liabilities:
Accounts payable (643,132) (1,445,109)
Due to related parties 730,357 (239,230)
Accrued liabilities (543,442) 875,203
Other liabilities,
including contract
liabilities 7,888,095 (211,225)
--------------- ---------------
NET CASH FLOWS PROVIDED BY
(USED IN) OPERATING
ACTIVITIES 8,548,842 (3,288,433)
--------------- ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property,
plant and equipment (749,528) (14,743,269)
Proceeds from sale of
property, plant and
equipment, including CIP 221,212 --
--------------- ---------------
NET CASH FLOWS USED IN
INVESTING ACTIVITIES (528,316) (14,743,269)
--------------- ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments of debt (3,668,304) (3,196,644)
Repayments of financed
insurance premiums (4,075,388) (5,250,538)
Proceeds from debt, net of
issuance costs paid in
cash -- (147,385)
Proceeds from private
placements, net of
issuance costs paid in
cash -- 9,824,567
Proceeds from ATM, net of
issuance costs paid in
cash -- 8,483,982
Proceeds from exercise of
warrants -- 316
--------------- ---------------
NET CASH FLOWS (USED IN)
PROVIDED BY FINANCING
ACTIVITIES (7,743,692) 9,714,298
--------------- ---------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 276,834 (8,317,404)
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 4,214,613 13,296,703
--------------- ---------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 4,491,447 $ 4,979,299
=============== ===============
Use and Reconciliation of Non-GAAP Financial Measures
This press release and our related earnings call contain certain non-GAAP financial measures, including Adjusted EBITDA, as a measure of our operating performance. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization, further adjusted by the removal of one-time transaction costs, non-recurring expenses, realized gains and losses on the sale of long-term assets, expenses related to stock-based compensation, gains or losses on extinguishment of debt, or changes in the fair value of warrant liabilities in the period presented. See reconciliation below.
Our board of directors and management team use Adjusted EBITDA to assess our financial performance because they believe it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense and income), asset base (such as depreciation, amortization, impairments, and realized gains and losses on the sale of long-term assets) and other items (such as one-time transaction costs, expenses related to stock-based compensation, and gains and losses on derivative contracts) that impact the comparability of financial results from period to period. We present Adjusted EBITDA because we believe it provides useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP. Adjusted EBITDA is not a financial measure presented in accordance with GAAP. We believe that the presentation of this non-GAAP financial measure will provide useful information to investors and analysts in assessing our financial performance and results of operations across reporting periods by excluding items we do not believe are indicative of our core operating performance. Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA. Our non-GAAP financial measure should not be considered as an alternative to the most directly comparable GAAP financial measure. You are encouraged to evaluate each of these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of Adjusted EBITDA should be read in conjunction with the financial statements furnished in our Form 10-Q for the third quarter ended September 30, 2024, expected to be filed on or around November 13, 2024. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
STRONGHOLD DIGITAL MINING, INC.
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA
Three Months Ended Nine Months Ended
-------------------------- --------------------------
September September September September
(in thousands) 30, 2024 30, 2023 30, 2024 30, 2023
------------------- ------------ ------------ ------------ ------------
Net Loss--GAAP $(22,671) $(22,312) $(38,095) $(80,665)
Plus:
Interest
expense 2,237 2,441 6,748 7,429
Depreciation
and
amortization 8,624 9,667 27,429 26,025
Loss on debt
extinguishment -- -- -- 28,961
Impairments on
equipment
deposits -- 5,422 -- 5,422
Non-recurring
expenses (1) 928 1,216 7,384 1,853
Stock-based
compensation 1,486 788 5,093 7,604
Loss on
disposal of
fixed assets 458 -- 2,189 108
Realized loss
on sale of
miner assets 530 -- 494 --
Changes in fair
value of
warrant
liabilities 2,850 181 (8,445) (5,580)
Accretion of
asset
retirement
obligation 14 13 41 39
------------------- ------- ------- ------- -------
Adjusted
EBITDA--Non-GAAP
(2) $ (5,544) $ (2,583) $ 2,838 $ (8,804)
=================== ======= ======= ======= =======
(1) Includes the following non-recurring expenses: estimated accrual for two loss contingencies, one-time legal fees, and other one-time items.
(2) As previously disclosed, the Company adopted ASU 2023-08 effective January 1, 2024, using a modified retrospective transition method, with a cumulative-effect adjustment of approximately $0.1 million recorded to the opening balance of retained earnings. In conjunction with this accounting change and following consultation with the SEC, realized gains/losses on sale of digital currencies and unrealized gains/losses on digital currencies will no longer be excluded in the Company's determination of Adjusted EBITDA. Furthermore, the Company revised its Adjusted EBITDA for the three and nine months ended September 30, 2023, to remove adjustments for impairments on digital currencies and realized gain on sale of digital currencies.
Investor Contact:
Matt Glover
Gateway Group, Inc.
SDIG@gateway-grp.com
1-949-574-3860
Media Contact:
contact@strongholddigitalmining.com
(END) Dow Jones Newswires
November 13, 2024 08:00 ET (13:00 GMT)
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