COVER
COVER - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 10, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,962,361 | |
Common Stock - Class V | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,405,760 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS: | ||
Cash and cash equivalents | $ 4,979,299 | $ 13,296,703 |
Digital currencies | 641,999 | 109,827 |
Accounts receivable | 486,706 | 10,837,126 |
Inventory | 3,143,284 | 4,471,657 |
Prepaid insurance | 1,842,250 | 5,471,498 |
Due from related parties | 97,288 | 73,122 |
Other current assets | 1,137,834 | 1,381,737 |
Total current assets | 12,328,660 | 35,641,670 |
Equipment deposits | 0 | 10,081,307 |
Property, plant and equipment, net | 156,481,678 | 167,204,681 |
Operating lease right-of-use assets | 1,552,735 | 1,719,037 |
Land | 1,748,440 | 1,748,440 |
Road bond | 211,958 | 211,958 |
Security deposits | 348,888 | 348,888 |
Other noncurrent assets | 155,992 | 0 |
TOTAL ASSETS | 172,828,351 | 216,955,981 |
LIABILITIES: | ||
Accounts payable | 14,666,753 | 27,540,317 |
Accrued liabilities | 9,638,819 | 8,893,248 |
Financed insurance premiums | 1,112,558 | 4,587,935 |
Current portion of long-term debt, net of discounts and issuance fees | 1,654,634 | 17,422,546 |
Current portion of operating lease liabilities | 748,369 | 593,063 |
Due to related parties | 451,367 | 1,375,049 |
Total current liabilities | 28,272,500 | 60,412,158 |
Asset retirement obligation | 1,062,677 | 1,023,524 |
Warrant liabilities | 5,434,420 | 2,131,959 |
Long-term debt, net of discounts and issuance fees | 57,653,823 | 57,027,118 |
Long-term operating lease liabilities | 899,576 | 1,230,001 |
Contract liabilities | 560,510 | 351,490 |
Total liabilities | 93,883,506 | 122,176,250 |
COMMITMENTS AND CONTINGENCIES (NOTE 10) | ||
REDEEMABLE COMMON STOCK: | ||
Redeemable common stock | 10,563,277 | 11,754,587 |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Common Stock – Class A; $0.0001 par value; 685,440,000 shares authorized; 7,876,688 and 3,171,022 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively. | 788 | 317 |
Series C convertible preferred stock; $0.0001 par value; 23,102 shares authorized; 21,572 and 0 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively. | 2 | 0 |
Accumulated deficits | (321,126,596) | (240,443,302) |
Additional paid-in capital | 389,507,374 | 323,468,129 |
Total stockholders' equity | 68,381,568 | 83,025,144 |
Total redeemable common stock and stockholders' equity | 78,944,845 | 94,779,731 |
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY | 172,828,351 | 216,955,981 |
Common Stock - Class V | ||
REDEEMABLE COMMON STOCK: | ||
Redeemable common stock | $ 10,563,277 | $ 11,754,587 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 685,440,000 | 685,440,000 |
Common stock, issued (in shares) | 7,876,688 | 3,171,022 |
Common stock, outstanding (in shares) | 7,876,688 | 3,171,022 |
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) | 21,572 | 0 |
Preferred stock, outstanding (in shares) | 21,572 | 0 |
Common Stock - Class V | ||
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 | 2,605,760 |
Common stock - Class V, outstanding (in shares) | 2,405,760 | 2,605,760 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
OPERATING REVENUES: | ||||
Operating revenues | $ 17,726,957 | $ 26,366,649 | $ 53,226,913 | $ 85,488,242 |
OPERATING EXPENSES: | ||||
Fuel | 8,556,626 | 10,084,466 | 22,262,141 | 29,292,616 |
Operations and maintenance | 6,961,060 | 19,528,088 | 24,206,080 | 47,449,177 |
General and administrative | 6,598,951 | 11,334,212 | 25,145,444 | 32,848,291 |
Depreciation and amortization | 9,667,213 | 12,247,245 | 26,025,021 | 37,234,126 |
Loss on disposal of fixed assets | 0 | 461,940 | 108,367 | 2,231,540 |
Realized gain on sale of digital currencies | (131,706) | (185,396) | (725,139) | (936,506) |
Realized loss on sale of miner assets | 0 | 0 | 0 | 8,012,248 |
Impairments on miner assets | 0 | 11,610,000 | 0 | 16,600,000 |
Impairments on digital currencies | 357,411 | 465,651 | 683,241 | 8,176,868 |
Impairments on equipment deposits | 5,422,338 | 0 | 5,422,338 | 12,228,742 |
Total operating expenses | 37,431,893 | 65,546,206 | 103,127,493 | 193,137,102 |
NET OPERATING LOSS | (19,704,936) | (39,179,557) | (49,900,580) | (107,648,860) |
OTHER INCOME (EXPENSE): | ||||
Interest expense | (2,441,139) | (3,393,067) | (7,428,530) | (10,813,302) |
Loss on debt extinguishment | 0 | (28,697,021) | (28,960,947) | (28,697,021) |
Impairment on assets held for sale | 0 | (4,159,004) | 0 | (4,159,004) |
Gain on extinguishment of PPP loan | 0 | 0 | 0 | 841,670 |
Changes in fair value of warrant liabilities | (180,838) | 1,302,065 | 5,580,453 | 1,302,065 |
Realized gain on sale of derivative contract | 0 | 90,953 | 0 | 90,953 |
Changes in fair value of forward sale derivative | 0 | 0 | 0 | 3,435,639 |
Changes in fair value of convertible note | 0 | (1,204,739) | 0 | (2,167,500) |
Other | 15,000 | 20,000 | 45,000 | 50,000 |
Total other income (expense) | (2,606,977) | (36,040,813) | (30,764,024) | (40,116,500) |
NET LOSS | (22,311,913) | (75,220,370) | (80,664,604) | (147,765,360) |
NET LOSS attributable to noncontrolling interest | (5,188,727) | (44,000,155) | (26,663,731) | (86,435,347) |
Net loss attributable to Stronghold Digital Mining, Inc. | $ (17,123,186) | $ (31,220,215) | $ (54,000,873) | $ (61,330,013) |
NET LOSS attributable to Class A common shareholders: | ||||
Basic (in USD per share) | $ (2.26) | $ (12.67) | $ (8.93) | $ (28.17) |
Diluted (in USD per share) | $ (2.26) | $ (12.67) | $ (8.93) | $ (28.17) |
Weighted average number of Class A common shares outstanding: | ||||
Basic (in shares) | 7,569,511 | 2,463,163 | 6,047,891 | 2,177,206 |
Diluted (in shares) | 7,569,511 | 2,463,163 | 6,047,891 | 2,177,206 |
Cryptocurrency mining | ||||
OPERATING REVENUES: | ||||
Operating revenues | $ 12,684,894 | $ 12,283,695 | $ 37,764,990 | $ 50,715,424 |
Energy | ||||
OPERATING REVENUES: | ||||
Operating revenues | 1,210,811 | 13,071,894 | 4,682,590 | 29,807,512 |
Cryptocurrency hosting | ||||
OPERATING REVENUES: | ||||
Operating revenues | 3,789,375 | 93,279 | 9,195,072 | 282,327 |
Capacity | ||||
OPERATING REVENUES: | ||||
Operating revenues | 0 | 878,610 | 1,442,067 | 4,591,038 |
Other | ||||
OPERATING REVENUES: | ||||
Operating revenues | $ 41,877 | $ 39,171 | $ 142,194 | $ 91,941 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) | Total | Preferred Stock | Common A | Accumulated Deficit | Additional Paid-in Capital |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance (in shares) | 1,152,000 | 2,001,607 | |||
Beginning balance at Dec. 31, 2021 | $ (59,164,778) | $ 37,670,161 | $ 200 | $ (338,709,688) | $ 241,874,549 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss attributable to Stronghold Digital Mining, Inc. | (61,330,013) | (61,330,013) | |||
Net loss attributable to noncontrolling interest | (86,435,347) | $ (3,530,114) | (82,905,233) | ||
Maximum redemption right valuation [Common V Units] | 271,619,090 | 271,619,090 | |||
Stock-based compensation | 9,123,124 | 9,123,124 | |||
Issuance of common stock - September 2022 Private Placement (in shares) | 287,676 | ||||
Issuance of common stock - September 2022 Private Placement | 2,241,310 | $ 30 | 2,241,280 | ||
Vesting of restricted stock units (in shares) | 17,099 | ||||
Vesting of restricted stock units | 0 | $ 1 | (1) | ||
McClymonds arbitration award - paid by Q Power | 5,038,122 | 5,038,122 | |||
Warrants issued and outstanding | 21,135,392 | 21,135,392 | |||
Ending balance (in shares) at Sep. 30, 2022 | 1,152,000 | 2,306,382 | |||
Ending balance at Sep. 30, 2022 | 102,226,900 | $ 34,140,047 | $ 231 | (211,325,844) | 279,412,466 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance (in shares) | 1,152,000 | 2,003,488 | |||
Beginning balance at Jun. 30, 2022 | 135,603,452 | $ 35,937,061 | $ 200 | (155,708,865) | 255,375,056 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss attributable to Stronghold Digital Mining, Inc. | (31,220,215) | (31,220,215) | |||
Net loss attributable to noncontrolling interest | (44,000,155) | $ (1,797,014) | (42,203,141) | ||
Maximum redemption right valuation [Common V Units] | 17,806,377 | 17,806,377 | |||
Stock-based compensation | 3,377,499 | 3,377,499 | |||
Issuance of common stock - September 2022 Private Placement (in shares) | 287,676 | ||||
Issuance of common stock - September 2022 Private Placement | 2,241,310 | $ 30 | 2,241,280 | ||
Vesting of restricted stock units (in shares) | 15,218 | ||||
Vesting of restricted stock units | 0 | $ 1 | (1) | ||
McClymonds arbitration award - paid by Q Power | 5,038,122 | 5,038,122 | |||
Warrants issued and outstanding | 13,380,510 | 13,380,510 | |||
Ending balance (in shares) at Sep. 30, 2022 | 1,152,000 | 2,306,382 | |||
Ending balance at Sep. 30, 2022 | 102,226,900 | $ 34,140,047 | $ 231 | (211,325,844) | 279,412,466 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance (in shares) | 1,152,000 | 2,306,382 | |||
Beginning balance (in shares) | 0 | 3,171,022 | |||
Beginning balance at Dec. 31, 2022 | 83,025,144 | $ 0 | $ 317 | (240,443,302) | 323,468,129 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss attributable to Stronghold Digital Mining, Inc. | (54,000,873) | (54,000,873) | |||
Net loss attributable to noncontrolling interest | (26,663,731) | (26,663,731) | |||
Maximum redemption right valuation [Common V Units] | (18,690) | (18,690) | |||
Stock-based compensation (in shares) | 250,000 | ||||
Stock-based compensation | 7,603,859 | $ 25 | 7,603,834 | ||
Vesting of restricted stock units (in shares) | 337,515 | ||||
Vesting of restricted stock units | 0 | $ 34 | (34) | ||
Warrants issued and outstanding | 1,739,882 | 1,739,882 | |||
Exercised warrants (in shares) | 1,608,195 | ||||
Exercised warrants | 316 | $ 161 | 155 | ||
Redemption of Class V shares (in shares) | 200,000 | ||||
Redemption of Class V shares | 1,210,000 | $ 20 | 1,209,980 | ||
Issuance of common stock to settle payables (in shares) | 110,289 | ||||
Issuance of common stock to settle payables | 1,033,189 | $ 11 | 1,033,178 | ||
Issuance of common stock - April 2023 Private Placement (in shares) | 566,661 | ||||
Issuance of common stock - April 2023 Private Placement | 941,652 | $ 57 | 941,595 | ||
Issuance of common stock - ATM Agreement (in shares) | 1,250,506 | ||||
Issuance of common stock - ATM Agreement | 8,123,874 | $ 125 | 8,123,749 | ||
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 Series C convertible preferred stock (in shares) | (1,530) | 382,500 | |||
Conversion of Series C convertible preferred stock | 0 | $ 38 | (38) | ||
Ending balance (in shares) at Sep. 30, 2023 | 21,572 | 7,876,688 | |||
Ending balance at Sep. 30, 2023 | 68,381,568 | $ 2 | $ 788 | (321,126,596) | 389,507,374 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance (in shares) | 21,572 | 6,055,618 | |||
Beginning balance at Jun. 30, 2023 | 82,340,247 | $ 2 | $ 606 | (298,199,062) | 380,538,701 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss attributable to Stronghold Digital Mining, Inc. | (17,123,186) | (17,123,186) | |||
Net loss attributable to noncontrolling interest | (5,188,727) | (5,188,727) | |||
Maximum redemption right valuation [Common V Units] | (615,621) | (615,621) | |||
Stock-based compensation (in shares) | 0 | ||||
Stock-based compensation | 787,811 | $ 0 | 787,811 | ||
Vesting of restricted stock units (in shares) | 83,753 | ||||
Vesting of restricted stock units | 0 | $ 8 | (8) | ||
Exercised warrants (in shares) | 474,612 | ||||
Exercised warrants | 0 | $ 48 | (48) | ||
Redemption of Class V shares (in shares) | 0 | ||||
Redemption of Class V shares | 0 | $ 0 | 0 | ||
Issuance of common stock to settle payables (in shares) | 12,959 | ||||
Issuance of common stock to settle payables | 59,995 | $ 1 | 59,994 | ||
Issuance of common stock - April 2023 Private Placement (in shares) | 0 | ||||
Issuance of common stock - April 2023 Private Placement | 0 | $ 0 | 0 | ||
Issuance of common stock - ATM Agreement (in shares) | 1,249,746 | ||||
Issuance of common stock - ATM Agreement | 8,121,049 | $ 125 | 8,120,924 | ||
Ending balance (in shares) at Sep. 30, 2023 | 21,572 | 7,876,688 | |||
Ending balance at Sep. 30, 2023 | $ 68,381,568 | $ 2 | $ 788 | $ (321,126,596) | $ 389,507,374 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance (in shares) | 21,572 | 7,876,688 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (80,664,604) | $ (147,765,360) |
Adjustments to reconcile net loss to cash flows from operating activities: | ||
Depreciation and amortization | 26,025,021 | 37,234,126 |
Accretion of asset retirement obligation | 39,153 | 18,253 |
Gain on extinguishment of PPP loan | 0 | (841,670) |
Loss on disposal of fixed assets | 108,367 | 2,231,540 |
Realized loss on sale of miner assets | 0 | 8,012,248 |
Change in value of accounts receivable | 1,867,506 | 0 |
Amortization of debt issuance costs | 161,093 | 2,681,039 |
Stock-based compensation | 7,603,859 | 9,123,124 |
Loss on debt extinguishment | 28,960,947 | 28,697,021 |
Impairment on assets held for sale | 0 | 4,159,004 |
Impairments on equipment deposits | 5,422,338 | 12,228,742 |
Impairments on miner assets | 0 | 16,600,000 |
Changes in fair value of warrant liabilities | (5,580,453) | (1,302,065) |
Changes in fair value of forward sale derivative | 0 | (3,435,639) |
Realized gain on sale of derivative contract | 0 | (90,953) |
Forward sale contract prepayment | 0 | 970,000 |
Changes in fair value of convertible note | 0 | 2,167,500 |
Other | (229,485) | 0 |
(Increase) decrease in digital currencies: | ||
Mining revenue | (43,778,958) | (50,715,424) |
Net proceeds from sale of digital currencies | 42,563,545 | 46,209,822 |
Impairments on digital currencies | 683,241 | 8,176,868 |
(Increase) decrease in assets: | ||
Accounts receivable | 8,129,033 | 1,336,817 |
Prepaid insurance | 1,399,254 | 5,321,521 |
Due from related parties | (91,617) | (58,735) |
Inventory | 1,328,373 | 55,538 |
Other assets | 9,666 | (866,298) |
Increase (decrease) in liabilities: | ||
Accounts payable | (1,445,109) | 4,878,600 |
Due to related parties | (239,230) | 781,485 |
Accrued liabilities | 875,203 | (407,909) |
Other liabilities, including contract liabilities | (211,225) | (55,742) |
NET CASH FLOWS USED IN OPERATING ACTIVITIES | (7,064,082) | (14,656,547) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (14,743,269) | (68,052,422) |
Proceeds from sale of equipment deposits | 0 | 13,844,780 |
Equipment purchase deposits - net of future commitments | 0 | (13,656,428) |
NET CASH FLOWS USED IN INVESTING ACTIVITIES | (14,743,269) | (67,864,070) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of debt | (3,196,644) | (34,490,545) |
Repayments of financed insurance premiums | (1,474,889) | (3,992,336) |
Proceeds from debt, net of issuance costs paid in cash | (147,385) | |
Proceeds from debt, net of issuance costs paid in cash | 97,337,454 | |
Proceeds from private placements, net of issuance costs paid in cash | 9,824,567 | 8,599,440 |
Proceeds from ATM, net of issuance costs paid in cash | 8,483,982 | 0 |
Proceeds from exercise of warrants | 316 | 0 |
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 13,489,947 | 67,454,013 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (8,317,404) | (15,066,604) |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 13,296,703 | 31,790,115 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 4,979,299 | $ 16,723,511 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2023 | |
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 power purchase and 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 | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION The unaudited condensed consolidated balance sheet as of September 30, 2023, the unaudited condensed consolidated statements of operations and stockholders' equity for the three and nine months ended September 30, 2023, and 2022, and the unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2023, and 2022, 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 and nine months ended September 30, 2023, 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, 2022. 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. Cash and Cash Equivalents As of September 30, 2023, cash and cash equivalents includes $900,000 of restricted cash, which represents a continuous bond in place of $400,000 to mitigate fees charged by customs brokerage companies associated with importing miners and a $500,000 letter of credit required to finance the Company's directors and officers insurance policy. Reclassification During the first quarter of 2023, the Company revised its accounting policy to reclassify the presentation of imported power charges. Imported power charges are now recorded within fuel expenses, whereas they were previously netted against energy revenue. Prior periods have been reclassified to conform to the current period presentation. The reclassification increased 2022 energy revenues and fuel expenses as shown in the table below. The reclassification had no impact on net operating income (loss), earnings per share or equity. Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Energy revenues - previously disclosed $ 8,362,801 $ 7,129,732 $ 11,454,016 $ 14,247,688 Reclassification: imported power charges 681,591 561,494 1,617,878 1,329,753 Energy revenues - restated $ 9,044,392 $ 7,691,226 $ 13,071,894 $ 15,577,441 Fuel expenses - previously disclosed $ 9,338,394 $ 8,626,671 $ 8,466,588 $ 2,348,457 Reclassification: imported power charges 681,591 561,494 1,617,878 1,329,753 Fuel expenses - restated $ 10,019,985 $ 9,188,165 $ 10,084,466 $ 3,678,210 Recently Implemented Accounting Pronouncements In September 2016, the Financial Accounting Standards Board 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. Recently Issued Accounting Pronouncements There have been no recently issued accounting pronouncements applicable to the Company. |
DIGITAL CURRENCIES
DIGITAL CURRENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
DIGITAL CURRENCIES | NOTE 2 – DIGITAL CURRENCIES As of September 30, 2023, the Company held an aggregate amount of $641,999 in digital currencies comprised of unrestricted Bitcoin. Changes in digital currencies consisted of the following for the three and nine months ended September 30, 2023, and 2022: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Digital currencies at beginning of period $ 1,429,653 $ 5,131,987 $ 109,827 $ 10,417,865 Additions of digital currencies 15,069,008 12,283,695 43,778,958 50,715,424 Realized gain on sale of digital currencies 131,706 185,396 725,139 936,506 Impairment losses (357,411) (465,651) (683,241) (8,176,868) Proceeds from sale of digital currencies (15,630,957) (10,388,828) (43,288,684) (47,146,328) Collateral sold to close derivative — (4,559,895) — (4,559,895) Digital currencies at end of period $ 641,999 $ 2,186,704 $ 641,999 $ 2,186,704 Digital currencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the digital currency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. However, per ASC 350-30-35-18A, given the existence of a quoted price for Bitcoin on active markets, the Company exercises its unconditional option to bypass the qualitative assessment for its indefinite-lived digital currency assets in any period and proceeds directly to performing a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the digital currency asset. Subsequent reversal of impairment losses is not permitted. The Company performed impairment tests on its digital currencies for the periods presented in the table above and recognized impairment losses of $357,411 and $465,651 for the three months ended September 30, 2023, and 2022, respectively, and $683,241 and $8,176,868 for the nine months ended September 30, 2023, and 2022, respectively. On December 15, 2021, the Company entered into a forward sale with NYDIG Derivatives Trading LLC ("NYDIG Trading") providing for the sale of 250 Bitcoin at a floor price of $28,000 per Bitcoin (such sale, the “Forward Sale”). Pursuant to the Forward Sale, NYDIG Trading paid the Company $7.0 million, an amount equal to the floor price per Bitcoin on December 16, 2021, multiplied by the 250 Bitcoin provided for sale. On March 16, 2022, the Company executed additional option transactions. The net effect of those transactions was to adjust the capped final sale price to $50,000 from $85,500 per Bitcoin, resulting in $970,000 of proceeds to the Company. On July 27, 2022, the Company exited the variable prepaid forward sale contract derivative with NYDIG Trading. As a result, the Company delivered the restricted digital assets previously pledged as collateral to NYDIG Trading. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY Inventory consisted of the following components as of September 30, 2023, and December 31, 2022: September 30, 2023 December 31, 2022 Waste coal $ 2,977,652 $ 4,147,369 Fuel oil 85,049 143,592 Limestone 80,583 180,696 Inventory $ 3,143,284 $ 4,471,657 |
EQUIPMENT DEPOSITS
EQUIPMENT DEPOSITS | 9 Months Ended |
Sep. 30, 2023 | |
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). In September 2023, the Company evaluated the MinerVa Semiconductor Corp ("MinerVa") equipment deposits for impairment under the provisions of ASC 360, Property, Plant and Equipment . The Company is pursuing legal action through the dispute resolution process, which represents an indicator for impairment per ASC 360-10-35-21, as the Company no longer expects equipment deliveries. As a result, the Company impaired the remaining MinerVa equipment deposits balance of $5,422,338 during the third quarter of 2023. During 2022, due to continual delays in the anticipated delivery date of the remaining MinerVa miners, and the Company's declaration of an impasse, and adherence to the dispute resolution provision of the MinerVa Purchase Agreement, the Company undertook a test for recoverability under ASC 360-10-35-29 and a further discounted fair value analysis in accordance with ASC 820, Fair Value Measurement . The difference between the discounted fair value of the MinerVa equipment deposits and the carrying value resulted in the Company recording an impairment charge of $12,228,742 in the first quarter of 2022 and an additional $5,120,000 in the fourth quarter of 2022, as summarized in the table below. The following table details the total equipment deposits of $0 as of September 30, 2023: Vendor Model Count Delivery Timeframe Total Transferred to PP&E (1) Impairment Sold Equipment MinerVa MinerVa MV7 15,000 Oct '21 - TBD $ 68,887,550 $ (37,415,271) $ (22,771,080) $ (8,701,199) $ — Totals 15,000 $ 68,887,550 $ (37,415,271) $ (22,771,080) $ (8,701,199) $ — (1) Miners that were delivered and physically placed in service were transferred to a fixed asset account at the respective unit price as defined in the agreement. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023, and December 31, 2022: Useful Lives (Years) September 30, 2023 December 31, 2022 Electric plant 10 - 60 $ 66,836,615 $ 66,295,809 Strongboxes and power transformers 8 - 30 54,588,284 52,318,704 Machinery and equipment 5 - 20 16,187,810 18,131,977 Rolling stock 5 - 7 261,000 261,000 Cryptocurrency machines and powering supplies 2 - 3 101,687,166 81,945,396 Computer hardware and software 2 - 5 86,419 17,196 Vehicles and trailers 2 - 7 659,133 659,133 Leasehold improvements 2 - 3 2,935,855 — Construction in progress Not Depreciable 10,781,505 19,553,826 Asset retirement cost 10 - 30 580,452 580,452 254,604,239 239,763,493 Accumulated depreciation and amortization (98,122,561) (72,558,812) Property, plant and equipment, net $ 156,481,678 $ 167,204,681 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 $10,781,505 as of September 30, 2023, represents open contracts for future projects. Depreciation and amortization expense charged to operations was $9,667,213 and $12,247,245 for the three months ended September 30, 2023, and 2022, respectively, including depreciation of assets under finance leases of $122,762 and $83,642 for the three months ended September 30, 2023, and 2022, respectively. Depreciation and amortization expense charged to operations was $26,025,021 and $37,234,126 for the nine months ended September 30, 2023, and 2022, respectively, including depreciation of assets under finance leases of $368,285 and $250,927 for the nine months ended September 30, 2023, and 2022, respectively. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | NOTE 6 – ACCRUED LIABILITIES Accrued liabilities consisted of the following as of September 30, 2023, and December 31, 2022: September 30, 2023 December 31, 2022 Accrued legal and professional fees $ 528,757 $ 1,439,544 Accrued interest 21,485 1,343,085 Accrued sales and use tax 5,659,897 5,150,659 Accrued plant utilities and fuel 2,166,459 — Accrued salaries and benefits 145,516 285,300 Other 1,116,705 674,660 Accrued liabilities $ 9,638,819 $ 8,893,248 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 7 – DEBT Total debt consisted of the following as of September 30, 2023, and December 31, 2022: September 30, 2023 December 31, 2022 $499,520 loan, with interest at 2.74%, due February 2024. $ 44,748 $ 124,023 $499,895 loan, with interest at 3.20%, due November 2023. 22,351 121,470 $517,465 loan, with interest at 4.79%, due November 2024. 210,299 339,428 $585,476 loan, with interest at 4.99%, due November 2025. 388,369 513,334 $431,825 loan, with interest at 7.60%, due April 2024. 54,651 121,460 $58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. 54,239,946 56,114,249 $33,750,000 Convertible Note, with interest at 10.00%, due May 2024. — 16,812,500 $92,381 loan, with interest at 1.49%, due April 2026. 62,197 79,249 $64,136 loan, with interest at 11.85%, due May 2024. 20,392 39,056 $196,909 loan, with interest at 6.49%, due October 2025. 147,663 184,895 $60,679 loan, with interest at 7.60%, due March 2025. 51,399 — $3,500,000 Promissory Note, with interest at 7.50%, due October 2025. 3,000,000 — $1,184,935 Promissory Note, due June 2024. 1,066,442 — Total outstanding borrowings $ 59,308,457 $ 74,449,664 Current portion of long-term debt, net of discounts and issuance fees 1,654,634 17,422,546 Long-term debt, net of discounts and issuance fees $ 57,653,823 $ 57,027,118 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 $250,000 during the three months ended September 30, 2023. 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. The Company was in compliance with all applicable covenants under the WhiteHawk Refinancing Agreement as of September 30, 2023. 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. 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 $29 million during the first quarter of 2023. See Note 21 – Subsequent Events for additional information regarding the Exchange Agreement. On February 20, 2023, in connection with the consummation of the Exchange Agreement, the Company entered into a Registration Rights Agreement with the Purchasers (the “Registration Rights Agreement”) whereby it agreed to, among other things, (i) file within two 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. Pursuant to the B&M Note, the first $500,000 of the principal amount of the loan is 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 September 30, 2023, the Company paid $500,000 of principal pursuant to the B&M Note. Canaan Promissory Note 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 is payable to |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
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 $195,161 and $278,208 for the three months ended September 30, 2023, and 2022, respectively, and $495,161 and $581,708 for the nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022, 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 expires on December 31, 2023. The Company expensed $324,925 and $1,304,752 for the three months ended September 30, 2023, and 2022, respectively, and $2,406,726 and $2,225,864 for the nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022, below. Fuel Management Agreements Panther Creek Fuel Services LLC Effective August 1, 2021, 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 $2,093 and $353,879 for the three months ended September 30, 2023, and 2022, respectively, and $929,942 and $1,204,938 for the nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022, below. 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 $247,009 for the three months ended September 30, 2023, and 2022, respectively, and $374,944 and $580,626 for the nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022, below. 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 $133,499 and $392,761 for the three months ended September 30, 2023, and 2022, respectively, and $603,563 and $1,189,452 for the nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022, below. The Company expects that the Omnibus Services Agreement will be terminated, to be effective July 1, 2023. The Company expects to enter into a Transition Services Agreement whereby Stronghold LLC or its affiliates will pay a fee to Olympus Stronghold Services for certain limited operations and maintenance services. 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 $10,337 and $886,569 for the three months ended September 30, 2023, and 2022, respectively, and $1,856,501 and $2,911,738 for the nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022, 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. 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 $2,099,306 for the three months ended September 30, 2023, and 2022, respectively, and $2,269,290 and $4,749,432 for the nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022, 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. 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 has been recorded as stock-based compensation for the three and nine months ended September 30, 2023, within general and administrative expense in the condensed consolidated statements of operations. 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. 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 September 30, 2023, and December 31, 2022, were as follows: September 30, 2023 December 31, 2022 Coal Valley Properties, LLC $ — $ 134,452 Q Power LLC 20,119 500,000 Coal Valley Sales, LLC 68,172 — Panther Creek Energy Services LLC — 10,687 Panther Creek Fuel Services LLC — 53,482 Northampton Generating Fuel Supply Company, Inc. 363,076 594,039 Olympus Power LLC and other subsidiaries — 78,302 Scrubgrass Energy Services LLC — 4,087 Scrubgrass Fuel Services LLC — — Due to related parties $ 451,367 $ 1,375,049 |
CONCENTRATIONS
CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2023 | |
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 accounts receivable. Cash and cash equivalents customarily exceed federally insured limits. The Company’s significant credit risk is primarily concentrated with CES. Over the course of 2022, the Company transitioned entirely to CES from Direct Energy Business Marketing, LLC. CES accounted for approximately 100% of the Company's energy operations segment revenues for the three and nine months ended September 30, 2023. Additionally, CES accounted for approximately 100% of the Company's accounts receivable balance as of December 31, 2022, including approximately $5.1 million which CES received from PJM on the Company's behalf and forwarded to the Company upon receipt as of September 30, 2023. During 2023, the Company was notified of updated calculations from PJM and a FERC settlement with various parties that were assessed penalties for failing to deliver on capacity commitments during the performance assessment interval of December 2023. As a result, the Company recorded decreases in the value of accounts receivable of $724,756 and $1,867,506 within general and administrative expense related to expected reduced bonus payments in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023, respectively. The Company purchased 9% and 28% of coal from two related parties for the three months ended September 30, 2023, and 2022, respectively. For the nine months ended September 30, 2023, and 2022, the Company purchased 17% and 16% of coal, respectively, from the same related parties. See Note 8 – Related Party Transactions for further information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023, 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 September 30, 2023, 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. The aggregate purchase price does not include shipping costs, which are the responsibility of the Company and shall be determined at which time the miners are ready for shipment. As disclosed in Note 4 – Equipment Deposits , 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 Scrubgrass continues 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 regarding the notice of breach at the Scrubgrass Plant and Panther Creek Plant and other potential issues related to the computational load banks, including power consumption and potential resettlements of billing statements for certain prior months, are ongoing and discussions between PJM and the Company are continuing. 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-0088). 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. The defendants continue to believe the allegations in the complaint are without merit and intend to defend the suit 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. The defendants believe the allegations in the complaints are without merit and intend to defend the suit vigorously. 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 . Th e 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 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. |
REDEEMABLE COMMON STOCK
REDEEMABLE COMMON STOCK | 9 Months Ended |
Sep. 30, 2023 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE COMMON STOCK | NOTE 11 – REDEEMABLE COMMON STOCK Class V common stock represented 23.4% and 45.1% ownership of Stronghold LLC, as of September 30, 2023, and December 31, 2022, 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 September 30, 2023. The Company recorded redeemable common stock as presented in the table below. Common - Class V Shares Amount Balance - December 31, 2022 2,605,760 $ 11,754,587 Net loss attributable to noncontrolling interest — (26,663,731) Redemption of Class V shares (200,000) (1,210,000) Maximum redemption right valuation — 26,682,421 Balance - September 30, 2023 2,405,760 $ 10,563,277 NOTE 15 – EQUITY ISSUANCES May 2022 Private Placement On May 15, 2022, the Company entered into a note and warrant purchase agreement (the “Purchase Agreement”), by and among the Company and the purchasers thereto (collectively, the “May Purchasers”), whereby the Company agreed to issue and sell to the May Purchasers, and the May Purchasers agreed to purchase from the Company, (i) $33,750,000 aggregate principal amount of 10.00% unsecured convertible promissory notes (the “May 2022 Notes”) and (ii) warrants (the “May 2022 Warrants”) representing the right to purchase up to 631,800 shares of Class A common stock, of the Company with an exercise price per share equal to $25.00, on the terms and subject to the conditions set forth in the Purchase Agreement (collectively, the “2022 Private Placement”). The Purchase Agreement contained representations and warranties by the Company and the May Purchasers that are customary for transactions of this type. The May 2022 Notes and the May 2022 Warrants were sold for aggregate consideration of approximately $27.0 million. In connection with the 2022 Private Placement, the Company undertook to negotiate with the May Purchasers and to file a certificate of designation with the State of Delaware, following the closing of the 2022 Private Placement, for the terms of a new series of preferred stock. In connection with the 2022 Private Placement, the May 2022 Warrants were issued pursuant to the Warrant Agreement. The May 2022 Warrants are subject to mandatory cashless exercise provisions and have certain anti-dilution provisions. The May 2022 Warrants are exercisable for a five-year period from the closing. The issuance of the May 2022 Notes was within the scope of ASC 480-10 and, therefore, was initially measured at fair value (consistent with ASC 480-10-30-7). Additionally, under the guidance provided by ASC 815-40-15-7, the Company determined that the May 2022 Warrants were indexed to the Company's stock. As a result, the May 2022 Warrants were initially recorded at their fair value within equity. The May 2022 Notes were valued using the gross yield method under the income approach. As of the issuance date of May 15, 2022, a calibration analysis was performed by back solving the implied yield associated with the May 2022 Notes, such that the total value of the May 2022 Notes and the May 2022 Warrants equaled the purchase amount. The calibrated yield was then rolled forward for changes to the risk-free rate and option-adjusted spreads to the August 16, 2022, valuation date to value the May 2022 Notes. On August 16, 2022, the Company entered into an amendment to the Purchase Agreement, by and among the Company and the May Purchasers, whereby the Company agreed to amend the Purchase Agreement, such that $11.25 million of the outstanding principal was exchanged for the May Purchaser's execution of an amended and restated warrant agreement pursuant to which the strike price of the 631,800 May 2022 Warrants was reduced from $25.00 to $0.10. After giving effect to the principal reduction and amended and restated warrants, the Company was to continue to make subsequent monthly, payments to the May Purchasers on the fifteenth (15th) day of each of November 2022, December 2022, January 2023, and February 2023. The Company was able to elect to pay each such payment (A) in cash or (B) in shares of common stock, in each case, at a twenty percent (20%) discount to the average of the daily VWAPs for each of the twenty (20) consecutive trading days preceding the payment date. 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. See Note 21 – Subsequent Events for additional information regarding the Exchange Agreement. 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. See Note 21 – Subsequent Events for additional information regarding the Exchange Agreement. 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, was 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 September 30, 2023, using a Black-Scholes model with significant inputs as follows: September 30, 2023 Expected volatility 129.7 % Expected life (in years) 4.5 Risk-free interest rate 4.6 % Expected dividend yield 0.00 % Fair value $ 1,880,653 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, was 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 September 30, 2023, using a Black-Scholes model with significant inputs as follows: September 30, 2023 Expected volatility 129.7 % Expected life (in years) 5.25 Risk-free interest rate 4.6 % Expected dividend yield 0.00 % Fair value $ 3,553,767 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. 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 nine months ended September 30, 2023, the Company sold 1,278,906 ATM Shares at approximately $6.96 per share under the ATM Agreement, including 28,400 ATM Shares which settled subsequent to September 30, 2023, for gross proceeds of approximately $8.9 million less sales commissions of approximately $0.3 million, or net proceeds of approximately $8.6 million. As of September 30, 2023, the Company had incurred $376,124 of offering costs which has been capitalized within additional paid-in capital in the condensed consolidated balance sheet. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 9 Months Ended |
Sep. 30, 2023 | |
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 23.4% and 45.1% ownership of Stronghold LLC, as of September 30, 2023, and December 31, 2022, 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 nine months ended September 30, 2023: Class V Common Stock Outstanding Fair Value Price Temporary Equity Adjustments Balance - December 31, 2022 2,605,760 $ 4.51 $ 11,754,587 Net loss attributable to noncontrolling interest — (26,663,731) Redemption of Class V shares (200,000) (1,210,000) Adjustment of temporary equity to redemption amount (1) — 26,682,421 Balance - September 30, 2023 2,405,760 $ 4.39 $ 10,563,277 (1) Temporary equity 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 | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13 – STOCK-BASED COMPENSATION Stock-based compensation expense for the three months ended September 30, 2023, and 2022, equaled $787,811 and $3,377,499, respectively, and for the nine months ended September 30, 2023, and 2022, equaled $7,603,859 and $9,123,124, respectively. 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 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 |
WARRANTS
WARRANTS | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
WARRANTS | NOTE 14 – WARRANTS The following table summarizes outstanding warrants as of September 30, 2023. Number of Warrants Outstanding as of December 31, 2022 1,587,511 Issued 1,803,347 Exercised (1,610,580) Outstanding as of September 30, 2023 1,780,278 B&M Warrant On March 28, 2023, as part of the B&M Settlement described in Note 7 – Debt , the Company issued a stock purchase warrant to B&M providing for the right to purchase from the Company 300,000 shares of Class A common stock, par value $0.0001 per share, at an exercise price of $0.001 per warrant share. As of and during the nine months ended September 30, 2023, 200,000 shares of Class A common stock available for purchase pursuant to the B&M Warrant were exercised. May 2022 Private Placement On May 15, 2022, the Company entered into a note and warrant purchase agreement, by and among the Company and the purchasers thereto, whereby the Company agreed to issue and sell (i) $33,750,000 aggregate principal amount of 10.00% unsecured convertible promissory notes and (ii) warrants representing the right to purchase up to 631,800 shares of Class A common stock of the Company with an exercise price per share equal to $25.00. The promissory notes and warrants were sold for aggregate consideration of approximately $27 million. On August 16, 2022, the Company amended the note and warrant purchase agreement, such that $11.25 million of the outstanding principal was exchanged for the execution of an amended and restated warrant agreement pursuant to which the strike price of the 631,800 warrants was reduced from $25.00 to $0.10. Refer to Note 15 – Equity Issuances for additional details. During the nine months ended September 30, 2023, 230,000 warrants issued in connection with the May 2022 Private Placement, or subsequent transactions associated with the unsecured convertible promissory notes, were exercised. 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. 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. Refer to Note 15 – Equity Issuances for additional details. As of and during the nine months ended September 30, 2023, the pre-funded warrants for 272,565 shares of Class A common stock have been exercised. April 2023 Private Placement On April 20, 2023, the Company entered into Securities Purchase Agreements with an institutional investor and the Company's 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 (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. As of and during the nine months ended September 30, 2023, the pre-funded warrants for 433,340 shares of Class A common stock have been exercised. |
EQUITY ISSUANCES
EQUITY ISSUANCES | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
EQUITY ISSUANCES | NOTE 11 – REDEEMABLE COMMON STOCK Class V common stock represented 23.4% and 45.1% ownership of Stronghold LLC, as of September 30, 2023, and December 31, 2022, 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 September 30, 2023. The Company recorded redeemable common stock as presented in the table below. Common - Class V Shares Amount Balance - December 31, 2022 2,605,760 $ 11,754,587 Net loss attributable to noncontrolling interest — (26,663,731) Redemption of Class V shares (200,000) (1,210,000) Maximum redemption right valuation — 26,682,421 Balance - September 30, 2023 2,405,760 $ 10,563,277 NOTE 15 – EQUITY ISSUANCES May 2022 Private Placement On May 15, 2022, the Company entered into a note and warrant purchase agreement (the “Purchase Agreement”), by and among the Company and the purchasers thereto (collectively, the “May Purchasers”), whereby the Company agreed to issue and sell to the May Purchasers, and the May Purchasers agreed to purchase from the Company, (i) $33,750,000 aggregate principal amount of 10.00% unsecured convertible promissory notes (the “May 2022 Notes”) and (ii) warrants (the “May 2022 Warrants”) representing the right to purchase up to 631,800 shares of Class A common stock, of the Company with an exercise price per share equal to $25.00, on the terms and subject to the conditions set forth in the Purchase Agreement (collectively, the “2022 Private Placement”). The Purchase Agreement contained representations and warranties by the Company and the May Purchasers that are customary for transactions of this type. The May 2022 Notes and the May 2022 Warrants were sold for aggregate consideration of approximately $27.0 million. In connection with the 2022 Private Placement, the Company undertook to negotiate with the May Purchasers and to file a certificate of designation with the State of Delaware, following the closing of the 2022 Private Placement, for the terms of a new series of preferred stock. In connection with the 2022 Private Placement, the May 2022 Warrants were issued pursuant to the Warrant Agreement. The May 2022 Warrants are subject to mandatory cashless exercise provisions and have certain anti-dilution provisions. The May 2022 Warrants are exercisable for a five-year period from the closing. The issuance of the May 2022 Notes was within the scope of ASC 480-10 and, therefore, was initially measured at fair value (consistent with ASC 480-10-30-7). Additionally, under the guidance provided by ASC 815-40-15-7, the Company determined that the May 2022 Warrants were indexed to the Company's stock. As a result, the May 2022 Warrants were initially recorded at their fair value within equity. The May 2022 Notes were valued using the gross yield method under the income approach. As of the issuance date of May 15, 2022, a calibration analysis was performed by back solving the implied yield associated with the May 2022 Notes, such that the total value of the May 2022 Notes and the May 2022 Warrants equaled the purchase amount. The calibrated yield was then rolled forward for changes to the risk-free rate and option-adjusted spreads to the August 16, 2022, valuation date to value the May 2022 Notes. On August 16, 2022, the Company entered into an amendment to the Purchase Agreement, by and among the Company and the May Purchasers, whereby the Company agreed to amend the Purchase Agreement, such that $11.25 million of the outstanding principal was exchanged for the May Purchaser's execution of an amended and restated warrant agreement pursuant to which the strike price of the 631,800 May 2022 Warrants was reduced from $25.00 to $0.10. After giving effect to the principal reduction and amended and restated warrants, the Company was to continue to make subsequent monthly, payments to the May Purchasers on the fifteenth (15th) day of each of November 2022, December 2022, January 2023, and February 2023. The Company was able to elect to pay each such payment (A) in cash or (B) in shares of common stock, in each case, at a twenty percent (20%) discount to the average of the daily VWAPs for each of the twenty (20) consecutive trading days preceding the payment date. 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. See Note 21 – Subsequent Events for additional information regarding the Exchange Agreement. 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. See Note 21 – Subsequent Events for additional information regarding the Exchange Agreement. 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, was 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 September 30, 2023, using a Black-Scholes model with significant inputs as follows: September 30, 2023 Expected volatility 129.7 % Expected life (in years) 4.5 Risk-free interest rate 4.6 % Expected dividend yield 0.00 % Fair value $ 1,880,653 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, was 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 September 30, 2023, using a Black-Scholes model with significant inputs as follows: September 30, 2023 Expected volatility 129.7 % Expected life (in years) 5.25 Risk-free interest rate 4.6 % Expected dividend yield 0.00 % Fair value $ 3,553,767 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. 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 nine months ended September 30, 2023, the Company sold 1,278,906 ATM Shares at approximately $6.96 per share under the ATM Agreement, including 28,400 ATM Shares which settled subsequent to September 30, 2023, for gross proceeds of approximately $8.9 million less sales commissions of approximately $0.3 million, or net proceeds of approximately $8.6 million. As of September 30, 2023, the Company had incurred $376,124 of offering costs which has been capitalized within additional paid-in capital in the condensed consolidated balance sheet. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2023 | |
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 Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 OPERATING REVENUES: Energy Operations $ 1,252,688 $ 13,989,675 $ 6,266,851 $ 34,490,491 Cryptocurrency Operations 16,474,269 12,376,974 46,960,062 50,997,751 Total operating revenues $ 17,726,957 $ 26,366,649 $ 53,226,913 $ 85,488,242 NET OPERATING LOSS: Energy Operations $ (9,685,721) $ (16,086,915) $ (29,864,794) $ (39,862,217) Cryptocurrency Operations (10,019,215) (23,092,642) (20,035,786) (67,786,643) Total net operating loss $ (19,704,936) $ (39,179,557) $ (49,900,580) $ (107,648,860) OTHER EXPENSE (1) (2,606,977) (36,040,813) (30,764,024) (40,116,500) NET LOSS $ (22,311,913) $ (75,220,370) $ (80,664,604) $ (147,765,360) DEPRECIATION AND AMORTIZATION: Energy Operations $ (1,341,076) $ (1,292,241) $ (4,004,596) $ (3,874,894) Cryptocurrency Operations (8,326,137) (10,955,004) (22,020,425) (33,359,232) Total depreciation and amortization $ (9,667,213) $ (12,247,245) $ (26,025,021) $ (37,234,126) INTEREST EXPENSE: Energy Operations $ (39,007) $ (15,864) $ (450,472) $ (71,933) Cryptocurrency Operations (2,402,132) (3,377,203) (6,978,058) (10,741,369) Total interest expense $ (2,441,139) $ (3,393,067) $ (7,428,530) $ (10,813,302) (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
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
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 loss per share of Class A common stock for the three and nine months ended September 30, 2023, and 2022. Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Numerator: Net loss $ (22,311,913) $ (75,220,370) $ (80,664,604) $ (147,765,360) Less: net income (loss) attributable to noncontrolling interest (5,188,727) (44,000,155) (26,663,731) (86,435,347) Net loss attributable to Stronghold Digital Mining, Inc. $ (17,123,186) $ (31,220,215) $ (54,000,873) $ (61,330,013) Denominator : Weighted average number of Class A common shares outstanding 7,569,511 2,463,163 6,047,891 2,177,206 Basic net loss per share $ (2.26) $ (12.67) $ (8.93) $ (28.17) Diluted net loss per share $ (2.26) $ (12.67) $ (8.93) $ (28.17) Securities that could potentially dilute earnings (loss) per share in the future were not included in the computation of diluted loss per share for the three and nine months ended September 30, 2023, and 2022, because their inclusion would be anti-dilutive. The potentially dilutive impact of Series C Preferred Stock not yet exchanged for shares of Class A common stock totaled 5,393,000 as of September 30, 2023. Following the Series D Exchange Transaction (as defined herein) on November 13, 2023, as described in Note 21 – Subsequent Events , the potentially dilutive impact of Series C Preferred Stock and Series D Preferred Stock not yet exchanged for shares of Class A common stock totaled 4,392,854 in aggregate. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
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 and nine months ended September 30, 2023, and 2022, 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 and nine months ended September 30, 2023, and 2022, 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 September 30, 2023, and December 31, 2022. |
SUPPLEMENTAL CASH AND NON-CASH
SUPPLEMENTAL CASH AND NON-CASH INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
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 nine months ended September 30, 2023, and 2022, were as follows: September 30, 2023 September 30, 2022 Income tax payments $ — $ — Interest payments $ 7,054,387 $ 7,346,038 Supplementary non-cash investing and financing activities consisted of the following for the nine months ended September 30, 2023, and 2022: September 30, 2023 September 30, 2022 Equipment financed with debt $ 1,184,935 $ 60,256,322 McClymonds arbitration award - paid by Q Power — 5,038,122 Purchases of property, plant and equipment through finance leases 60,679 — Purchases of property, plant and equipment included in accounts payable or accrued liabilities 145,093 4,197,350 Operating lease right-of-use assets exchanged for lease liabilities 291,291 — Reclassifications from deposits to property, plant and equipment 4,658,970 54,207,076 Issued as part of financing: Warrants – WhiteHawk — 1,150,000 Warrants – convertible note — 6,604,881 Warrants – April 2023 Private Placement 8,882,914 — 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 — Financed insurance premiums 1,887,824 523,076 Class A common stock issued to settle outstanding payables or accrued liabilities 1,014,780 — |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2023 | |
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, the Company also measures certain assets and liabilities at fair value on a nonrecurring basis. The Company's non-financial assets, including Bitcoin, 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. Applying the market price of one Bitcoin on September 30, 2023, of approximately $27,004 to the Company’s approximately 24 Bitcoin held, results in an estimated fair value of the Company’s Bitcoin of approximately $654,314 as of September 30, 2023. The difference between the market price of Bitcoin as of December 31, 2022, and the carrying value was not material. The valuation of Bitcoin held is classified in Level 1 of the fair value hierarchy as it is based on quoted prices in active markets for identical assets. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 – SUBSEQUENT EVENTS Frontier Mining Managed Services Agreement On October 13, 2023, Stronghold and Frontier Outpost 8, LLC (“Frontier”) entered into a Managed Services Agreement (the “MSA”). Pursuant to the MSA, Frontier will provide certain services to the Company including monitoring, operating and maintaining (collectively, the “Services”) the Company’s wholly owned data centers located at each of the Panther Creek Plant and the Scrubgrass Plant. In exchange for the Services, the Company will pay to Frontier a Monthly Service Fee equal to $410,000 for the first three months of the MSA. Beginning on February 13, 2024, the Monthly Service Fee shall be subject to certain adjustments based upon the “Applicable Hash Price”, “Inflation Factor” and “Uptime” (each as defined in the MSA). In connection with the MSA, Frontier is eligible to receive a maximum of 120,000 shares of the Company’s Class A common stock over the three-year term of the MSA. Upon each three-month anniversary of the MSA, Frontier will receive between 10,000 and zero shares of Class A common stock based upon certain “Uptime” (as defined in the MSA) metrics over the preceding three months. The MSA has a term of three years and can be terminated in advance by the Company or Frontier in the event that certain obligations under the MSA are not met. 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. The Series D Exchange Transaction is expected to result in accretion of approximately 6.5% for the Company’s stockholders. On November 13, 2023, in connection with the consummation of the Series D Exchange Transaction, the Company entered into a Registration Rights Agreement with the Holder (the “Series D Registration Rights Agreement”) whereby it agreed to, among other things, (i) within fifteen business days of the closing of the Series D Exchange Transaction, file a resale registration statement (the “Series D Resale Registration Statement”) with the Securities and Exchange Commission covering all shares of Class A common stock issuable upon conversion of the Series D Preferred Stock or upon exercise of the pre-funded warrants that may be issued in lieu of Class A common stock upon conversion of the Series D Preferred Stock, and (ii) to cause the Series D Resale Registration Statement to become effective within the timeframes specified in the Series D Registration Rights Agreement. Panther Creek Outage The Panther Creek Plant entered its planned 15-day outage on October 28, 2023, expecting to import electricity from the PJM grid to power its data center during that time. Shortly after the outage began, Panther Creek was notified by PJM that there was an unrelated reliability and maintenance issue elsewhere in the region that would constrain Panther Creek’s electricity imports to 30 megawatts through its outage, less than half of what was expected and needed to fully power its data center. As a result, the Company took steps to shorten the outage, and the Panther Creek Plant restarted on November 9, 2023, and hash rate was fully restored shortly thereafter. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. |
Reclassification | ReclassificationDuring the first quarter of 2023, the Company revised its accounting policy to reclassify the presentation of imported power charges. Imported power charges are now recorded within fuel expenses, whereas they were previously netted against energy revenue. Prior periods have been reclassified to conform to the current period presentation. The reclassification increased 2022 energy revenues and fuel expenses as shown in the table below. The reclassification had no impact on net operating income (loss), earnings per share or equity. |
Recently Implemented Accounting Pronouncements/Recently Issued Accounting Pronouncements | Recently Implemented Accounting Pronouncements In September 2016, the Financial Accounting Standards Board 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. Recently Issued Accounting Pronouncements There have been no recently issued accounting pronouncements applicable to the Company. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Reclassifications | The reclassification increased 2022 energy revenues and fuel expenses as shown in the table below. The reclassification had no impact on net operating income (loss), earnings per share or equity. Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Energy revenues - previously disclosed $ 8,362,801 $ 7,129,732 $ 11,454,016 $ 14,247,688 Reclassification: imported power charges 681,591 561,494 1,617,878 1,329,753 Energy revenues - restated $ 9,044,392 $ 7,691,226 $ 13,071,894 $ 15,577,441 Fuel expenses - previously disclosed $ 9,338,394 $ 8,626,671 $ 8,466,588 $ 2,348,457 Reclassification: imported power charges 681,591 561,494 1,617,878 1,329,753 Fuel expenses - restated $ 10,019,985 $ 9,188,165 $ 10,084,466 $ 3,678,210 |
DIGITAL CURRENCIES (Tables)
DIGITAL CURRENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Digital Currencies | As of September 30, 2023, the Company held an aggregate amount of $641,999 in digital currencies comprised of unrestricted Bitcoin. Changes in digital currencies consisted of the following for the three and nine months ended September 30, 2023, and 2022: Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Digital currencies at beginning of period $ 1,429,653 $ 5,131,987 $ 109,827 $ 10,417,865 Additions of digital currencies 15,069,008 12,283,695 43,778,958 50,715,424 Realized gain on sale of digital currencies 131,706 185,396 725,139 936,506 Impairment losses (357,411) (465,651) (683,241) (8,176,868) Proceeds from sale of digital currencies (15,630,957) (10,388,828) (43,288,684) (47,146,328) Collateral sold to close derivative — (4,559,895) — (4,559,895) Digital currencies at end of period $ 641,999 $ 2,186,704 $ 641,999 $ 2,186,704 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following components as of September 30, 2023, and December 31, 2022: September 30, 2023 December 31, 2022 Waste coal $ 2,977,652 $ 4,147,369 Fuel oil 85,049 143,592 Limestone 80,583 180,696 Inventory $ 3,143,284 $ 4,471,657 |
EQUIPMENT DEPOSITS (Tables)
EQUIPMENT DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Equipment Deposits | The following table details the total equipment deposits of $0 as of September 30, 2023: Vendor Model Count Delivery Timeframe Total Transferred to PP&E (1) Impairment Sold Equipment MinerVa MinerVa MV7 15,000 Oct '21 - TBD $ 68,887,550 $ (37,415,271) $ (22,771,080) $ (8,701,199) $ — Totals 15,000 $ 68,887,550 $ (37,415,271) $ (22,771,080) $ (8,701,199) $ — (1) Miners that were delivered and physically placed in service were transferred to a fixed asset account at the respective unit price as defined in the agreement. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following as of September 30, 2023, and December 31, 2022: Useful Lives (Years) September 30, 2023 December 31, 2022 Electric plant 10 - 60 $ 66,836,615 $ 66,295,809 Strongboxes and power transformers 8 - 30 54,588,284 52,318,704 Machinery and equipment 5 - 20 16,187,810 18,131,977 Rolling stock 5 - 7 261,000 261,000 Cryptocurrency machines and powering supplies 2 - 3 101,687,166 81,945,396 Computer hardware and software 2 - 5 86,419 17,196 Vehicles and trailers 2 - 7 659,133 659,133 Leasehold improvements 2 - 3 2,935,855 — Construction in progress Not Depreciable 10,781,505 19,553,826 Asset retirement cost 10 - 30 580,452 580,452 254,604,239 239,763,493 Accumulated depreciation and amortization (98,122,561) (72,558,812) Property, plant and equipment, net $ 156,481,678 $ 167,204,681 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of September 30, 2023, and December 31, 2022: September 30, 2023 December 31, 2022 Accrued legal and professional fees $ 528,757 $ 1,439,544 Accrued interest 21,485 1,343,085 Accrued sales and use tax 5,659,897 5,150,659 Accrued plant utilities and fuel 2,166,459 — Accrued salaries and benefits 145,516 285,300 Other 1,116,705 674,660 Accrued liabilities $ 9,638,819 $ 8,893,248 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Total debt consisted of the following as of September 30, 2023, and December 31, 2022: September 30, 2023 December 31, 2022 $499,520 loan, with interest at 2.74%, due February 2024. $ 44,748 $ 124,023 $499,895 loan, with interest at 3.20%, due November 2023. 22,351 121,470 $517,465 loan, with interest at 4.79%, due November 2024. 210,299 339,428 $585,476 loan, with interest at 4.99%, due November 2025. 388,369 513,334 $431,825 loan, with interest at 7.60%, due April 2024. 54,651 121,460 $58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. 54,239,946 56,114,249 $33,750,000 Convertible Note, with interest at 10.00%, due May 2024. — 16,812,500 $92,381 loan, with interest at 1.49%, due April 2026. 62,197 79,249 $64,136 loan, with interest at 11.85%, due May 2024. 20,392 39,056 $196,909 loan, with interest at 6.49%, due October 2025. 147,663 184,895 $60,679 loan, with interest at 7.60%, due March 2025. 51,399 — $3,500,000 Promissory Note, with interest at 7.50%, due October 2025. 3,000,000 — $1,184,935 Promissory Note, due June 2024. 1,066,442 — Total outstanding borrowings $ 59,308,457 $ 74,449,664 Current portion of long-term debt, net of discounts and issuance fees 1,654,634 17,422,546 Long-term debt, net of discounts and issuance fees $ 57,653,823 $ 57,027,118 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Amounts due to related parties as of September 30, 2023, and December 31, 2022, were as follows: September 30, 2023 December 31, 2022 Coal Valley Properties, LLC $ — $ 134,452 Q Power LLC 20,119 500,000 Coal Valley Sales, LLC 68,172 — Panther Creek Energy Services LLC — 10,687 Panther Creek Fuel Services LLC — 53,482 Northampton Generating Fuel Supply Company, Inc. 363,076 594,039 Olympus Power LLC and other subsidiaries — 78,302 Scrubgrass Energy Services LLC — 4,087 Scrubgrass Fuel Services LLC — — Due to related parties $ 451,367 $ 1,375,049 |
REDEEMABLE COMMON STOCK (Tables
REDEEMABLE COMMON STOCK (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022 2,605,760 $ 11,754,587 Net loss attributable to noncontrolling interest — (26,663,731) Redemption of Class V shares (200,000) (1,210,000) Maximum redemption right valuation — 26,682,421 Balance - September 30, 2023 2,405,760 $ 10,563,277 |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 nine months ended September 30, 2023: Class V Common Stock Outstanding Fair Value Price Temporary Equity Adjustments Balance - December 31, 2022 2,605,760 $ 4.51 $ 11,754,587 Net loss attributable to noncontrolling interest — (26,663,731) Redemption of Class V shares (200,000) (1,210,000) Adjustment of temporary equity to redemption amount (1) — 26,682,421 Balance - September 30, 2023 2,405,760 $ 4.39 $ 10,563,277 (1) Temporary equity 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) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Outstanding Warrants | The following table summarizes outstanding warrants as of September 30, 2023. Number of Warrants Outstanding as of December 31, 2022 1,587,511 Issued 1,803,347 Exercised (1,610,580) Outstanding as of September 30, 2023 1,780,278 |
EQUITY ISSUANCES (Tables)
EQUITY ISSUANCES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Black Scholes Input Assumptions | The fair value of the warrant liabilities was estimated as of September 30, 2023, using a Black-Scholes model with significant inputs as follows: September 30, 2023 Expected volatility 129.7 % Expected life (in years) 4.5 Risk-free interest rate 4.6 % Expected dividend yield 0.00 % Fair value $ 1,880,653 September 30, 2023 Expected volatility 129.7 % Expected life (in years) 5.25 Risk-free interest rate 4.6 % Expected dividend yield 0.00 % Fair value $ 3,553,767 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 OPERATING REVENUES: Energy Operations $ 1,252,688 $ 13,989,675 $ 6,266,851 $ 34,490,491 Cryptocurrency Operations 16,474,269 12,376,974 46,960,062 50,997,751 Total operating revenues $ 17,726,957 $ 26,366,649 $ 53,226,913 $ 85,488,242 NET OPERATING LOSS: Energy Operations $ (9,685,721) $ (16,086,915) $ (29,864,794) $ (39,862,217) Cryptocurrency Operations (10,019,215) (23,092,642) (20,035,786) (67,786,643) Total net operating loss $ (19,704,936) $ (39,179,557) $ (49,900,580) $ (107,648,860) OTHER EXPENSE (1) (2,606,977) (36,040,813) (30,764,024) (40,116,500) NET LOSS $ (22,311,913) $ (75,220,370) $ (80,664,604) $ (147,765,360) DEPRECIATION AND AMORTIZATION: Energy Operations $ (1,341,076) $ (1,292,241) $ (4,004,596) $ (3,874,894) Cryptocurrency Operations (8,326,137) (10,955,004) (22,020,425) (33,359,232) Total depreciation and amortization $ (9,667,213) $ (12,247,245) $ (26,025,021) $ (37,234,126) INTEREST EXPENSE: Energy Operations $ (39,007) $ (15,864) $ (450,472) $ (71,933) Cryptocurrency Operations (2,402,132) (3,377,203) (6,978,058) (10,741,369) Total interest expense $ (2,441,139) $ (3,393,067) $ (7,428,530) $ (10,813,302) (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) | 9 Months Ended |
Sep. 30, 2023 | |
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 loss per share of Class A common stock for the three and nine months ended September 30, 2023, and 2022. Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Numerator: Net loss $ (22,311,913) $ (75,220,370) $ (80,664,604) $ (147,765,360) Less: net income (loss) attributable to noncontrolling interest (5,188,727) (44,000,155) (26,663,731) (86,435,347) Net loss attributable to Stronghold Digital Mining, Inc. $ (17,123,186) $ (31,220,215) $ (54,000,873) $ (61,330,013) Denominator : Weighted average number of Class A common shares outstanding 7,569,511 2,463,163 6,047,891 2,177,206 Basic net loss per share $ (2.26) $ (12.67) $ (8.93) $ (28.17) Diluted net loss per share $ (2.26) $ (12.67) $ (8.93) $ (28.17) |
SUPPLEMENTAL CASH AND NON-CAS_2
SUPPLEMENTAL CASH AND NON-CASH INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental disclosures of cash flow information for the nine months ended September 30, 2023, and 2022, were as follows: September 30, 2023 September 30, 2022 Income tax payments $ — $ — Interest payments $ 7,054,387 $ 7,346,038 Supplementary non-cash investing and financing activities consisted of the following for the nine months ended September 30, 2023, and 2022: September 30, 2023 September 30, 2022 Equipment financed with debt $ 1,184,935 $ 60,256,322 McClymonds arbitration award - paid by Q Power — 5,038,122 Purchases of property, plant and equipment through finance leases 60,679 — Purchases of property, plant and equipment included in accounts payable or accrued liabilities 145,093 4,197,350 Operating lease right-of-use assets exchanged for lease liabilities 291,291 — Reclassifications from deposits to property, plant and equipment 4,658,970 54,207,076 Issued as part of financing: Warrants – WhiteHawk — 1,150,000 Warrants – convertible note — 6,604,881 Warrants – April 2023 Private Placement 8,882,914 — 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 — Financed insurance premiums 1,887,824 523,076 Class A common stock issued to settle outstanding payables or accrued liabilities 1,014,780 — |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) | 9 Months Ended | |
Jul. 27, 2022 | Sep. 30, 2023 a segment power_generation_facility 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 - Narrati
BASIS OF PRESENTATION - Narrative (Details) | 9 Months Ended | |||||
May 15, 2023 $ / shares | Sep. 30, 2023 USD ($) $ / shares | Apr. 20, 2023 $ / shares | Mar. 28, 2023 $ / shares | Dec. 31, 2022 $ / shares | Sep. 19, 2022 $ / shares | |
Class of Stock [Line Items] | ||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Restricted cash | $ 900,000 | |||||
Continuous bond | 400,000 | |||||
Proceeds from letter of credit | $ 500,000 | |||||
Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Stock split, conversion ratio | 0.1 | |||||
Common Stock - Class V | ||||||
Class of Stock [Line Items] | ||||||
Common stock - Class V, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Stock split, conversion ratio | 0.1 |
BASIS OF PRESENTATION - Reclass
BASIS OF PRESENTATION - Reclassifications (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Operating revenues | $ 17,726,957 | $ 26,366,649 | $ 53,226,913 | $ 85,488,242 | |||
Fuel expense | 8,556,626 | $ 3,678,210 | 10,084,466 | $ 9,188,165 | $ 10,019,985 | 22,262,141 | 29,292,616 |
Previously Reported | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Fuel expense | 2,348,457 | 8,466,588 | 8,626,671 | 9,338,394 | |||
Revision of Prior Period, Reclassification, Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Fuel expense | 1,329,753 | 1,617,878 | 561,494 | 681,591 | |||
Energy | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Operating revenues | $ 1,210,811 | 15,577,441 | 13,071,894 | 7,691,226 | 9,044,392 | $ 4,682,590 | $ 29,807,512 |
Energy | Previously Reported | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Operating revenues | 14,247,688 | 11,454,016 | 7,129,732 | 8,362,801 | |||
Energy | Revision of Prior Period, Reclassification, Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Operating revenues | $ 1,329,753 | $ 1,617,878 | $ 561,494 | $ 681,591 |
DIGITAL CURRENCIES - Narrative
DIGITAL CURRENCIES - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||||
Dec. 15, 2021 USD ($) $ / bitcoin | Mar. 16, 2021 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 16, 2022 $ / bitcoin | |
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Digital currencies | $ | $ 641,999 | $ 641,999 | $ 109,827 | |||||
Impairments on digital currencies | $ | 357,411 | $ 465,651 | 683,241 | $ 8,176,868 | ||||
Digital currencies | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Impairments on digital currencies | $ | $ 357,411 | $ 465,651 | $ 683,241 | $ 8,176,868 | ||||
Compound Derivative Instrument | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Number of derivative instruments to be sold (in bitcoin) | $ / bitcoin | 250 | |||||||
Derivative floor price (in dollars per bitcoin) | $ / bitcoin | 28,000 | |||||||
Forward sale contract prepayment | $ | $ 7,000,000 | $ 970,000 | ||||||
Compound Derivative Instrument | Maximum | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Capped price (in dollars per bitcoin) | $ / bitcoin | 85,500 | |||||||
Compound Derivative Instrument | Minimum | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Capped price (in dollars per bitcoin) | $ / bitcoin | 50,000 |
DIGITAL CURRENCIES (Details)
DIGITAL CURRENCIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Indefinite-lived Intangible Assets [Roll Forward] | ||||
Realized gain on sale of digital currencies | $ 131,706 | $ 185,396 | $ 725,139 | $ 936,506 |
Impairment losses | (357,411) | (465,651) | (683,241) | (8,176,868) |
Digital currencies | ||||
Indefinite-lived Intangible Assets [Roll Forward] | ||||
Digital currencies at beginning of period | 1,429,653 | 5,131,987 | 109,827 | 10,417,865 |
Additions of digital currencies | 15,069,008 | 12,283,695 | 43,778,958 | 50,715,424 |
Realized gain on sale of digital currencies | 131,706 | 185,396 | 725,139 | 936,506 |
Impairment losses | (357,411) | (465,651) | (683,241) | (8,176,868) |
Proceeds from sale of digital currencies | (15,630,957) | (10,388,828) | (43,288,684) | (47,146,328) |
Collateral sold to close derivative | 0 | (4,559,895) | 0 | (4,559,895) |
Digital currencies at end of period | $ 641,999 | $ 2,186,704 | $ 641,999 | $ 2,186,704 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Waste coal | $ 2,977,652 | $ 4,147,369 |
Fuel oil | 85,049 | 143,592 |
Limestone | 80,583 | 180,696 |
Inventory | $ 3,143,284 | $ 4,471,657 |
EQUIPMENT DEPOSITS - Narrative
EQUIPMENT DEPOSITS - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||
Impairments on equipment deposits | $ 5,422,338 | $ 0 | $ 5,422,338 | $ 12,228,742 | ||
MinerVa, MinerVA | ||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||||
Impairment | $ 5,120,000 | $ 12,228,742 |
EQUIPMENT DEPOSITS - Schedule o
EQUIPMENT DEPOSITS - Schedule of Equipment Deposits (Details) | Sep. 30, 2023 USD ($) miner | Dec. 31, 2022 USD ($) | Mar. 31, 2022 miner | Apr. 02, 2021 USD ($) miner |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Count (in miners) | miner | 15,000 | |||
Total Commitments | $ 68,887,550 | |||
Transferred to PP&E | (37,415,271) | |||
Impairment | (22,771,080) | |||
Sold | (8,701,199) | |||
Equipment Deposits | $ 0 | $ 10,081,307 | ||
MinerVa, MinerVA | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Count (in miners) | miner | 15,000 | 15,000 | 15,000 | |
Total Commitments | $ 68,887,550 | $ 73,387,500 | ||
Transferred to PP&E | (37,415,271) | |||
Impairment | (22,771,080) | |||
Sold | (8,701,199) | |||
Equipment Deposits | $ 0 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Schedule of Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant And Equipment, Excluding Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 254,604,239 | $ 239,763,493 |
Accumulated depreciation and amortization | (98,122,561) | (72,558,812) |
Property, plant and equipment, net | 156,481,678 | 167,204,681 |
Electric plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 66,836,615 | 66,295,809 |
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 | 52,318,704 |
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 | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 16,187,810 | 18,131,977 |
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 | $ 101,687,166 | 81,945,396 |
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 | $ 86,419 | 17,196 |
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 | $ 659,133 | 659,133 |
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 | $ 2,935,855 | 0 |
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 | $ 10,781,505 | 19,553,826 |
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 | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | $ 9,667,213 | $ 12,247,245 | $ 26,025,021 | $ 37,234,126 | |
Depreciation of assets under finance leases | 122,762 | $ 83,642 | 368,285 | $ 250,927 | |
Gross value of assets under finance leases | 2,678,265 | 2,678,265 | $ 2,890,665 | ||
Assets under finance leases, accumulated amortization | 1,304,317 | 1,304,317 | 1,074,091 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 10,781,505 | $ 10,781,505 | $ 19,553,826 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Other Accrued Liabilities: | ||
Accrued legal and professional fees | $ 528,757 | $ 1,439,544 |
Accrued interest | 21,485 | 1,343,085 |
Accrued sales and use tax | 5,659,897 | 5,150,659 |
Accrued plant utilities and fuel | 2,166,459 | 0 |
Accrued salaries and benefits | 145,516 | 285,300 |
Other | 1,116,705 | 674,660 |
Accrued liabilities | $ 9,638,819 | $ 8,893,248 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) | Sep. 30, 2023 | Mar. 28, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 59,308,457 | $ 74,449,664 | |
Current portion of long-term debt, net of discounts and issuance fees | 1,654,634 | 17,422,546 | |
Long-term debt, net of discounts and issuance fees | 57,653,823 | 57,027,118 | |
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 | $ 44,748 | 124,023 | |
Loans payable | $499,895 loan, with interest at 3.20%, due November 2023. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 499,895 | ||
Interest rate | 3.20% | ||
Long-term debt, gross | $ 22,351 | 121,470 | |
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 | $ 210,299 | 339,428 | |
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 | $ 388,369 | 513,334 | |
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 | $ 54,651 | 121,460 | |
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 | $ 54,239,946 | 56,114,249 | |
Loans payable | $33,750,000 Convertible Note, with interest at 10.00%, due May 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 33,750,000 | ||
Interest rate | 10% | ||
Long-term debt, gross | $ 0 | 16,812,500 | |
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 | $ 62,197 | 79,249 | |
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 | $ 20,392 | 39,056 | |
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 | $ 147,663 | 184,895 | |
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 | $ 51,399 | 0 | |
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 | 0 | |
Loans payable | $1,184,935 Promissory Note, due June 2024. | |||
Debt Instrument [Line Items] | |||
Debt face amount | 1,184,935 | ||
Long-term debt, gross | $ 1,066,442 | $ 0 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||||||||
Jul. 19, 2023 USD ($) $ / bitcoin | Feb. 20, 2023 USD ($) | Feb. 06, 2023 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Mar. 28, 2023 USD ($) transformer installment shares | Dec. 31, 2022 $ / shares | Dec. 30, 2022 $ / shares | Oct. 27, 2022 USD ($) | May 15, 2022 shares | |
Extinguishment of Debt [Line Items] | |||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Loss on debt extinguishment | $ 0 | $ 29,000,000 | $ 28,697,021 | $ 28,960,947 | $ 28,697,021 | ||||||||
Resale registration statement, filing period triggered by annual Report filing | 2 days | ||||||||||||
Warrants issued during period (in shares) | shares | 631,800 | ||||||||||||
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] | |||||||||||||
Upfront payment | $ 1,777,402 | ||||||||||||
Promissory note | $ 1,184,935 | ||||||||||||
Loans payable | Canaan Inc | Miner Equipment, A1346 Bitcoin Miners | |||||||||||||
Extinguishment of Debt [Line Items] | |||||||||||||
Number of miners purchased | $ / bitcoin | 2,000 | ||||||||||||
Purchases | $ 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 | |||||||||||
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 | $ 250,000 | ||||||||||||
Maximum leverage ratio | 4 | ||||||||||||
Interest rate | 10% | 10% | |||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Loans payable | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||||||
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. | Secured Debt | Loans payable | |||||||||||||
Extinguishment of Debt [Line Items] | |||||||||||||
Debt face amount | $ 35,100,000 | ||||||||||||
$58,149,411 Credit Agreement, with interest at 10.00% plus SOFR, due October 2025. | Line of Credit | Loans payable | |||||||||||||
Extinguishment of Debt [Line Items] | |||||||||||||
Debt face amount | $ 23,000,000 | ||||||||||||
Amended And Restated 10% Notes | Loans payable | |||||||||||||
Extinguishment of Debt [Line Items] | |||||||||||||
Interest rate | 10% | ||||||||||||
Debt extinguished, paid-in-kind | $ 16,900,000 | ||||||||||||
$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 | ||||||||||
Interest rate | 7.50% | 7.50% | |||||||||||
Warrants issued during period (in shares) | shares | 300,000 | ||||||||||||
Principal amount due, subject to contingencies | $ 500,000 | ||||||||||||
Principal amount due, subject to contingencies, number of installments | installment | 4 | ||||||||||||
Principal installment amount due, subject to contingencies | $ 125,000 | ||||||||||||
Repayment of debt | $ 500,000 |
RELATED-PARTY TRANSACTIONS - Na
RELATED-PARTY TRANSACTIONS - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 24 Months Ended | |||||||||||||||
Apr. 20, 2023 USD ($) $ / shares shares | Apr. 19, 2023 USD ($) | Oct. 01, 2022 USD ($) | Sep. 19, 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 | Sep. 30, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / T owner T $ / shares | Sep. 30, 2022 USD ($) | Oct. 31, 2023 USD ($) | May 15, 2022 $ / shares shares | |
Related Party Transaction [Line Items] | |||||||||||||||||||
Fuel expense | $ 8,556,626 | $ 3,678,210 | $ 10,084,466 | $ 9,188,165 | $ 10,019,985 | $ 22,262,141 | $ 29,292,616 | ||||||||||||
Operations and maintenance expense | $ 6,961,060 | 19,528,088 | $ 24,206,080 | 47,449,177 | |||||||||||||||
Warrants issued during period (in shares) | shares | 631,800 | ||||||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 25 | ||||||||||||||||||
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 | ||||||||||||||||
Pre-Funded Warrants | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Warrants issued during period (in shares) | shares | 272,565 | ||||||||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 0.001 | $ 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 | ||||||||||||||||||
Coal Valley Properties, LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Number of owners | owner | 1 | ||||||||||||||||||
Q Power LLC | Coal Reclamation Partnership | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Ownership percentage by noncontrolling owners | 16.26% | 16.26% | |||||||||||||||||
Waste Coal Agreement (the “WCA”) | Coal Valley Sales, LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Waste coal annual quantity committed (in ton) | T | 200,000 | ||||||||||||||||||
Waste coal, handling fee (in USD per ton) | $ / T | 6.07 | ||||||||||||||||||
Waste coal commitment, units in excess of annual commitment, price per unit (in USD per ton) | $ / T | 1 | ||||||||||||||||||
Management Fee | Olympus Stronghold Services, LLC | Forecast | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Related party transaction amount | $ 1,000,000 | ||||||||||||||||||
Management Fee | Panther Creek Energy Services LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Related party transaction amount | $ 325,000 | $ 175,000 | $ 250,000 | ||||||||||||||||
Related party transaction, period | 12 months | ||||||||||||||||||
Management Fee | Scrubgrass Energy Services LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Related party transaction amount | $ 325,000 | $ 175,000 | $ 250,000 | ||||||||||||||||
Related party transaction, period | 12 months | ||||||||||||||||||
Mobilization Fee | Olympus Stronghold Services, LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Related party transaction amount | $ 150,000 | ||||||||||||||||||
Management Fee, Panther Creek Plant | Olympus Stronghold Services, LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Related party transaction amount | $ 500,000 | $ 1,000,000 | |||||||||||||||||
Reduction of expenses from transactions with related party | $ 500,000 | ||||||||||||||||||
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 | ||||||||||||||||||
Related Party | Waste Coal Agreement (the “WCA”) | Coal Valley Sales, LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Fuel expense | $ 195,161 | 278,208 | 495,161 | 581,708 | |||||||||||||||
Related Party | Fuel Service and Beneficial Use Agreement ("FBUA") | Northampton Fuel Supply Company, Inc. (“NFS”) | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Fuel expense | 324,925 | 1,304,752 | 2,406,726 | 2,225,864 | |||||||||||||||
Related Party | Fuel Management Agreement | Panther Creek Fuel Services LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Operations and maintenance expense | 2,093 | 353,879 | 929,942 | 1,204,938 | |||||||||||||||
Related Party | Fuel Management Agreement | Scrubgrass Fuel Services LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Operations and maintenance expense | 0 | 247,009 | 374,944 | 580,626 | |||||||||||||||
Related Party | Omnibus Services Agreement | Olympus Stronghold Services, LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Operations and maintenance expense | 133,499 | 392,761 | 603,563 | 1,189,452 | |||||||||||||||
Related Party | Operations and Maintenance Agreement | Panther Creek Energy Services LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Operations and maintenance expense | 10,337 | 886,569 | 1,856,501 | 2,911,738 | |||||||||||||||
Related Party | Operations and Maintenance Agreement | Scrubgrass Energy Services LLC | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Operations and maintenance expense | $ 0 | $ 2,099,306 | $ 2,269,290 | $ 4,749,432 | |||||||||||||||
Related Party | Independent Consulting Agreement | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Granted (in shares) | shares | 250,000 | ||||||||||||||||||
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 | $ 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, consideration received | $ 1,000,000 | ||||||||||||||||||
Chief Executive Officer | Private placement With Greg Beard, Co-Chairman And Chief Executive Officer | Pre-Funded Warrants | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Warrants issued during period (in shares) | shares | 100,000 |
RELATED-PARTY TRANSACTIONS - Am
RELATED-PARTY TRANSACTIONS - Amounts Due to Related Parties (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 451,367 | $ 1,375,049 |
Coal Valley Properties, LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 134,452 |
Q Power LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 20,119 | 500,000 |
Coal Valley Sales, LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 68,172 | 0 |
Panther Creek Energy Services LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 10,687 |
Panther Creek Fuel Services LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 53,482 |
Northampton Generating Fuel Supply Company, Inc. | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 363,076 | 594,039 |
Olympus Power LLC and other subsidiaries | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 78,302 |
Scrubgrass Energy Services LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 4,087 |
Scrubgrass Fuel Services LLC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 0 | $ 0 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Concentration Risk [Line Items] | |||||
Accounts receivable | $ 10,837,126 | $ 486,706 | $ 486,706 | ||
Change in value of accounts receivable within general and administrative expenses | (8,129,033) | $ (1,336,817) | |||
Customized Energy Solutions, Ltd | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | 5,100,000 | 5,100,000 | |||
PJM Interconnection, LLC | |||||
Concentration Risk [Line Items] | |||||
Change in value of accounts receivable within general and administrative expenses | $ (724,756) | $ (1,867,506) | |||
Revenue | Customized Energy Solutions, Ltd | Customer Concentration Risk | Energy Operations | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 100% | 100% | |||
Accounts receivable | Customized Energy Solutions, Ltd | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 100% | ||||
Purchased Coal | Related Party Concentration Risk | Two Related Parties | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 9% | 28% | 17% | 16% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) terahash in Millions | 3 Months Ended | ||||||||||
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 ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) miner | Sep. 30, 2023 USD ($) miner | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Number of miners | miner | 15,000 | ||||||||||
Remaining commitment balance | $ 68,887,550 | ||||||||||
Scrubgrass Generating Company, L.P. | McClymonds Supply & Transit Company, Inc. and DTA, L.P. vs. Scrubgrass Generating Company, L.P. | |||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Damages awarded | $ 5,000,000 | ||||||||||
Litigation settlement interest | $ 800,000 | ||||||||||
Pending Litigation | McClymonds Supply and Transit Company, Inc. | McClymonds Supply & Transit Company, Inc. and DTA, L.P. vs. Scrubgrass Generating Company, L.P. | |||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Damages sought | $ 5,042,350 | ||||||||||
Pending Litigation | Allegheny Mineral Corporation | Allegheny Mineral Corporation v. Scrubgrass Generating Company, L.P., Butler County Court of Common Pleas, No. AD 19-11039 | |||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Damages sought | $ 1,200,000 | ||||||||||
Pending Litigation | Scrubgrass Generating Company, L.P. | McClymonds Supply & Transit Company, Inc. and DTA, L.P. vs. Scrubgrass Generating Company, L.P. | |||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Damages sought | $ 6,747,328 | ||||||||||
Pending Litigation | Scrubgrass Generating Company, L.P. | Allegheny Mineral Corporation v. Scrubgrass Generating Company, L.P., Butler County Court of Common Pleas, No. AD 19-11039 | |||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Damages sought | $ 1,300,000 | ||||||||||
Settled Litigation | Scrubgrass Generating Company, L.P. | Allegheny Mineral Corporation v. Scrubgrass Generating Company, L.P., Butler County Court of Common Pleas, No. AD 19-11039 | |||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Damages awarded | $ 300,000 | ||||||||||
Miner Equipment, MinerVa, MinerVA | |||||||||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||||||||
Number of miners | miner | 15,000 | 15,000 | 15,000 | ||||||||
Total terahash delivered by miner (in terahash) | terahash | 1.5 | ||||||||||
Price per miner (in dollars per miner) | $ 4,892.5 | ||||||||||
Remaining commitment balance | $ 73,387,500 | $ 68,887,550 | |||||||||
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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Temporary Equity [Line Items] | ||
Number of votes | 1 | |
Q Power LLC | ||
Temporary Equity [Line Items] | ||
Ownership interest | 23.40% | 45.10% |
REDEEMABLE COMMON STOCK - Sched
REDEEMABLE COMMON STOCK - Schedule of Mezzanine Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Net loss attributable to noncontrolling interest | $ (5,188,727) | $ (44,000,155) | $ (26,663,731) | $ (86,435,347) |
Maximum redemption right valuation | 26,682,421 | |||
Retained Earnings | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Net loss attributable to noncontrolling interest | $ (5,188,727) | $ (42,203,141) | $ (26,663,731) | $ (82,905,233) |
Common Stock - Class V | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Beginning balance (in shares) | 2,605,760 | |||
Beginning balance | $ 11,754,587 | |||
Redemption of Class V shares (in shares) | (200,000) | |||
Redemption of Class V shares | $ (1,210,000) | |||
Maximum redemption right valuation | $ 26,682,421 | |||
Ending balance (in shares) | 2,405,760 | 2,405,760 | ||
Ending balance | $ 10,563,277 | $ 10,563,277 |
NONCONTROLLING INTERESTS - Narr
NONCONTROLLING INTERESTS - Narrative (Details) - Stronghold LLC - vote | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Noncontrolling Interest [Line Items] | ||
Number of votes | 1 | |
Q Power LLC | ||
Noncontrolling Interest [Line Items] | ||
Ownership interest | 23.40% | 45.10% |
NONCONTROLLING INTERESTS - Rede
NONCONTROLLING INTERESTS - Redeemable Common Stock Adjustments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Redeemable common stock, beginning balance | $ 11,754,587 | ||||
Net loss attributable to noncontrolling interest | $ (5,188,727) | $ (44,000,155) | (26,663,731) | $ (86,435,347) | |
Maximum redemption right valuation and adjustments | 26,682,421 | ||||
Redeemable common stock, ending balance | 10,563,277 | 10,563,277 | |||
Retained Earnings | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Net loss attributable to noncontrolling interest | $ (5,188,727) | $ (42,203,141) | $ (26,663,731) | $ (82,905,233) | |
Common Stock - Class V | |||||
Noncontrolling Interest [Line Items] | |||||
Common stock - Class V, outstanding (in shares) | 2,405,760 | 2,405,760 | 2,605,760 | ||
Fair valuation price (in USD per share) | $ 4.39 | $ 4.39 | $ 4.51 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Redeemable common stock, beginning balance | $ 11,754,587 | ||||
Redemption of Class V shares (in shares) | (200,000) | ||||
Redemption of Class V shares | $ (1,210,000) | ||||
Maximum redemption right valuation and adjustments | 26,682,421 | ||||
Redeemable common stock, ending balance | $ 10,563,277 | $ 10,563,277 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 15, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation expense | $ 787,811 | $ 3,377,499 | $ 7,603,859 | $ 9,123,124 | |
Stock compensation expense, tax benefit | $ 0 | ||||
Cancelled (in shares) | 98,669 | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 272,500 | ||||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cancelled (in shares) | 25,000 |
WARRANTS - Outstanding Warrants
WARRANTS - Outstanding Warrants (Details) | 9 Months Ended |
Sep. 30, 2023 shares | |
Class Of Warrant Or Right, Outstanding [Roll Forward] | |
Outstanding as of beginning of period (in shares) | 1,587,511 |
Issued (in shares) | 1,803,347 |
Exercised (in shares) | (1,610,580) |
Outstanding as of end of period (in shares) | 1,780,278 |
WARRANTS - Narrative (Details)
WARRANTS - Narrative (Details) - USD ($) | 9 Months Ended | ||||||||||
Apr. 20, 2023 | Sep. 19, 2022 | Aug. 16, 2022 | May 15, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | May 15, 2023 | Apr. 30, 2023 | Mar. 28, 2023 | Dec. 31, 2022 | Aug. 15, 2022 | |
Debt Instrument [Line Items] | |||||||||||
Warrants issued during period (in shares) | 631,800 | ||||||||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Warrant exercise price of warrants (in USD per share) | $ 25 | ||||||||||
Warrants exercised (in shares) | 1,610,580 | ||||||||||
Proceeds from private placements, net of issuance costs paid in cash | $ 27,000,000 | $ 9,824,567 | $ 8,599,440 | ||||||||
Warrants issued (in shares) | 1,803,347 | ||||||||||
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 | $ 10.10 | ||||||||
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 | $ 0.001 | |||||||||
Warrant purchase price (in USD per share) | $ 16 | ||||||||||
Pre-Funded Warrants | Armistice Capital Master Fund Ltd. | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants exercised (in shares) | 272,565 | ||||||||||
Pre-Funded Warrants | Institutional Investor | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants exercised (in shares) | 433,340 | ||||||||||
April 2023 Warrants | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrant exercise price of warrants (in USD per share) | $ 11 | ||||||||||
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 | ||||||||||
Note Warrant | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stock issued and sold during period (in shares) | 631,800 | ||||||||||
Share price (in USD per share) | $ 0.10 | $ 25 | |||||||||
Private Placement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants issued (in shares) | 230,000 | ||||||||||
Sale of stock (in USD per share) | $ 10 | ||||||||||
Sale of stock, consideration received | $ 10,000,000 | ||||||||||
Private Placement | Institutional Investor | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stock issued and sold during period (in shares) | 900,000 | ||||||||||
Sale of stock (in USD per share) | $ 10 | ||||||||||
Sale of stock, consideration received | $ 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) | $ 10 | ||||||||||
Sale of stock, consideration received | $ 1,000,000 | ||||||||||
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 | ||||||||||
Unsecured Convertible Promissory Notes | Unsecured Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt face amount | $ 11,250,000 | $ 33,750,000 | |||||||||
Interest rate | 10% | ||||||||||
$3,500,000 Promissory Note, with interest at 7.50%, due October 2025. | Loans payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants issued during period (in shares) | 300,000 | ||||||||||
Warrant exercise price of warrants (in USD per share) | $ 0.001 | ||||||||||
Warrants exercised (in shares) | 200,000 | ||||||||||
Debt face amount | $ 3,500,000 | $ 3,500,000 | |||||||||
Interest rate | 7.50% |
EQUITY ISSUANCES - Narrative (D
EQUITY ISSUANCES - Narrative (Details) | 9 Months Ended | |||||||||||||
May 23, 2023 USD ($) | Apr. 21, 2023 | Apr. 20, 2023 USD ($) $ / shares shares | Feb. 20, 2023 USD ($) $ / shares shares | Sep. 19, 2022 USD ($) $ / shares shares | Aug. 16, 2022 USD ($) day $ / shares shares | May 15, 2022 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | May 15, 2023 $ / shares | Apr. 30, 2023 $ / shares | Mar. 28, 2023 $ / shares | Dec. 31, 2022 $ / shares | Aug. 15, 2022 $ / shares | |
Debt Instrument [Line Items] | ||||||||||||||
Warrants issued during period (in shares) | shares | 631,800 | |||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | $ 25 | |||||||||||||
Proceeds from private placements, net of issuance costs paid in cash | $ | $ 27,000,000 | $ 9,824,567 | $ 8,599,440 | |||||||||||
Purchase agreement, discount percentage | 20% | |||||||||||||
Purchase agreement, consecutive trading days after payment (in days) | day | 20 | |||||||||||||
Issuance of Series C convertible preferred stock (in shares) | shares | 23,102 | |||||||||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Proceeds from ATM, net of issuance costs paid in cash | $ | $ 9,000,000 | $ 8,483,982 | $ 0 | |||||||||||
Preferred Stock | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Issuance of Series C convertible preferred stock (in shares) | shares | 23,102 | |||||||||||||
Conversion of Series C convertible preferred stock (in shares) | shares | (1,530) | (1,530) | ||||||||||||
Common Stock | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion of Series C convertible preferred stock (in shares) | shares | 382,500 | 382,500 | ||||||||||||
May 2022 Warrants | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrant exercise period | 5 years | |||||||||||||
September 2022 Warrants | ||||||||||||||
Debt Instrument [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 | |||||||||||
Warrant exercise period | 5 years 6 months | |||||||||||||
Pre-Funded Warrants | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrants issued during period (in shares) | shares | 272,565 | |||||||||||||
Warrant exercise price of warrants (in USD per share) | $ / shares | 0.001 | $ 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 | |||||||||||||
Warrant exercise period | 5 years 6 months | |||||||||||||
Period after issuance before warrants are exercisable | 6 months | |||||||||||||
April 2023 Warrants | Institutional Investor | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrants issued during period (in shares) | shares | 900,000 | |||||||||||||
April 2023 Warrants | Greg Beard | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrants issued during period (in shares) | shares | 100,000 | |||||||||||||
Note Warrant | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stock issued and sold during period (in shares) | shares | 631,800 | |||||||||||||
Share price (in USD per share) | $ / shares | $ 0.10 | $ 25 | ||||||||||||
Private Placement With Armistice Capital Master Fund Ltd. | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stock issued and sold during period (in shares) | 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) | shares | 60,241 | |||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 16.60 | |||||||||||||
Private Placement | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 10 | |||||||||||||
Sale of stock, consideration received | $ | $ 10,000,000 | |||||||||||||
Private Placement | Institutional Investor | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stock issued and sold during period (in shares) | shares | 900,000 | |||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 10 | |||||||||||||
Sale of stock, consideration received | $ | $ 9,000,000 | |||||||||||||
Private Placement | Greg Beard | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stock issued and sold during period (in shares) | shares | 100,000 | |||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 10 | |||||||||||||
Sale of stock, consideration received | $ | $ 1,000,000 | |||||||||||||
At-The-Market Offering Agreement | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stock issued and sold during period (in shares) | shares | 1,278,906 | |||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 6.96 | |||||||||||||
Sale of stock, consideration received | $ | $ 8,600,000 | |||||||||||||
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 | |||||||||||||
Sale of stock, number of shares, settled subsequent to sale date (in shares) | shares | 28,400 | |||||||||||||
Sale of stock, gross proceeds | $ | $ 8,900,000 | |||||||||||||
Sales commissions | $ | 300,000 | |||||||||||||
Deferred offering costs | $ | $ 376,124 | |||||||||||||
Unsecured Debt | Unsecured Convertible Promissory Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt face amount | $ | $ 11,250,000 | $ 33,750,000 | ||||||||||||
Interest rate | 10% | |||||||||||||
Conversion ratio, denominator (in USD per share) | $ / shares | $ 1,000 | |||||||||||||
Conversion price (in USD per share) | $ / shares | 4 | |||||||||||||
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) - Common Class A | Sep. 30, 2023 USD ($) |
September 2022 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected life (in years) | 4 years 6 months |
Fair value | $ 1,880,653 |
April 2023 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected life (in years) | 5 years 3 months |
Fair value | $ 3,553,767 |
Expected volatility | September 2022 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 1.297 |
Expected volatility | April 2023 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 1.297 |
Risk-free interest rate | September 2022 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.046 |
Risk-free interest rate | April 2023 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.046 |
Expected dividend yield | September 2022 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0 |
Expected dividend yield | April 2023 And Pre-Funded Warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT REPORTING - Results fro
SEGMENT REPORTING - Results from Operating Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
OPERATING REVENUES: | $ 17,726,957 | $ 26,366,649 | $ 53,226,913 | $ 85,488,242 |
NET OPERATING LOSS: | (19,704,936) | (39,179,557) | (49,900,580) | (107,648,860) |
OTHER EXPENSE | (2,606,977) | (36,040,813) | (30,764,024) | (40,116,500) |
NET LOSS | (22,311,913) | (75,220,370) | (80,664,604) | (147,765,360) |
DEPRECIATION AND AMORTIZATION: | (9,667,213) | (12,247,245) | (26,025,021) | (37,234,126) |
Interest expense | (2,441,139) | (3,393,067) | (7,428,530) | (10,813,302) |
Energy Operations | ||||
Segment Reporting Information [Line Items] | ||||
OPERATING REVENUES: | 1,252,688 | 13,989,675 | 6,266,851 | 34,490,491 |
NET OPERATING LOSS: | (9,685,721) | (16,086,915) | (29,864,794) | (39,862,217) |
DEPRECIATION AND AMORTIZATION: | (1,341,076) | (1,292,241) | (4,004,596) | (3,874,894) |
Interest expense | (39,007) | (15,864) | (450,472) | (71,933) |
Cryptocurrency Operations | ||||
Segment Reporting Information [Line Items] | ||||
OPERATING REVENUES: | 16,474,269 | 12,376,974 | 46,960,062 | 50,997,751 |
NET OPERATING LOSS: | (10,019,215) | (23,092,642) | (20,035,786) | (67,786,643) |
DEPRECIATION AND AMORTIZATION: | (8,326,137) | (10,955,004) | (22,020,425) | (33,359,232) |
Interest expense | $ (2,402,132) | $ (3,377,203) | $ (6,978,058) | $ (10,741,369) |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Earnings (Loss) per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net loss | $ (22,311,913) | $ (75,220,370) | $ (80,664,604) | $ (147,765,360) |
Net loss attributable to noncontrolling interest | (5,188,727) | (44,000,155) | (26,663,731) | (86,435,347) |
Net loss attributable to Stronghold Digital Mining, Inc. | $ (17,123,186) | $ (31,220,215) | $ (54,000,873) | $ (61,330,013) |
Denominator: | ||||
Weighted average number shares of Class A common shares outstanding (in shares) | 7,569,511 | 2,463,163 | 6,047,891 | 2,177,206 |
Earnings per share: | ||||
Basic net loss per share (in USD per share) | $ (2.26) | $ (12.67) | $ (8.93) | $ (28.17) |
Diluted net loss per share (in USD per share) | $ (2.26) | $ (12.67) | $ (8.93) | $ (28.17) |
EARNINGS (LOSS) PER SHARE - Nar
EARNINGS (LOSS) PER SHARE - Narrative (Details) - shares | Nov. 13, 2023 | Sep. 30, 2023 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,393,000 | |
Subsequent Event | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,392,854 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Apr. 01, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Tax receivable agreement, percentage | 85% | ||||
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 | |
Effective income tax rate | 0% | 0% | 0% | 0% |
SUPPLEMENTAL CASH AND NON-CAS_3
SUPPLEMENTAL CASH AND NON-CASH INFORMATION (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | ||
Income tax payments | $ 0 | $ 0 |
Interest payments | 7,054,387 | 7,346,038 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Equipment financed with debt | 1,184,935 | 60,256,322 |
McClymonds arbitration award - paid by Q Power | 0 | 5,038,122 |
Purchases of property, plant and equipment through finance leases | 60,679 | 0 |
Purchases of property, plant and equipment included in accounts payable or accrued liabilities | 145,093 | 4,197,350 |
Operating lease right-of-use assets exchanged for lease liabilities | 291,291 | 0 |
Reclassifications from deposits to property, plant and equipment | 4,658,970 | 54,207,076 |
Warrants – WhiteHawk | 0 | 1,150,000 |
Warrants – convertible note | 0 | 6,604,881 |
Warrants – April 2023 Private Placement | 8,882,914 | 0 |
Extinguishment of convertible note | 16,812,500 | 0 |
Extinguishment of accrued interest | 655,500 | 0 |
Issuance of Series C convertible preferred stock, net of issuance costs | 45,386,944 | 0 |
Warrants – B&M | 1,739,882 | 0 |
Return of transformers to settle outstanding payable | 6,007,500 | 0 |
Issuance of B&M Note | 3,500,000 | 0 |
Elimination of accounts payable | 11,426,720 | 0 |
Financed insurance premiums | 1,887,824 | 523,076 |
Class A common stock issued to settle outstanding payables or accrued liabilities | $ 1,014,780 | $ 0 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Details) - Bitcoin | Sep. 30, 2023 USD ($) bitcoin |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Crypto-asset, number of units | bitcoin | 24 |
Crypto-asset fair value | $ | $ 654,314 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | Nov. 13, 2023 day $ / shares shares | Oct. 13, 2023 USD ($) shares | Sep. 30, 2023 $ / shares | Dec. 31, 2022 $ / shares |
Subsequent Event [Line Items] | ||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Monthly service fee | $ | $ 410 | |||
Managed services agreement, term | 3 years | |||
Managed service agreement, number of shares on each three month anniversary, maximum (in shares) | 10,000 | |||
Managed service agreement, number of shares on each three month anniversary, minimum (in shares) | 0 | |||
Percent of accretion from transaction | 6.50% | |||
Period from Exchange Transaction to file resale registration statement | day | 15 | |||
Subsequent Event | Common Class A | ||||
Subsequent Event [Line Items] | ||||
Managed services agreement, maximum number of shares (in shares) | 120,000 | |||
Subsequent Event | Series D Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Conversion of preferred stock (in shares) | 15,582 | |||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | |||
Subsequent Event | Series C Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Number of shares converted (in shares) | 15,582 |