, Armistice and Mr. Beard entered into amendments to, among other things, adjust the strike price of the remaining outstanding warrants from $17.50 per share to $10.10 per share. In December 2023, the Company and Armistice entered into an amendment to, among other things, adjust the strike price of the remaining outstanding warrants from $10.10 per share to $7.00 per share and extend the expiration date through December 31, 2029. Furthermore, in January 2024, the Company and Mr. Beard entered into an amendment to, among other things, adjust the strike price of the remaining outstanding warrants from $10.10 per share to $7.51 per share. Refer to Note 15 – Equity Issuances for additional details. As of March 31, 2024, 560,241 warrants issued in connection with the September 2022 Private Placement remain outstanding. April 2023 Private Placement On April 20, 2023, the Company entered into Securities Purchase Agreements with an institutional investor and Greg Beard, the Company's chairman and chief executive officer, for the purchase and sale of shares of Class A common stock, par value $0.0001 per share at a purchase price of $10.00 per share, and warrants to purchase shares of Class A common stock, at an initial exercise price of $11.00 per share (the “April 2023 Private Placement”). Pursuant to the Securities Purchase Agreements, the institutional investor invested $9.0 million in exchange for an aggregate of 900,000 shares of Class A common stock and pre-funded warrants, and Mr. Beard invested $1.0 million in exchange for an aggregate of 100,000 shares of Class A common stock, in each case at a price of $10.00 per share equivalent. Further, the institutional investor and Mr. Beard received warrants exercisable for 900,000 shares and 100,000 shares, respectively, of Class A common stock. Refer to Note 15 – Equity Issuances for additional details. In January 2024, the Company and Mr. Beard entered into an amendment to, among other things, adjust the strike price of the remaining outstanding warrants from $11.00 per share to $7.51 per share. Refer to Note 15 – Equity Issuances for additional details. As of March 31, 2024, warrants exercisable for a total of 1,000,000 shares of Class A common stock remain outstanding. December 2023 Private Placement On December 21, 2023, the Company entered into a Securities Purchase Agreement with an institutional investor for the purchase and sale of shares of Class A common stock, par value $0.0001 per share at a purchase price of $6.71 per share, and warrants to purchase shares of Class A common stock, at an initial exercise price of $7.00 per share. Pursuant to the Securities Purchase Agreement, the institutional investor invested $15.4 million in exchange for an aggregate of 2,300,000 shares of Class A common stock and pre-funded warrants at a price of $6.71 per share equivalent. Further, the institutional investor received warrants exercisable for 2,300,000 shares of Class A common stock. Refer to Note 15 – Equity Issuances for additional details. As of March 31, 2024, warrants exercisable for a total of 3,600,000 shares of Class A common stock remain outstanding. |
EQUITY ISSUANCES
EQUITY ISSUANCES | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
EQUITY ISSUANCES | NOTE 11 – REDEEMABLE COMMON STOCK Class V common stock represented 15.7% and 17.8% ownership of Stronghold LLC, as of March 31, 2024, and December 31, 2023, respectively, granting the owners of Q Power economic rights and, as a holder, one vote on all matters to be voted on by the Company's stockholders generally, and a redemption right into Class A shares. Refer to Note 12 – Noncontrolling Interests for more details. The Company classifies its Class V common stock as redeemable common stock in the accompanying condensed consolidated balance sheets 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 who determine whether to make a cash payment upon a Stronghold LLC unit holder’s exercise of its redemption rights. Redeemable common stock 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 March 31, 2024. The Company recorded redeemable common stock as presented in the table below. Common - Class V Shares Amount Balance - December 31, 2023 2,405,760 $ 20,416,116 Net income attributable to noncontrolling interest — 918,287 Maximum redemption right valuation — (11,629,477) Balance - March 31, 2024 2,405,760 $ 9,704,926 NOTE 15 – EQUITY ISSUANCES Series C Convertible Preferred Stock On December 30, 2022, the Company entered into the Exchange Agreement with the Purchasers of the Amended May 2022 Notes whereby the Amended May 2022 Notes were to be exchanged for shares of Series C Preferred Stock that, among other things, will convert into shares of Class A common stock or pre-funded warrants that may be exercised for shares of Class A common stock, at a conversion rate equal to the stated value of $1,000 per share plus cash in lieu of fractional shares, divided by a conversion price of $4.00 per share of Class A common stock. Upon the fifth anniversary of the Series C Preferred Stock, each outstanding share of Series C Preferred Stock will automatically and immediately convert into Class A common stock or pre-funded warrants. In the event of a liquidation, the Purchasers shall be entitled to receive an amount per share of Series C Preferred Stock equal to its stated value of $1,000 per share. The Exchange Agreement closed on February 20, 2023. Pursuant to the Exchange Agreement, the Purchasers received an aggregate 23,102 shares of the Series C Preferred Stock, in exchange for the cancellation of an aggregate $17,893,750 of principal and accrued interest, representing all of the amounts owed to the Purchasers under the May 2022 Notes. On February 20, 2023, one Purchaser converted 1,530 shares of the Series C Preferred Stock to 382,500 shares of the Company’s Class A common stock. The rights and preferences of the Series C Preferred Stock are designated in a certificate of designation, and the Company provided certain registration rights to the Purchasers. As of March 31, 2024, 5,990 shares of the Series C Preferred Stock remain outstanding following the Series D Exchange Agreement described below. Series D Exchange Agreement On November 13, 2023, the Company consummated a transaction (the “Series D Exchange Transaction”) pursuant to an exchange agreement, dated November 13, 2023 (the “Series D Exchange Agreement”) with Adage Capital Partners, LP (the “Holder”) whereby the Company issued to the Holder an aggregate of 15,582 shares of a newly created series of preferred stock, the Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”), in exchange for 15,582 shares of Series C Preferred Stock held by the Holder, which represented all of the shares of Series C Preferred Stock held by the Holder. The Series D Preferred Stock contains substantially similar terms as the Series C Preferred Stock except with respect to a higher conversion price. The Series D Exchange Agreement contains representations, warranties, covenants, releases, and indemnities customary for transactions of this type, as well as certain trading volume restrictions. As a result of the Series D Exchange Transaction, the Company recorded a deemed contribution of $20,492,568 resulting from the extinguishment of 15,582 shares of Series C Preferred Stock associated with the Series D Exchange Transaction. The deemed contribution represented the difference between the carrying value of the existing Series C Preferred Stock and the estimated fair value of the newly-issued Series D Preferred Stock. During the first quarter of 2024, the remaining 7,610 shares of Series D Convertible Preferred Stock were converted to 1,414,117 shares of Class A common stock. During the three months ended March 31, 2024, the Company incurred $18,197 of final offering costs which has been capitalized within additional paid-in capital in the condensed consolidated balance sheet. September 2022 Private Placement On September 13, 2022, the Company entered into Securities Purchase Agreements with Armistice and Greg Beard, the Company's chairman and chief executive officer (together with Armistice, the “September 2022 Private Placement Purchasers”), for the purchase and sale of 227,435 and 60,241 shares, respectively, of Class A common stock, par value $0.0001 per share at a purchase price of $16.00 and $16.60, respectively, and warrants to purchase an aggregate of 560,241 shares of Class A common stock, at an initial exercise price of $17.50 per share (subject to certain adjustments). Subject to certain ownership limitations, such warrants are exercisable upon issuance and will be exercisable for five and a half years commencing upon the date of issuance. Armistice also purchased the pre-funded warrants to purchase 272,565 shares of Class A common stock at a purchase price of $16.00 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.001 per warrant share. The transaction closed on September 19, 2022. The gross proceeds from the sale of such securities, before deducting offering expenses, were approximately $9.0 million. The warrant liabilities are subject to remeasurement at each balance sheet date, and any change in fair value is recognized as "changes in fair value of warrant liabilities" in the condensed consolidated statements of operations. The fair value of the warrant liabilities was estimated as of March 31, 2024, using a Black-Scholes model with significant inputs as follows: March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.75 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 1,970,318 In connection with the closing of the December 2023 Private Placement (discussed below), the Company and Armistice entered into an amendment to, among other things, adjust the strike price of the remaining outstanding warrants from $10.10 per share to $7.00 per share and extend the expiration date through December 31, 2029. Furthermore, in January 2024, the Company and Mr. Beard entered into an amendment to, among other things, adjust the strike price of the remaining outstanding warrants from $10.10 per share to $7.51 per share. April 2023 Private Placement On April 20, 2023, the Company entered into Securities Purchase Agreements with an institutional investor and the Company’s chairman and chief executive officer, Greg Beard, for the purchase and sale of shares of Class A common stock, par value $0.0001 per share at a purchase price of $10.00 per share, and warrants to purchase shares of Class A common stock, at an initial exercise price of $11.00 per share (subject to certain adjustments in accordance with the terms thereof). Pursuant to the Securities Purchase Agreements, the institutional investor invested $9.0 million in exchange for an aggregate of 900,000 shares of Class A common stock and pre-funded warrants, and Mr. Beard invested $1.0 million in exchange for an aggregate of 100,000 shares of Class A common stock, in each case at a price of $10.00 per share equivalent. Further, the institutional investor and Mr. Beard received warrants exercisable for 900,000 shares and 100,000 shares, respectively, of Class A common stock. Subject to certain ownership limitations, the warrants are exercisable six months after issuance. The warrants are exercisable for five and a half years commencing upon the date of issuance, subject to certain ownership limitations. The pre-funded warrants have an exercise price of $0.001 per warrant share and are immediately exercisable, subject to certain ownership limitations . The gross proceeds from the April 2023 Private Placement, before deducting offering expenses, were approximately $10.0 million. The April 2023 Private Placement closed on April 21, 2023. The warrant liabilities are subject to remeasurement at each balance sheet date, and any change in fair value is recognized as "changes in fair value of warrant liabilities" in the condensed consolidated statements of operations. The fair value of the warrant liabilities was estimated as of March 31, 2024, using a Black-Scholes model with significant inputs as follows: March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.75 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 3,540,238 Additionally, as previously disclosed, the Company entered into Securities Purchase Agreements with the September 2022 Private Placement Purchasers for, in part, warrants to purchase an aggregate of 560,241 shares of Class A common stock, at an exercise price of $17.50 per share. On April 20, 2023, the Company and the September 2022 Private Placement Purchasers entered into amendments to, among other things, adjust the strike price of the warrants from $17.50 per share to $10.10 per share. Pursuant to Greg Beard's employment agreement with the Company dated September 6, 2023, Mr. Beard is eligible for an annual bonus if the applicable targets to achieve such annual bonus are met. For Mr. Beard's 2023 annual bonus, on January 29, 2024, the Compensation Committee of the Company amended Mr. Beard's warrants under the September 2022 Private Placement (described above) and the April 2023 Private Placement such that the exercise price of the warrants was adjusted to $7.51. December 2023 Private Placement On December 21, 2023, the Company entered into a Securities Purchase Agreement with an institutional investor for the purchase and sale of shares of Class A common stock, par value $0.0001 per share at a purchase price of $6.71 per share, and warrants to purchase shares of Class A common stock, at an initial exercise price of $7.00 per share (the “December 2023 Private Placement”). Pursuant to the Securities Purchase Agreement, the institutional investor invested $15.4 million in exchange for an aggregate of 2,300,000 shares of Class A common stock and pre-funded warrants at a price of $6.71 per share equivalent. Further, the institutional investor received warrants exercisable for 2,300,000 shares of Class A common stock. Subject to certain ownership limitations, the warrants are exercisable six months after issuance. The warrants are exercisable for five and a half years commencing upon the date of issuance, subject to certain ownership limitations. The pre-funded warrants have an exercise price of $0.001 per warrant share and are immediately exercisable, subject to certain ownership limitations. The gross proceeds from the December 2023 Private Placement, before deducting offering expenses, were approximately $15.4 million. The December 2023 Private Placement closed on December 21, 2023. The warrant liabilities are subject to remeasurement at each balance sheet date, and any change in fair value is recognized as "changes in fair value of warrant liabilities" in the condensed consolidated statements of operations. The fair value of the warrant liabilities was estimated as of March 31, 2024, using a Black-Scholes model with significant inputs as follows: March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.25 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 8,022,153 ATM Agreement On May 23, 2023, the Company entered into an at-the-market offering agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC ("HCW") to sell shares of its Class A common stock having aggregate sales proceeds of up to $15.0 million (the "ATM Shares"), from time to time, through an "at the market" equity offering program under which HCW acts as sales agent and/or principal. Pursuant to the ATM Agreement, the ATM Shares may be offered and sold through HCW in transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on The Nasdaq Stock Market LLC or sales made to or through a market maker other than on an exchange or in negotiated transactions. Under the ATM Agreement, HCW is entitled to compensation equal to 3.0% of the gross proceeds from the sale of the ATM Shares sold through HCW. The Company has no obligation to sell any of the ATM Shares under the ATM Agreement and may at any time suspend solicitations and offers under the ATM Agreement. The Company and HCW may each terminate the ATM Agreement at any time upon specified prior written notice. The ATM Shares have been and are being issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-271671), filed with the SEC on May 5, 2023, as amended by Amendment No. 1 to the registration statement filed with the SEC on May 23, 2023 (as amended, the “ATM Registration Statement”). Pursuant to the ATM Agreement, no sales may be made until 30 days following the date on which the ATM Registration Statement is declared effective. The ATM Registration Statement was declared effective on May 25, 2023. During the three months ended March 31, 2024, the Company sold zero ATM Shares. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 16 – 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 assess performance. The Company's CEO is the chief operating decision maker. The Company functions in two operating segments, Energy Operations and Cryptocurrency Operations , about which separate financial information is presented below. Three Months Ended March 31, 2024 March 31, 2023 OPERATING REVENUES: Energy Operations $ 773,598 $ 3,642,921 Cryptocurrency Operations 26,748,587 13,623,294 Total operating revenues $ 27,522,185 $ 17,266,215 NET OPERATING LOSS: Energy Operations $ (8,203,180) $ (10,601,025) Cryptocurrency Operations 4,621,158 (4,015,088) Total net operating loss $ (3,582,022) $ (14,616,113) OTHER INCOME (EXPENSE) (1) 9,424,311 (32,044,449) NET INCOME (LOSS) $ 5,842,289 $ (46,660,562) DEPRECIATION AND AMORTIZATION: Energy Operations $ (1,325,667) $ (1,332,873) Cryptocurrency Operations (8,188,987) (6,389,968) Total depreciation and amortization $ (9,514,654) $ (7,722,841) INTEREST EXPENSE: Energy Operations $ (24,449) $ (159,287) Cryptocurrency Operations (2,238,960) (2,224,626) Total interest expense $ (2,263,409) $ (2,383,913) (1) The Company does not allocate other income (expense) for segment reporting purposes. Amount is shown as a reconciling item between net operating income (loss) and consolidated net income (loss). Refer to the accompanying condensed consolidated statements of operations for further details. For the three months ended March 31, 2024, and 2023, the loss on disposal of fixed assets, realized gain on sale of digital currencies, unrealized gain on digital currencies, realized gain on sale of miner assets, and impairments on digital currencies recorded in the condensed consolidated statements of operations were entirely attributable to the Cryptocurrency Operations segment. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 17 – EARNINGS (LOSS) PER SHARE Basic EPS is computed by dividing the Company’s net income (loss) by the weighted average number of Class A 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 following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net income (loss) per share of Class A common stock for the three months ended March 31, 2024, and 2023. Three Months Ended March 31, 2024 March 31, 2023 Numerator: Net income (loss) $ 5,842,289 $ (46,660,562) Less: net income (loss) attributable to noncontrolling interest 918,287 (18,119,131) Net income (loss) attributable to Stronghold Digital Mining, Inc. $ 4,924,002 $ (28,541,431) Denominator : Weighted average number of Class A common shares outstanding 13,989,820 4,375,614 Basic net income (loss) per share $ 0.35 $ (6.52) Diluted net income (loss) per share $ 0.35 $ (6.52) Securities that could potentially dilute earnings (loss) per share in the future were not included in the computation of diluted net income (loss) per share for the three months ended March 31, 2024, and 2023, because their inclusion would be anti-dilutive. As of March 31, 2024, the potentially dilutive impact of Series C Preferred Stock not yet exchanged for shares of Class A common stock was 1,497,500, and the potentially dilutive impact of Class V shares not yet exchanged for shares of Class A common stock was 2,405,760. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 18 – INCOME TAXES Tax Receivable Agreement The Company entered into a Tax Receivable Agreement (“TRA”) with Q Power and an agent named by Q Power on April 1, 2021 (to which an additional holder was subsequently joined as an additional "TRA Holder" on March 14, 2023), pursuant to which the Company will pay the TRA Holders 85% of the realized (or, in certain circumstances, deemed to be realized) cash tax savings attributable to the tax basis step-ups arising from taxable exchanges of units and certain other items. During 2022 and 2023, taxable exchanges of Stronghold LLC units, together with a corresponding number of Class V common shares by Q Power for Class A common stock of the Company, resulted in adjustments to the tax basis of Stronghold LLC’s assets. Such step-ups in tax basis, which were allocated to Stronghold Inc., are expected to increase Stronghold Inc.’s tax depreciation, amortization and/or other cost recovery deductions, which may reduce the amount of tax Stronghold Inc. would otherwise be required to pay in the future. No cash tax savings have been realized by Stronghold Inc. with respect to these basis adjustments due to the Company’s estimated taxable losses, and the realization of cash tax savings in the future is dependent, in part, on estimates of sufficient future taxable income. As such, a deferred income tax asset has not been recorded due to maintaining a valuation allowance on the Company’s deferred income tax assets, and no liability has been recorded with respect to the TRA in light of the applicable criteria for accrual. Estimating the amount and timing of Stronghold Inc.'s realization of income tax benefits subject to the TRA is imprecise and unknown at this time and will vary based on a number of factors, including when future redemptions actually occur. Accordingly, the Company has not recorded any deferred income tax asset or liability associated with the TRA. Provision for Income Taxes The provision for income taxes for the three months ended March 31, 2024, and 2023, was zero, resulting in an effective income tax rate of zero. The difference between the statutory income tax rate of 21% and the Company’s effective tax rate for the three months ended March 31, 2024, and 2023, was primarily due to pre-tax losses attributable to the noncontrolling interest and due to maintaining a valuation allowance against the Company’s deferred income tax assets. The determination to record a valuation allowance was based on management’s assessment of all available evidence, both positive and negative, supporting realizability of the Company’s net operating losses and other deferred income tax assets, as required by ASC 740, Income Taxes . In light of the criteria under ASC 740 for recognizing the tax benefit of deferred income tax assets, the Company maintained a valuation allowance against its federal and state deferred income tax assets as of March 31, 2024, and December 31, 2023. |
SUPPLEMENTAL CASH AND NON-CASH
SUPPLEMENTAL CASH AND NON-CASH INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH AND NON-CASH INFORMATION | NOTE 19 – SUPPLEMENTAL CASH AND NON-CASH INFORMATION Supplemental disclosures of cash flow information for the three months ended March 31, 2024, and 2023, were as follows: March 31, 2024 March 31, 2023 Income tax payments $ — $ — Interest payments $ 2,238,634 $ 2,222,350 Supplementary non-cash investing and financing activities consisted of the following for the three months ended March 31, 2024, and 2023: March 31, 2024 March 31, 2023 Purchases of property, plant and equipment included in accounts payable or accrued liabilities $ — $ 3,716 Reclassifications from deposits to property, plant and equipment 8,000,643 4,658,970 Convertible Note Exchange for Series C Convertible Preferred Stock: Extinguishment of convertible note — 16,812,500 Extinguishment of accrued interest — 655,500 Issuance of Series C convertible preferred stock, net of issuance costs — 45,386,944 B&M Settlement: Warrants – B&M — 1,739,882 Return of transformers to settle outstanding payable — 6,007,500 Issuance of B&M Note — 3,500,000 Elimination of accounts payable — 11,426,720 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | NOTE 20 – FAIR VALUE In addition to assets and liabilities that are measured at fair value on a recurring basis, such as digital currencies pursuant to ASU 2023-08 as described above in Note 1 – Basis of Presentation and Note 2 – Digital Currencies , the Company also measures certain assets and liabilities at fair value on a nonrecurring basis. The Company's non-financial assets, including operating lease right-of-use assets, and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized. The fair values of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, contract liabilities, and accrued expenses approximate their carrying values because of the short-term nature of these instruments. Adverse changes in business climate, including decreases in the price of Bitcoin and resulting decreases in the market price of miners, may indicate that an impairment triggering event has occurred. If the testing performed indicates the estimated fair value of the Company’s miners to be less than their net carrying value, an impairment charge will be recognized, decreasing the net carrying value of the Company’s miners to their estimated fair value. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 – SUBSEQUENT EVENTS On April 26, 2024, the Company executed a Distributed Energy Resource and Peak Saver Agreement with Voltus, Inc. (“Voltus”) pursuant to which Voltus will assist the Company in registering for certain demand response and sync reserve programs in PJM that the Company believes will allow it to capture additional revenue. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Certain information and footnote disclosures normally included in the annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), have been condensed or omitted. Certain reclassifications of amounts previously reported have been made to the accompanying condensed consolidated financial statements in order to conform to current presentation. Additionally, since there are no differences between net income (loss) and comprehensive income (loss), all references to comprehensive income (loss) have been excluded from the condensed consolidated financial statements. |
Recently Implemented Accounting Pronouncements/Recently Issued Accounting Pronouncements | Recently Implemented Accounting Pronouncements In September 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-13, Financial Instruments – Credit Losses , which adds a new impairment model, known as the current expected credit loss ("CECL") model, that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance for its estimate of expected credit losses at the initial recognition of an in-scope financial instrument and applies it to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses, and entities will need to measure expected credit losses on assets that have a low risk of loss. Since the Company is a smaller reporting company, as defined by the U.S. Securities and Exchange Commission (the "SEC"), the new guidance became effective on January 1, 2023. The Company adopted ASU 2016-13 effective January 1, 2023, but the adoption of ASU 2016-13 did not have an impact on the Company's consolidated financial statements. In December 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other - Crypto Assets (Subtopic 350-60) , which requires all entities holding crypto assets that meet certain requirements to subsequently measure those in-scope crypto assets at fair value, with the remeasurement recorded in net income. Among other things, the new guidance also requires separate presentation of (i) the gain or loss associated with remeasurement of crypto assets on the income statement and (ii) crypto assets from other intangible assets on the balance sheet. Before this new guidance, crypto assets were generally accounted for as indefinite-lived intangible assets, which follow a cost-less-impairment accounting model that only reflects decreases, but not increases, in the fair value of crypto assets holdings until sold. Although early adoption is permitted, the new guidance becomes effective on January 1, 2025, and should be applied using a modified retrospective transition method with a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the beginning of the year of adoption. The Company adopted ASU 2023-08 as of January 1, 2024, and the cumulative adjustment increased the opening balance of retained earnings by $99,292. See Note 2 – Digital Currencies for more information. Recently Issued Accounting Pronouncements During the first quarter of 2024, there have been no recently issued accounting pronouncements applicable to the Company. However, the Company continues to evaluate the impact of the following accounting pronouncements issued during the preceding quarter. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure , which requires public entities to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, public entities with a single reportable segment will be required to provide the new disclosures and all the disclosures required under ASC 280, Segment Reporting . Although early adoption is permitted, this new guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis. The Company is currently evaluating the impact of adopting this new guidance on its interim and annual consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. Although early adoption is permitted, this new guidance becomes effective for annual periods beginning after December 15, 2024, on a prospective basis. The Company is currently evaluating the impact of adopting this new guidance on its interim and annual consolidated financial statements and related disclosures. |
DIGITAL CURRENCIES (Tables)
DIGITAL CURRENCIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Digital Currencies | As of March 31, 2024, the Company held an aggregate amount of $2,704 in digital currencies comprised of unrestricted Bitcoin. Changes in digital currencies consisted of the following for the three months ended March 31, 2024, and 2023: Three Months Ended March 31, 2024 March 31, 2023 Digital currencies at beginning of period $ 3,175,595 $ 109,827 Additions of digital currencies (1) 25,114,221 12,921,075 Realized gain on sale of digital currencies 624,107 326,768 Unrealized gain (loss) on digital currencies 1,227 — Impairment losses — (71,477) Proceeds from sale of digital currencies (29,011,738) (12,613,341) Impact of ASU 2023-08 as of January 1, 2024 99,292 — Digital currencies at end of period $ 2,704 $ 672,852 (1) Additions of digital currencies were related to mining activities. 2 See Note 1 – Basis of Presentation for more details regarding the Company's adoption of ASU 2023-08 as of January 1, 2024. |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following components as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 Waste coal $ 3,984,245 $ 4,066,201 Fuel oil 57,847 72,969 Limestone 43,831 57,642 Inventory $ 4,085,923 $ 4,196,812 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following as of March 31, 2024, and December 31, 2023: Useful Lives (Years) March 31, 2024 December 31, 2023 Electric plant 10 - 60 $ 67,083,864 $ 67,063,626 Strongboxes and power transformers 8 - 30 54,588,284 54,588,284 Karbolith 30 493,626 — Machinery and equipment 5 - 20 16,222,214 16,222,214 Rolling stock 5 - 7 261,000 261,000 Cryptocurrency machines and powering supplies 2 - 3 97,426,973 88,445,931 Computer hardware and software 2 - 5 100,536 100,536 Vehicles and trailers 2 - 7 658,500 658,500 Leasehold improvements 2 - 3 2,992,845 2,992,845 Construction in progress Not Depreciable 11,155,827 11,562,170 Asset retirement cost 10 - 30 580,452 580,452 251,564,121 242,475,558 Accumulated depreciation and amortization (107,294,441) (97,832,787) Property, plant and equipment, net $ 144,269,680 $ 144,642,771 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 Accrued legal and professional fees $ 734,445 $ 733,115 Accrued interest 2,992 22,101 Accrued sales and use tax 6,088,271 5,660,028 Accrued plant utilities and fuel 1,565,020 3,505,203 Other 1,209,222 867,448 Accrued liabilities $ 9,599,950 $ 10,787,895 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Total debt consisted of the following as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 $499,520 loan, with interest at 2.74%, due February 2024. $ — $ 26,522 $517,465 loan, with interest at 4.79%, due November 2024. 121,576 158,027 $119,000 loan, with interest at 7.40%, due December 2026. 110,058 119,000 $585,476 loan, with interest at 4.99%, due November 2025. 302,428 345,665 $431,825 loan, with interest at 7.60%, due April 2024. 7,956 31,525 $58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. 50,932,368 51,060,896 $92,381 loan, with interest at 1.49%, due April 2026. 50,722 56,470 $64,136 loan, with interest at 11.85%, due May 2024. 7,000 13,795 $196,909 loan, with interest at 6.49%, due October 2025. 121,818 134,845 $60,679 loan, with interest at 7.60%, due March 2025. 44,516 48,672 $3,500,000 Promissory Note, with interest at 7.50%, due October 2025. 3,000,000 3,000,000 $1,184,935 Promissory Note, due June 2024. 236,987 592,468 $552,024 Promissory Note, due July 2024. 276,012 552,024 Total outstanding borrowings $ 55,211,441 $ 56,139,909 Current portion of long-term debt, net of discounts and issuance fees 12,058,049 7,936,147 Long-term debt, net of discounts and issuance fees $ 43,153,392 $ 48,203,762 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Amounts due to related parties as of March 31, 2024, and December 31, 2023, were as follows: March 31, 2024 December 31, 2023 Coal Valley Sales, LLC $ 503,670 $ 433,195 Panther Creek Operating LLC — 14,511 Northampton Generating Fuel Supply Company, Inc. — 226,951 Olympus Power LLC and other subsidiaries 32,944 44,181 William Spence 83,333 — Due to related parties $ 619,947 $ 718,838 |
REDEEMABLE COMMON STOCK (Tables
REDEEMABLE COMMON STOCK (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Redeemable Common Stock | The Company recorded redeemable common stock as presented in the table below. Common - Class V Shares Amount Balance - December 31, 2023 2,405,760 $ 20,416,116 Net income attributable to noncontrolling interest — 918,287 Maximum redemption right valuation — (11,629,477) Balance - March 31, 2024 2,405,760 $ 9,704,926 |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Schedule of Noncontrolling Ownership Interest | The following summarizes the redeemable common stock adjustments pertaining to the noncontrolling interest as of and for the three months ended March 31, 2024: Class V Common Stock Outstanding Fair Value Price Redeemable Common Stock Adjustments Balance - December 31, 2023 2,405,760 $ 8.49 $ 20,416,116 Net income attributable to noncontrolling interest — 918,287 Adjustment of redeemable common stock to redemption amount (1) — (11,629,477) Balance - March 31, 2024 2,405,760 $ 4.03 $ 9,704,926 (1) Redeemable common stock adjustment based on Class V common stock outstanding at fair value price at each quarter end, using a 10-day variable weighted average price ("VWAP") of trading dates including the closing date. |
WARRANTS (Tables)
WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Outstanding Warrants | The following table summarizes outstanding warrants as of March 31, 2024. Number of Warrants Outstanding as of December 31, 2023 5,277,985 Issued — Exercised — Outstanding as of March 31, 2024 5,277,985 |
EQUITY ISSUANCES (Tables)
EQUITY ISSUANCES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Black Scholes Input Assumptions | The fair value of the warrant liabilities was estimated as of March 31, 2024, using a Black-Scholes model with significant inputs as follows: March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.75 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 1,970,318 March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.75 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 3,540,238 March 31, 2024 Expected volatility 129.6 % Expected life (in years) 5.25 Risk-free interest rate 4.2 % Expected dividend yield 0.00 % Fair value $ 8,022,153 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The Company functions in two operating segments, Energy Operations and Cryptocurrency Operations , about which separate financial information is presented below. Three Months Ended March 31, 2024 March 31, 2023 OPERATING REVENUES: Energy Operations $ 773,598 $ 3,642,921 Cryptocurrency Operations 26,748,587 13,623,294 Total operating revenues $ 27,522,185 $ 17,266,215 NET OPERATING LOSS: Energy Operations $ (8,203,180) $ (10,601,025) Cryptocurrency Operations 4,621,158 (4,015,088) Total net operating loss $ (3,582,022) $ (14,616,113) OTHER INCOME (EXPENSE) (1) 9,424,311 (32,044,449) NET INCOME (LOSS) $ 5,842,289 $ (46,660,562) DEPRECIATION AND AMORTIZATION: Energy Operations $ (1,325,667) $ (1,332,873) Cryptocurrency Operations (8,188,987) (6,389,968) Total depreciation and amortization $ (9,514,654) $ (7,722,841) INTEREST EXPENSE: Energy Operations $ (24,449) $ (159,287) Cryptocurrency Operations (2,238,960) (2,224,626) Total interest expense $ (2,263,409) $ (2,383,913) (1) The Company does not allocate other income (expense) for segment reporting purposes. Amount is shown as a reconciling item between net operating income (loss) and consolidated net income (loss). Refer to the accompanying condensed consolidated statements of operations for further details. |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net income (loss) per share of Class A common stock for the three months ended March 31, 2024, and 2023. Three Months Ended March 31, 2024 March 31, 2023 Numerator: Net income (loss) $ 5,842,289 $ (46,660,562) Less: net income (loss) attributable to noncontrolling interest 918,287 (18,119,131) Net income (loss) attributable to Stronghold Digital Mining, Inc. $ 4,924,002 $ (28,541,431) Denominator : Weighted average number of Class A common shares outstanding 13,989,820 4,375,614 Basic net income (loss) per share $ 0.35 $ (6.52) Diluted net income (loss) per share $ 0.35 $ (6.52) |
SUPPLEMENTAL CASH AND NON-CAS_2
SUPPLEMENTAL CASH AND NON-CASH INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental disclosures of cash flow information for the three months ended March 31, 2024, and 2023, were as follows: March 31, 2024 March 31, 2023 Income tax payments $ — $ — Interest payments $ 2,238,634 $ 2,222,350 Supplementary non-cash investing and financing activities consisted of the following for the three months ended March 31, 2024, and 2023: March 31, 2024 March 31, 2023 Purchases of property, plant and equipment included in accounts payable or accrued liabilities $ — $ 3,716 Reclassifications from deposits to property, plant and equipment 8,000,643 4,658,970 Convertible Note Exchange for Series C Convertible Preferred Stock: Extinguishment of convertible note — 16,812,500 Extinguishment of accrued interest — 655,500 Issuance of Series C convertible preferred stock, net of issuance costs — 45,386,944 B&M Settlement: Warrants – B&M — 1,739,882 Return of transformers to settle outstanding payable — 6,007,500 Issuance of B&M Note — 3,500,000 Elimination of accounts payable — 11,426,720 |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) | 3 Months Ended | |
Jul. 27, 2022 | Mar. 31, 2024 a power_generation_facility segment MW | |
Disaggregation of Revenue [Line Items] | ||
Number of coal refuse power generation facilities owned and operating | power_generation_facility | 2 | |
Number of operating segments | segment | 2 | |
Customized Energy Solutions, Ltd | ||
Disaggregation of Revenue [Line Items] | ||
Contract with supplier, term | 2 years | |
Contract with supplier, termination notice before automatic renewal, period | 60 days | |
Reclamation Facility, Venango County, Pennsylvania | ||
Disaggregation of Revenue [Line Items] | ||
Area of land (in acres) | a | 650 | |
Scrubgrass Plant | ||
Disaggregation of Revenue [Line Items] | ||
Generation capacity, electricity (in megawatts) | 83.5 | |
Panther Creek Plant | ||
Disaggregation of Revenue [Line Items] | ||
Generation capacity, electricity (in megawatts) | 80 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | May 15, 2023 | Mar. 31, 2024 USD ($) $ / shares | Dec. 31, 2023 USD ($) $ / shares | Dec. 21, 2023 $ / shares | Apr. 20, 2023 $ / shares | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 19, 2022 $ / shares |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Reverse stock split ratio | 0.1 | |||||||
Common stock - Class A, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common stock - Class V, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Stockholders' equity | $ 61,971,197 | $ 43,397,504 | $ 82,196,375 | $ 83,025,144 | ||||
Retained Earnings | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stockholders' equity | $ (314,994,985) | (331,647,755) | $ (290,848,496) | $ (240,443,302) | ||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stockholders' equity | 99,292 | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stockholders' equity | $ 99,292 |
DIGITAL CURRENCIES - Narrative
DIGITAL CURRENCIES - Narrative (Details) | 3 Months Ended | |||
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) bitcoin | Dec. 31, 2022 USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Stockholders' equity | $ 61,971,197 | $ 82,196,375 | $ 43,397,504 | $ 83,025,144 |
Realized gain on sale of digital currencies | 624,107 | 326,768 | ||
Unrealized gain on digital currencies | 1,227 | 0 | ||
Bitcoin | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Crypto-asset, number of units | bitcoin | 76.7 | |||
Crypto-asset, carrying value | $ 3,175,595 | |||
Crypto-asset, fair value | 3,274,887 | |||
Retained Earnings | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Stockholders' equity | (314,994,985) | (290,848,496) | (331,647,755) | (240,443,302) |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Stockholders' equity | 99,292 | |||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Stockholders' equity | 99,292 | |||
Digital currencies | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Digital currencies | 2,704 | 672,852 | $ 3,175,595 | $ 109,827 |
Realized gain on sale of digital currencies | 624,107 | 326,768 | ||
Unrealized gain on digital currencies | 1,227 | 0 | ||
Digital currencies | Cumulative Effect, Period of Adoption, Adjustment | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Digital currencies | $ 99,292 | $ 0 |
DIGITAL CURRENCIES - Changes in
DIGITAL CURRENCIES - Changes in Digital Currencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Crypto Asset [Roll Forward] | ||
Realized gain on sale of digital currencies | $ 624,107 | $ 326,768 |
Unrealized gain on digital currencies | 1,227 | 0 |
Impairment losses | 0 | (71,477) |
Digital currencies | ||
Crypto Asset [Roll Forward] | ||
Digital currencies at beginning of period | 3,175,595 | 109,827 |
Additions of digital currencies | 25,114,221 | 12,921,075 |
Realized gain on sale of digital currencies | 624,107 | 326,768 |
Unrealized gain on digital currencies | 1,227 | 0 |
Impairment losses | 0 | (71,477) |
Proceeds from sale of digital currencies | (29,011,738) | (12,613,341) |
Digital currencies at end of period | 2,704 | 672,852 |
Digital currencies | Cumulative Effect, Period of Adoption, Adjustment | ||
Crypto Asset [Roll Forward] | ||
Digital currencies at end of period | $ 99,292 | $ 0 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Waste coal | $ 3,984,245 | $ 4,066,201 |
Fuel oil | 57,847 | 72,969 |
Limestone | 43,831 | 57,642 |
Inventory | $ 4,085,923 | $ 4,196,812 |
EQUIPMENT DEPOSITS (Details)
EQUIPMENT DEPOSITS (Details) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) miner |
Property, Plant and Equipment [Line Items] | ||
Equipment deposits | $ | $ 0 | $ 8,000,643 |
Number of miners for deposit | 5,000 | |
Miner Equipment, MicroBT Whatsminer M50 | ||
Property, Plant and Equipment [Line Items] | ||
Number of miners for deposit | 1,100 | |
Miner Equipment, Bitmain Antminer S19k Pro | ||
Property, Plant and Equipment [Line Items] | ||
Number of miners for deposit | 2,800 | |
Miner Equipment, Canaan Avalon A1346 | ||
Property, Plant and Equipment [Line Items] | ||
Number of miners for deposit | 1,100 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Schedule of Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant And Equipment, Excluding Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 251,564,121 | $ 242,475,558 |
Accumulated depreciation and amortization | (107,294,441) | (97,832,787) |
Property, plant and equipment, net | 144,269,680 | 144,642,771 |
Electric plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 67,083,864 | 67,063,626 |
Electric plant | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 10 years | |
Electric plant | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 60 years | |
Strongboxes and power transformers | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 54,588,284 | 54,588,284 |
Strongboxes and power transformers | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 8 years | |
Strongboxes and power transformers | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 30 years | |
Karbolith | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 30 years | |
Property, plant and equipment, gross | $ 493,626 | 0 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 16,222,214 | 16,222,214 |
Machinery and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Machinery and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 20 years | |
Rolling stock | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 261,000 | 261,000 |
Rolling stock | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Rolling stock | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Cryptocurrency machines and powering supplies | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 97,426,973 | 88,445,931 |
Cryptocurrency machines and powering supplies | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Cryptocurrency machines and powering supplies | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 100,536 | 100,536 |
Computer hardware and software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Computer hardware and software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Vehicles and trailers | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 658,500 | 658,500 |
Vehicles and trailers | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Vehicles and trailers | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,992,845 | 2,992,845 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 11,155,827 | 11,562,170 |
Asset retirement cost | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 580,452 | $ 580,452 |
Asset retirement cost | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 10 years | |
Asset retirement cost | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 30 years |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 9,514,654 | $ 7,722,841 | |
Depreciation of assets under finance leases | 103,736 | $ 133,382 | |
Gross value of assets under finance leases | 2,797,265 | $ 2,797,265 | |
Assets under finance leases, accumulated amortization | 1,524,472 | 1,420,736 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 11,155,827 | $ 11,562,170 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Other Accrued Liabilities: | ||
Accrued legal and professional fees | $ 734,445 | $ 733,115 |
Accrued interest | 2,992 | 22,101 |
Accrued sales and use tax | 6,088,271 | 5,660,028 |
Accrued plant utilities and fuel | 1,565,020 | 3,505,203 |
Other | 1,209,222 | 867,448 |
Accrued liabilities | $ 9,599,950 | $ 10,787,895 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 28, 2023 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 55,211,441 | $ 56,139,909 | |
Current portion of long-term debt, net of discounts and issuance fees | 12,058,049 | 7,936,147 | |
Long-term debt, net of discounts and issuance fees | 43,153,392 | 48,203,762 | |
Loans payable | $499,520 loan, with interest at 2.74%, due February 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 499,520 | ||
Interest rate | 2.74% | ||
Long-term debt, gross | $ 0 | 26,522 | |
Loans payable | $517,465 loan, with interest at 4.79%, due November 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 517,465 | ||
Interest rate | 4.79% | ||
Long-term debt, gross | $ 121,576 | 158,027 | |
Loans payable | $119,000 loan, with interest at 7.40%, due December 2026. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 119,000 | ||
Interest rate | 7.40% | ||
Long-term debt, gross | $ 110,058 | 119,000 | |
Loans payable | $585,476 loan, with interest at 4.99%, due November 2025. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 585,476 | ||
Interest rate | 4.99% | ||
Long-term debt, gross | $ 302,428 | 345,665 | |
Loans payable | $431,825 loan, with interest at 7.60%, due April 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 431,825 | ||
Interest rate | 7.60% | ||
Long-term debt, gross | $ 7,956 | 31,525 | |
Loans payable | $58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 58,149,411 | ||
Interest rate | 10% | ||
Long-term debt, gross | $ 50,932,368 | 51,060,896 | |
Loans payable | $92,381 loan, with interest at 1.49%, due April 2026. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 92,381 | ||
Interest rate | 1.49% | ||
Long-term debt, gross | $ 50,722 | 56,470 | |
Loans payable | $64,136 loan, with interest at 11.85%, due May 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 64,136 | ||
Interest rate | 11.85% | ||
Long-term debt, gross | $ 7,000 | 13,795 | |
Loans payable | $196,909 loan, with interest at 6.49%, due October 2025. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 196,909 | ||
Interest rate | 6.49% | ||
Long-term debt, gross | $ 121,818 | 134,845 | |
Loans payable | $60,679 loan, with interest at 7.60%, due March 2025. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 60,679 | ||
Interest rate | 7.60% | ||
Long-term debt, gross | $ 44,516 | 48,672 | |
Loans payable | $3,500,000 Promissory Note, with interest at 7.50%, due October 2025. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 3,500,000 | $ 3,500,000 | |
Interest rate | 7.50% | ||
Long-term debt, gross | $ 3,000,000 | 3,000,000 | |
Loans payable | $1,184,935 Promissory Note, due June 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | 1,184,935 | ||
Long-term debt, gross | 236,987 | 592,468 | |
Loans payable | $552,024 Promissory Note, due July 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | 552,024 | ||
Long-term debt, gross | $ 276,012 | $ 552,024 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 3 Months Ended | 8 Months Ended | 11 Months Ended | |||||||||||
Dec. 26, 2023 USD ($) $ / bitcoin installment | Jul. 19, 2023 USD ($) $ / bitcoin installment | Apr. 30, 2023 USD ($) installment | Feb. 20, 2023 USD ($) | Feb. 06, 2023 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2024 USD ($) | Feb. 15, 2024 USD ($) | Mar. 28, 2023 USD ($) transformer shares | Dec. 30, 2022 $ / shares | Oct. 27, 2022 USD ($) | |
Extinguishment of Debt [Line Items] | ||||||||||||||
Loss on debt extinguishment | $ 0 | $ 28,960,947 | ||||||||||||
Repayments of debt | 1,060,008 | 1,836,925 | ||||||||||||
Bruce - Merrilees Electric Co. | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Payable eliminated | $ 11,400,000 | |||||||||||||
Number of transformers released | transformer | 10 | |||||||||||||
Number of transformers cancelled | transformer | 90 | |||||||||||||
Series C Convertible Preferred Stock | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | |||||||||||||
Loans payable | Canaan Inc | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Number of installments | installment | 6 | 10 | ||||||||||||
Upfront payment | $ 828,036 | $ 1,777,402 | ||||||||||||
Promissory note | $ 552,024 | $ 1,184,935 | ||||||||||||
Repayments of debt | $ 276,012 | $ 947,948 | ||||||||||||
Loans payable | Canaan Inc | Miner Equipment, A1346 Bitcoin Miners | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Number of miners purchased | $ / bitcoin | 1,100 | 2,000 | ||||||||||||
Purchases | $ 1,380,060 | $ 2,962,337 | ||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Debt face amount | 58,149,411 | $ 58,149,411 | $ 58,149,411 | $ 58,149,411 | ||||||||||
Period of pause on triggered monthly debt repayments | 5 months | |||||||||||||
Monthly prepayments, average daily cash percentage in excess of triggering amount | 50% | |||||||||||||
Monthly prepayments, triggering daily cash balance amount (in excess) | $ 7,500,000 | |||||||||||||
Loan prepayment | $ 180,000 | |||||||||||||
Maximum leverage ratio | 4 | |||||||||||||
Interest rate | 10% | 10% | 10% | 10% | ||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | Secured Overnight Financing Rate (SOFR) | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Basis spread on variable rate | 10% | |||||||||||||
Reference rate | 3% | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | Fed Funds Effective Rate Overnight Index Swap Rate | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Basis spread on variable rate | 0.50% | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | Term Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Debt Instrument, Basis Spread On Variable Rate, One | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Basis spread on variable rate | 1% | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | Term Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Debt Instrument, Basis Spread On Variable Rate, Two | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Basis spread on variable rate | 9% | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | Until March 31, 2024 | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Minimum liquidity requirement | $ 2,500,000 | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | During The Period April 1, 2024 Through December 31, 2024 | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Minimum liquidity requirement | 5,000,000 | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | From and After January 1, 2025 | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Minimum liquidity requirement | $ 7,500,000 | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | Until June 30, 2025 | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Minimum liquidity requirement | $ 2,500,000 | |||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | From and After July 1, 2025 | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Minimum liquidity requirement | $ 5,000,000 | |||||||||||||
Amended And Restated 10% Notes | Loans payable | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Interest rate | 10% | |||||||||||||
Debt extinguished, paid-in-kind | $ 16,900,000 | |||||||||||||
Loss on debt extinguishment | $ 28,960,947 | |||||||||||||
$3,500,000 Promissory Note, with interest at 7.50%, due October 2025. | Loans payable | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Debt face amount | $ 3,500,000 | $ 3,500,000 | $ 3,500,000 | $ 3,500,000 | $ 3,500,000 | |||||||||
Interest rate | 7.50% | 7.50% | 7.50% | 7.50% | ||||||||||
Warrants issued during period (in shares) | shares | 300,000 | |||||||||||||
Repayment of debt | $ 500,000 | |||||||||||||
B&M Note Due October 2025, Tranche One | Loans payable | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Debt face amount | $ 500,000 | |||||||||||||
Number of installments | installment | 4 | |||||||||||||
Principal installment | $ 125,000 | |||||||||||||
Secured Debt | $58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Debt face amount | $ 35,100,000 | |||||||||||||
Line of Credit | $58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | ||||||||||||||
Extinguishment of Debt [Line Items] | ||||||||||||||
Debt face amount | $ 23,000,000 | |||||||||||||
Interest rate during period | 15.50% | 14.46% |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) | 1 Months Ended | 3 Months Ended | 24 Months Ended | |||||||||||||||
Feb. 13, 2024 USD ($) | Apr. 20, 2023 USD ($) $ / shares shares | Apr. 19, 2023 USD ($) | Oct. 01, 2022 USD ($) | Sep. 19, 2022 $ / shares shares | Sep. 13, 2022 $ / shares shares | Jul. 09, 2022 USD ($) | Feb. 01, 2022 USD ($) | Nov. 02, 2021 USD ($) | Aug. 02, 2021 USD ($) | Jul. 09, 2021 USD ($) | Apr. 30, 2023 $ / shares shares | Mar. 31, 2024 USD ($) $ / T owner T | Mar. 31, 2023 USD ($) | Oct. 31, 2023 USD ($) | Jan. 31, 2024 $ / shares | Jan. 29, 2024 $ / shares | Dec. 31, 2023 $ / shares | |
Related Party Transaction [Line Items] | ||||||||||||||||||
Fuel | $ 7,410,828 | $ 7,414,014 | ||||||||||||||||
Operations and maintenance | $ 8,241,725 | 8,440,923 | ||||||||||||||||
September 2022 Warrants | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Warrants issued during period (in shares) | shares | 560,241 | |||||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 10.10 | $ 17.50 | $ 10.10 | $ 7.51 | $ 7.51 | $ 7 | ||||||||||||
April 2023 Pre-Funded Warrants | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 0.001 | |||||||||||||||||
Private placement With Greg Beard, Co-Chairman And Chief Executive Officer | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Stock issued and sold during period (in shares) | shares | 60,241 | |||||||||||||||||
Q Power LLC | Coal Reclamation Partnership | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Ownership percentage by noncontrolling owners | 16.26% | |||||||||||||||||
Chief Executive Officer | September 2022 Warrants | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Warrants issued during period (in shares) | shares | 60,241 | |||||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 17.50 | $ 10.10 | ||||||||||||||||
Chief Executive Officer | Private placement With Greg Beard, Co-Chairman And Chief Executive Officer | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Stock issued and sold during period (in shares) | shares | 100,000 | 60,241 | ||||||||||||||||
Sale of stock, gross proceeds | $ 1,000,000 | |||||||||||||||||
Chief Executive Officer | Private placement With Greg Beard, Co-Chairman And Chief Executive Officer | April 2023 Pre-Funded Warrants | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Warrants issued during period (in shares) | shares | 100,000 | |||||||||||||||||
Independent Consulting Agreement, Management Fee Before Adjustment | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 600,000 | |||||||||||||||||
Independent Consulting Agreement, Management Fee After Adjustment | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 200,000 | |||||||||||||||||
Related party transaction, percentage | 0.10 | |||||||||||||||||
Independent Consulting Agreement | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Options granted (in shares) | shares | 250,000 | |||||||||||||||||
Coal Valley Sales, LLC | Waste Coal Agreement (the “WCA”) | Related Party | ||||||||||||||||||
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 | |||||||||||||||||
Fuel | $ 379,442 | 150,000 | ||||||||||||||||
Coal Valley Properties, LLC | Coal Valley Properties, LLC | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Number of owners | owner | 1 | |||||||||||||||||
Northampton Fuel Supply Company, Inc. (“NFS”) | Fuel Service and Beneficial Use Agreement ("FBUA") | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Fuel | $ 621,509 | 1,157,927 | ||||||||||||||||
Panther Creek Fuel Services LLC | Fuel Management Agreement | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Operations and maintenance | 0 | 478,621 | ||||||||||||||||
Scrubgrass Fuel Services LLC | Fuel Management Agreement | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Operations and maintenance | 0 | 276,119 | ||||||||||||||||
Olympus Stronghold Services, LLC | Management Fee | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 1,000,000 | |||||||||||||||||
Olympus Stronghold Services, LLC | Mobilization Fee | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 150,000 | |||||||||||||||||
Olympus Stronghold Services, LLC | Management Fee, Panther Creek Plant | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 500,000 | 1,000,000 | ||||||||||||||||
Olympus Stronghold Services, LLC | Termination of Omnibus Services Agreement | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party, ongoing monthly assistance | $ 10,000 | |||||||||||||||||
William Spence | Management Services Agreement | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | 30,000 | 235,376 | ||||||||||||||||
Panther Creek Energy Services LLC | Management Fee | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 175,000 | |||||||||||||||||
Panther Creek Energy Services LLC | Operations and Maintenance Agreement | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 325,000 | $ 250,000 | 0 | 910,394 | ||||||||||||||
Related party transaction, period | 12 months | |||||||||||||||||
Scrubgrass Energy Services LLC | Management Fee | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Related party transaction amount | $ 325,000 | $ 175,000 | $ 250,000 | |||||||||||||||
Related party transaction, period | 12 months | |||||||||||||||||
Scrubgrass Energy Services LLC | Operations and Maintenance Agreement | Related Party | ||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||
Operations and maintenance | $ 0 | $ 1,724,112 |
RELATED PARTY TRANSACTIONS - Am
RELATED PARTY TRANSACTIONS - Amounts Due to Related Parties (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 619,947 | $ 718,838 |
Coal Valley Sales, LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 503,670 | 433,195 |
Panther Creek Operating LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 14,511 |
Northampton Generating Fuel Supply Company, Inc. | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 226,951 |
Olympus Power LLC and other subsidiaries | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 32,944 | 44,181 |
William Spence | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 83,333 | $ 0 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Purchased coal | Supplier concentration risk | Two suppliers | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 55% | 60% |
Two customers | Revenue | Customer concentration risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 19% | 13% |
Energy Operations | Customized Energy Solutions, Ltd | Revenue | Customer concentration risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 90% | 99% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) terahash in Millions | 1 Months Ended | 3 Months Ended | |||||||||||||||
Nov. 09, 2023 USD ($) | Oct. 26, 2022 USD ($) | Jul. 18, 2022 | May 09, 2022 USD ($) | Jun. 02, 2021 USD ($) | Apr. 02, 2021 USD ($) miner terahash | Mar. 31, 2020 USD ($) | Jan. 31, 2020 USD ($) | Nov. 30, 2019 USD ($) | Feb. 29, 2024 credit | Nov. 30, 2019 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) miner | Nov. 09, 2026 ton | Nov. 09, 2025 ton | Nov. 09, 2024 ton | Mar. 31, 2024 USD ($) miner | |
McClymonds Supply & Transit Company, Inc. and DTA, L.P. vs. Scrubgrass Generating Company, L.P. | Scrubgrass Generating Company, L.P. | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Damages awarded | $ 5,000,000 | ||||||||||||||||
Litigation settlement interest | $ 800,000 | ||||||||||||||||
McClymonds Supply & Transit Company, Inc. and DTA, L.P. vs. Scrubgrass Generating Company, L.P. | Pending Litigation | McClymonds Supply and Transit Company, Inc. | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Damages sought | $ 5,042,350 | ||||||||||||||||
McClymonds Supply & Transit Company, Inc. and DTA, L.P. vs. Scrubgrass Generating Company, L.P. | Pending Litigation | Scrubgrass Generating Company, L.P. | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Damages sought | $ 6,747,328 | ||||||||||||||||
Allegheny Mineral Corporation v. Scrubgrass Generating Company, L.P., Butler County Court of Common Pleas, No. AD 19-11039 | Pending Litigation | Scrubgrass Generating Company, L.P. | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Damages sought | $ 1,300,000 | ||||||||||||||||
Allegheny Mineral Corporation v. Scrubgrass Generating Company, L.P., Butler County Court of Common Pleas, No. AD 19-11039 | Pending Litigation | Allegheny Mineral Corporation | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Damages sought | $ 1,200,000 | ||||||||||||||||
Allegheny Mineral Corporation v. Scrubgrass Generating Company, L.P., Butler County Court of Common Pleas, No. AD 19-11039 | Settled Litigation | Scrubgrass Generating Company, L.P. | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Damages awarded | $ 300,000 | ||||||||||||||||
Department of Environmental Protection | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Penalty amount | $ 28,800 | ||||||||||||||||
Period for payment of penalty | 90 days | ||||||||||||||||
Alternative energy credits retired for non-compliance | credit | 25,968 | ||||||||||||||||
Department of Environmental Protection | Forecast | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Aggregate tons of excess waste coal ash to be removed | ton | 220,000 | 160,000 | 80,000 | ||||||||||||||
MinerVa, MinerVA | |||||||||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||||||||
Count (in miners) | miner | 15,000 | 15,000 | 15,000 | ||||||||||||||
Total terahash delivered by miner (in terahash) | terahash | 1.5 | ||||||||||||||||
Price per miner (in USD per miner) | $ 4,892.5 | ||||||||||||||||
Remaining commitment balance | $ 73,387,500 | ||||||||||||||||
Percentage of purchase price | 20% | 60% | |||||||||||||||
Purchases | $ 14,677,500 | $ 44,032,500 | |||||||||||||||
Unpaid amount | $ 0 | ||||||||||||||||
Number of miners delivered | miner | 3,200 | ||||||||||||||||
Impairment | $ 5,120,000 | $ 12,228,742 | |||||||||||||||
Resolution period | 60 days | ||||||||||||||||
Equivalent value of collateral exchanged | miner | 12,700 |
REDEEMABLE COMMON STOCK - Narra
REDEEMABLE COMMON STOCK - Narrative (Details) - Stronghold LLC - vote | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Temporary Equity [Line Items] | ||
Number of votes | 1 | |
Q Power LLC | ||
Temporary Equity [Line Items] | ||
Ownership interest | 15.70% | 17.80% |
REDEEMABLE COMMON STOCK - Sched
REDEEMABLE COMMON STOCK - Schedule of Mezzanine Equity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance (in shares) | 2,405,760 | |
Net income attributable to noncontrolling interest | $ 918,287 | $ (18,119,131) |
Ending balance (in shares) | 2,405,760 | |
Retained Earnings | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Net income attributable to noncontrolling interest | $ 918,287 | $ (18,119,131) |
Common Stock - Class V | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance (in shares) | 2,405,760 | |
Beginning balance | $ 20,416,116 | |
Net income attributable to noncontrolling interest | 918,287 | |
Maximum redemption right valuation | $ (11,629,477) | |
Ending balance (in shares) | 2,405,760 | |
Ending balance | $ 9,704,926 |
NONCONTROLLING INTERESTS - Narr
NONCONTROLLING INTERESTS - Narrative (Details) - Stronghold LLC - vote | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Noncontrolling Interest [Line Items] | ||
Number of votes | 1 | |
Q Power LLC | ||
Noncontrolling Interest [Line Items] | ||
Ownership interest | 15.70% | 17.80% |
NONCONTROLLING INTERESTS - Rede
NONCONTROLLING INTERESTS - Redeemable Common Stock Adjustments (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Noncontrolling Interest [Line Items] | |||
Common stock - Class V, outstanding (in shares) | 2,405,760 | 2,405,760 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Redeemable common stock, beginning balance | $ 20,416,116 | ||
Net income attributable to noncontrolling interest | 918,287 | $ (18,119,131) | |
Redeemable common stock, ending balance | $ 9,704,926 | ||
Common Stock - Class V | |||
Noncontrolling Interest [Line Items] | |||
Common stock - Class V, outstanding (in shares) | 2,405,760 | 2,405,760 | |
Fair valuation price (in USD per share) | $ 4.03 | $ 8.49 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Redeemable common stock, beginning balance | $ 20,416,116 | ||
Net income attributable to noncontrolling interest | 918,287 | ||
Adjustment of temporary equity to redemption amount | (11,629,477) | ||
Redeemable common stock, ending balance | $ 9,704,926 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | |||
Jan. 22, 2024 | Mar. 15, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 1,939,120 | $ 2,449,324 | ||
Stock compensation expense, tax benefit | $ 0 | $ 0 | ||
Options cancelled (in shares) | 98,669 | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 135,000 | 272,500 | ||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards cancelled (in shares) | 25,000 |
WARRANTS - Outstanding Warrants
WARRANTS - Outstanding Warrants (Details) | 3 Months Ended |
Mar. 31, 2024 shares | |
Class Of Warrant Or Right, Outstanding [Roll Forward] | |
Outstanding as of beginning of period (in shares) | 5,277,985 |
Issued (in shares) | 0 |
Exercised (in shares) | 0 |
Outstanding as of end of period (in shares) | 5,277,985 |
WARRANTS - Narrative (Details)
WARRANTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 21, 2023 | Apr. 20, 2023 | Sep. 19, 2022 | Mar. 31, 2024 | Jan. 31, 2024 | Jan. 29, 2024 | Dec. 31, 2023 | Apr. 30, 2023 |
Debt Instrument [Line Items] | ||||||||
Warrants outstanding (in shares) | 5,277,985 | 5,277,985 | ||||||
Common stock - Class A, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
September 2022 Warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants issued during period (in shares) | 560,241 | |||||||
Warrant exercise price of warrants (in USD per share) | 10.10 | $ 17.50 | $ 7.51 | $ 7.51 | $ 7 | $ 10.10 | ||
Warrants outstanding (in shares) | 560,241 | |||||||
September 2022 Pre-Funded Warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants issued during period (in shares) | 272,565 | |||||||
Warrant exercise price of warrants (in USD per share) | $ 0.001 | |||||||
Warrant purchase price (in USD per share) | $ 16 | |||||||
April 2023 Warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrant exercise price of warrants (in USD per share) | $ 11 | $ 7.51 | ||||||
Warrants outstanding (in shares) | 1,000,000 | |||||||
April 2023 Warrants | Institutional Investor | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants issued during period (in shares) | 900,000 | |||||||
April 2023 Warrants | Greg Beard | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants issued during period (in shares) | 100,000 | |||||||
December 2023 Warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrant exercise price of warrants (in USD per share) | $ 7 | |||||||
December 2023 Warrants | Institutional Investor | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants issued during period (in shares) | 2,300,000 | |||||||
Warrants outstanding (in shares) | 3,600,000 | |||||||
Private Placement With Armistice Capital Master Fund Ltd. | ||||||||
Debt Instrument [Line Items] | ||||||||
Stock issued and sold during period (in shares) | 227,435 | |||||||
Sale of stock (in USD per share) | $ 16 | |||||||
Private placement With Greg Beard, Co-Chairman And Chief Executive Officer | ||||||||
Debt Instrument [Line Items] | ||||||||
Stock issued and sold during period (in shares) | 60,241 | |||||||
Sale of stock (in USD per share) | $ 16.60 | |||||||
Private Placement | ||||||||
Debt Instrument [Line Items] | ||||||||
Sale of stock (in USD per share) | $ 6.71 | $ 10 | ||||||
Sale of stock, gross proceeds | $ 10 | |||||||
Private Placement | Institutional Investor | ||||||||
Debt Instrument [Line Items] | ||||||||
Stock issued and sold during period (in shares) | 2,300,000 | 900,000 | ||||||
Sale of stock (in USD per share) | $ 6.71 | $ 10 | ||||||
Sale of stock, gross proceeds | $ 15.4 | $ 9 | ||||||
Private Placement | Greg Beard | ||||||||
Debt Instrument [Line Items] | ||||||||
Stock issued and sold during period (in shares) | 100,000 | |||||||
Sale of stock (in USD per share) | $ 10 | |||||||
Sale of stock, gross proceeds | $ 1 |
EQUITY ISSUANCES - Narrative (D
EQUITY ISSUANCES - Narrative (Details) | 3 Months Ended | ||||||||||||||
Dec. 21, 2023 USD ($) $ / shares shares | Nov. 13, 2023 USD ($) $ / shares shares | May 23, 2023 USD ($) | Apr. 20, 2023 USD ($) $ / shares shares | Feb. 20, 2023 USD ($) $ / shares shares | Dec. 30, 2022 | Sep. 19, 2022 USD ($) $ / shares shares | Mar. 31, 2024 USD ($) $ / shares shares | Mar. 31, 2023 shares | Jan. 31, 2024 $ / shares | Jan. 29, 2024 $ / shares | Dec. 31, 2023 $ / shares shares | Apr. 30, 2023 $ / shares | Apr. 21, 2023 | Dec. 31, 2022 shares | |
Debt Instrument [Line Items] | |||||||||||||||
Issuance of Series C convertible preferred stock (in shares) | 23,102 | ||||||||||||||
Deemed contribution from exchange of Series C convertible preferred stock | $ | $ 20,492,568 | ||||||||||||||
Common stock - Class A, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Series D convertible preferred stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Exchange of Series C convertible preferred stock for Series D convertible preferred stock (in shares) | 15,582 | ||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | 0.0001 | ||||||||||||
Offering costs | $ | $ 18,197 | ||||||||||||||
Series C convertible preferred stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Exchange of Series C convertible preferred stock for Series D convertible preferred stock (in shares) | (15,582) | ||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred Stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion of stock (in shares) | (1,530) | ||||||||||||||
Preferred Stock | Series D convertible preferred stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion of stock (in shares) | (7,610) | ||||||||||||||
Shares outstanding (in shares) | 0 | 0 | 7,610 | 0 | |||||||||||
Exchange of Series C convertible preferred stock for Series D convertible preferred stock (in shares) | 15,582 | ||||||||||||||
Preferred Stock | Series C convertible preferred stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion of stock (in shares) | (1,530) | ||||||||||||||
Shares outstanding (in shares) | 5,990 | 21,572 | 5,990 | 0 | |||||||||||
Common Stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion of stock (in shares) | 382,500 | ||||||||||||||
Shares outstanding (in shares) | 12,900,076 | 41,046,186 | 11,115,561 | 31,710,217 | |||||||||||
Common Stock | Series D convertible preferred stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion of stock (in shares) | 1,414,117 | ||||||||||||||
Common Stock | Series C convertible preferred stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion of stock (in shares) | 3,825,000 | ||||||||||||||
September 2022 Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued during period (in shares) | 560,241 | ||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | 10.10 | $ 17.50 | $ 7.51 | $ 7.51 | $ 7 | $ 10.10 | |||||||||
Exercise period | 5 years 6 months | 5 years 9 months | |||||||||||||
September 2022 Pre-Funded Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued during period (in shares) | 272,565 | ||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 0.001 | ||||||||||||||
Warrant purchase price (in USD per share) | $ / shares | $ 16 | ||||||||||||||
April 2023 Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 11 | $ 7.51 | |||||||||||||
Restriction period | 6 months | ||||||||||||||
Exercise period | 5 years 9 months | 5 years 6 months | |||||||||||||
April 2023 Warrants | Institutional Investor | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued during period (in shares) | 900,000 | ||||||||||||||
April 2023 Warrants | Greg Beard | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued during period (in shares) | 100,000 | ||||||||||||||
April 2023 Pre-Funded Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 0.001 | ||||||||||||||
December 2023 Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 7 | ||||||||||||||
Restriction period | 6 months | ||||||||||||||
Exercise period | 5 years 6 months | 5 years 3 months | |||||||||||||
December 2023 Warrants | Institutional Investor | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued during period (in shares) | 2,300,000 | ||||||||||||||
December 2023 Pre-Funded Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 0.001 | ||||||||||||||
Private Placement With Armistice Capital Master Fund Ltd. | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | 227,435 | ||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 16 | ||||||||||||||
Private placement With Greg Beard, Co-Chairman And Chief Executive Officer | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | 60,241 | ||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 16.60 | ||||||||||||||
September 2022 Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Sale of stock, gross proceeds | $ | $ 9,000,000 | ||||||||||||||
September 2022 Private Placement | September 2022 Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued during period (in shares) | 560,241 | ||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 17.50 | ||||||||||||||
September 2022 Private Placement | September 2022 Pre-Funded Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 0.001 | ||||||||||||||
September 2022 Private Placement | April 2023 Pre-Funded Warrants | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Warrants issued during period (in shares) | 272,565 | ||||||||||||||
Warrant purchase price (in USD per share) | $ / shares | $ 16 | ||||||||||||||
Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 6.71 | $ 10 | |||||||||||||
Sale of stock, gross proceeds | $ | $ 10,000,000 | ||||||||||||||
Private Placement | Institutional Investor | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | 2,300,000 | 900,000 | |||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 6.71 | $ 10 | |||||||||||||
Sale of stock, gross proceeds | $ | $ 15,400,000 | $ 9,000,000 | |||||||||||||
Private Placement | Greg Beard | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | 100,000 | ||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 10 | ||||||||||||||
Sale of stock, gross proceeds | $ | $ 1,000,000 | ||||||||||||||
At-The-Market Offering Agreement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Sale of stock, potential consideration to be received | $ | $ 15,000,000 | ||||||||||||||
Sale of stock, percentage of gross proceeds to counterparty | 3% | ||||||||||||||
Sale of stock, trigger period after effective date, stock eligible for sale | 30 days | ||||||||||||||
December 2023 Private Placement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 6.71 | ||||||||||||||
Sale of stock, gross proceeds | $ | $ 15,400,000 | ||||||||||||||
December 2023 Private Placement | Institutional Investor | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Stock issued and sold during period (in shares) | 2,300,000 | ||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 6.71 | ||||||||||||||
Sale of stock, gross proceeds | $ | $ 15,400,000 | ||||||||||||||
Unsecured Convertible Promissory Notes | Unsecured Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion ratio | 250 | ||||||||||||||
Convertible, liquidation preference (in USD per share) | $ / shares | $ 1,000 | ||||||||||||||
Principal and interest settled upon issuance of equity | $ | $ 17,893,750 |
EQUITY ISSUANCES - Black Schole
EQUITY ISSUANCES - Black Scholes Input Assumptions (Details) | Mar. 31, 2024 USD ($) | Dec. 21, 2023 | Apr. 21, 2023 | Sep. 19, 2022 |
September 2022 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected life (in years) | 5 years 9 months | 5 years 6 months | ||
Fair value | $ 1,970,318 | |||
April 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected life (in years) | 5 years 9 months | 5 years 6 months | ||
Fair value | $ 3,540,238 | |||
December 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected life (in years) | 5 years 3 months | 5 years 6 months | ||
Fair value | $ 8,022,153 | |||
Expected volatility | September 2022 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 1.296 | |||
Expected volatility | April 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 1.296 | |||
Expected volatility | December 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 1.296 | |||
Risk-free interest rate | September 2022 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0.042 | |||
Risk-free interest rate | April 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0.042 | |||
Risk-free interest rate | December 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0.042 | |||
Expected dividend yield | September 2022 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0 | |||
Expected dividend yield | April 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0 | |||
Expected dividend yield | December 2023 Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT REPORTING - Results fro
SEGMENT REPORTING - Results from Operating Segments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
OPERATING REVENUES: | $ 27,522,185 | $ 17,266,215 |
NET OPERATING LOSS: | (3,582,022) | (14,616,113) |
OTHER INCOME (EXPENSE) | 9,424,311 | (32,044,449) |
NET INCOME (LOSS) | 5,842,289 | (46,660,562) |
DEPRECIATION AND AMORTIZATION: | (9,514,654) | (7,722,841) |
INTEREST EXPENSE: | (2,263,409) | (2,383,913) |
Energy Operations | ||
Segment Reporting Information [Line Items] | ||
OPERATING REVENUES: | 773,598 | 3,642,921 |
NET OPERATING LOSS: | (8,203,180) | (10,601,025) |
DEPRECIATION AND AMORTIZATION: | (1,325,667) | (1,332,873) |
INTEREST EXPENSE: | (24,449) | (159,287) |
Cryptocurrency Operations | ||
Segment Reporting Information [Line Items] | ||
OPERATING REVENUES: | 26,748,587 | 13,623,294 |
NET OPERATING LOSS: | 4,621,158 | (4,015,088) |
DEPRECIATION AND AMORTIZATION: | (8,188,987) | (6,389,968) |
INTEREST EXPENSE: | $ (2,238,960) | $ (2,224,626) |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Earnings Income (Loss) per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net income (loss) | $ 5,842,289 | $ (46,660,562) |
Less: net income (loss) attributable to noncontrolling interest | 918,287 | (18,119,131) |
NET INCOME (LOSS) attributable to Stronghold Digital Mining, Inc. | $ 4,924,002 | $ (28,541,431) |
Denominator: | ||
Weighted average number shares of Class A common shares outstanding (in shares) | 13,989,820 | 4,375,614 |
Earnings per share: | ||
Basic net income (loss) per share (in USD per share) | $ 0.35 | $ (6.52) |
Diluted net income (loss) per share (in USD per share) | $ 0.35 | $ (6.52) |
EARNINGS (LOSS) PER SHARE - Nar
EARNINGS (LOSS) PER SHARE - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 shares | |
Series C Preferred Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,497,500 |
Class V shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,405,760 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | ||
Apr. 01, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Tax receivable agreement, percentage | 85% | ||
Income tax expense (benefit) | $ 0 | $ 0 | |
Effective income tax rate | 0% | 0% |
SUPPLEMENTAL CASH AND NON-CAS_3
SUPPLEMENTAL CASH AND NON-CASH INFORMATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | ||
Income tax payments | $ 0 | $ 0 |
Interest payments | 2,238,634 | 2,222,350 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Purchases of property, plant and equipment included in accounts payable or accrued liabilities | 0 | 3,716 |
Reclassifications from deposits to property, plant and equipment | 8,000,643 | 4,658,970 |
Extinguishment of convertible note | 0 | 16,812,500 |
Extinguishment of accrued interest | 0 | 655,500 |
Issuance of Series C convertible preferred stock, net of issuance costs | 0 | 45,386,944 |
Warrants – B&M | 0 | 1,739,882 |
Return of transformers to settle outstanding payable | 0 | 6,007,500 |
Issuance of B&M Note | 0 | 3,500,000 |
Elimination of accounts payable | $ 0 | $ 11,426,720 |