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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number: 001-40931
Stronghold Digital Mining, Inc.
(Exact name of registrant as specified in its charter)
Delaware86-2759890
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
595 Madison Avenue, 28th Floor
                           New York, New York
10022
(Address of principal executive offices)(Zip Code)
(212) 967-5294
(Registrant's telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stockSDIGThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

APPLICABLE ONLY TO CORPORATE ISSUERS:
The registrant had outstanding 20,096,481 shares of Class A common stock, par value $0.0001 per share, and 28,209,600 shares of Class V common stock, par value $0.0001 per share, as of August 12, 2022.
Table of Contents




Part I - Financial Information
Item 1. Financial Statements
STRONGHOLD DIGITAL MINING, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2022December 31, 2021
(unaudited)
CURRENT ASSETS
Cash$32,987,181 $31,790,115 
Digital currencies352,092 7,718,221 
Digital currencies restricted4,779,895 2,699,644 
Accounts receivable1,851,719 2,111,855 
Due from related party848,150  
Prepaid insurance2,356,411 6,301,701 
Inventory3,605,533 3,372,254 
Other current assets1,733,907 661,640 
Total Current Assets48,514,888 54,655,430 
EQUIPMENT DEPOSITS66,472,016 130,999,398 
PROPERTY, PLANT AND EQUIPMENT, NET237,973,955 166,657,155 
LAND1,748,439 1,748,440 
ROAD BOND211,958 211,958 
SECURITY DEPOSITS348,888 348,888 
TOTAL ASSETS$355,270,144 $354,621,269 
CURRENT LIABILITIES
Current portion of long-term debt-net of discounts/issuance fees$100,593,168 $45,799,651 
Financed insurance premiums393,260 4,299,721 
Forward sale contract4,650,848 7,116,488 
Accounts payable23,887,308 28,650,659 
Due to related parties1,974,299 1,430,660 
Accrued liabilities12,920,128 5,053,957 
Total Current Liabilities144,419,011 92,351,136 
LONG-TERM LIABILITIES
Asset retirement obligation986,115 973,948 
Contract liabilities132,093 187,835 
Paycheck Protection Program Loan 841,670 
Long-term debt-net of discounts/issuance fees26,889,570 18,378,841 
Total Long-Term Liabilities28,007,778 20,382,294 
Total Liabilities172,426,789 112,733,430 
COMMITMENTS AND CONTINGENCIES
REDEEMABLE COMMON STOCK
Common Stock - Class V, $0.0001 par value; 34,560,000 shares authorized, and 27,057,600 and 27,057,600 shares issued and outstanding, respectively
47,239,903 301,052,617 
Total redeemable common stock47,239,903 301,052,617 
STOCKHOLDERS’ EQUITY / (DEFICIT)
Non-controlling Series A redeemable and convertible preferred stock, $0.0001 par value, aggregate liquidation value $5,000,000. 1,152,000 and 1,152,000 issued and outstanding, respectively
35,937,061 37,670,161 
Common Stock – Class A, $0.0001 par value; 685,440,000 shares authorized, and 20,034,875 and 20,016,067 shares issued and outstanding, respectively
2,002 2,002 
Accumulated deficits(155,708,865)(338,709,688)
Additional paid-in capital255,373,254 241,872,747 
Stockholders’ equity / (deficit)135,603,452 (59,164,778)
Total182,843,355 241,887,839 
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY / (DEFICIT)$355,270,144 $354,621,269 
The accompanying notes are an integral part of these condensed consolidated financial statements
2


STRONGHOLD DIGITAL MINING, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended,Six months ended,
ConsolidatedConsolidatedConsolidatedConsolidated
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(unaudited)(unaudited)(unaudited)(unaudited)
OPERATING REVENUES
Cryptocurrency mining$20,227,536 $1,324,645 $38,431,729 $1,840,903 
Energy7,129,732 1,570,966 15,492,533 3,486,822 
Capacity1,668,001 595,545 3,712,428 1,283,236 
Cryptocurrency hosting121,172 686,771 189,048 1,242,518 
Other32,008 6,597 52,770 33,123 
Total operating revenues29,178,449 4,184,524 57,878,508 7,886,602 
OPERATING EXPENSES
Fuel8,680,114 2,228,167 18,018,508 4,100,521 
Operations and maintenance16,586,756 1,834,170 27,921,089 3,204,858 
General and administrative10,903,876 1,996,971 21,514,079 2,907,847 
Impairments on digital currencies5,205,045 375,246 7,711,217 375,246 
Impairments on equipment deposits  12,228,742  
Impairments on miner assets4,990,000  4,990,000  
Depreciation and amortization12,667,300 787,731 24,986,881 1,305,174 
Total operating expenses59,033,091 7,222,285 117,370,516 11,893,646 
NET OPERATING LOSS(29,854,642)(3,037,761)(59,492,008)(4,007,044)
OTHER INCOME (EXPENSE)
Interest expense(4,508,783)(55,443)(7,420,235)(134,083)
Gain on extinguishment of PPP loan841,670  841,670 638,800 
Realized gain (loss) on sale of digital currencies 5,977 751,110 149,858 
Changes in fair value of warrant liabilities (191,477) (191,477)
Realized gain (loss) on disposal of fixed asset(1,724,642) (1,769,600) 
Realized gain (loss) on sale of miner assets(8,012,248) (8,012,248) 
Changes in fair value of forward sale derivative3,919,388  3,435,639  
Changes in fair value of convertible note(962,761) (962,761) 
Waste coal credits53,443 15,406 53,443 23,796 
Other10,000 20,290 30,000 38,185 
Total other income / (expense)(10,383,933)(205,248)(13,052,982)525,079 
NET LOSS$(40,238,575)$(3,243,009)$(72,544,990)$(3,481,965)
NET LOSS - attributable to non-controlling interest$(23,537,555)$(2,235,218)$(42,435,192)$(2,402,488)
NET LOSS - Stronghold Digital Mining, Inc$(16,701,021)$(1,007,791)$(30,109,798)$(1,079,477)
NET LOSS attributable to Class A Common Shares(1)
Basic$(0.82)$(123.86)$(1.49)$(123.86)
Diluted$(0.82)$(123.86)$(1.49)$(123.86)
Class A Common Shares Outstanding(1)
Basic20,341,061 8,137 20,274,672 8,137 
Diluted20,341,061 8,137 20,274,672 8,137 
_______________
1 - Basic and diluted loss per share of Class A common stock is presented only for the period after the Company’s Reorganization Transactions. See Note 1 – Business Combinations for a description of the Reorganization Transactions. See Note 17 – Earnings (Loss) Per Share for the calculation of loss per share.
The accompanying notes are an integral part of these condensed consolidated financial statements
3


STRONGHOLD DIGITAL MINING, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ DEFICIT AND STOCKHOLDERS’ EQUITY / (DEFICIT)
June 30, 2022 and June 30, 2021
Three Months Ended June 30, 2022
Non-controlling Redeemable PreferredCommon A
Limited
Partners
General
Partners
Series A
Shares
AmountSharesAmount
Accumulated
Deficit
Additional Paid-in
Capital
Stockholders’
Equity / (Deficit)
Balance – April 1, 2022$ $ 1,152,000 $36,898,361 20,020,877 $2,002 $(241,895,906)$245,615,742 $40,620,199 
Net losses Stronghold Digital Mining Inc.— — — — — — (16,701,021)— (16,701,021)
Net losses attributable to non-controlling interest— — — (961,300)— — (22,576,255)— (23,537,555)
Maximum redemption right valuation [Common V Units]— — — — — — 125,464,317 — 125,464,317 
Vesting of restricted stock units— — — — 13,998 — — — — — 
Warrants Issued and Outstanding— — — — — — — 6,604,881 6,604,881 
Stock-based compensation - refer to Note 13
— — — — — — — 3,152,630 3,152,630 
Balance – June 30, 2022$ $ 1,152,000 $35,937,061 20,034,875 $2,002 $(155,708,865)$255,373,254 $135,603,452 
Three Months Ended June 30, 2021
Redeemable PreferredCommon A
Limited
Partners
General
Partners
Series A
Shares
Amount
Common A
Shares
Amount
Accumulated
Deficit
Additional
Paid-in
Capital
Stock Subscriptions
Partners'
Deficit
Balance – April 1, 2021$(1,408,471)$(2,877,584)— $— — $— $— $— $— $(4,286,055)
Opco formation and contributions— 2,877,584 — — — — — — — 2,877,584 
Aspen Scrubgrass Participant, LLC ["Olympus"] contribution1,408,471 — — — — — (1,408,471)— —  
Buyout of Aspen Interest- refer to Note 19
— — 200,000 200 — — (7,000,000)4,999,800 — (2,000,000)
Exchange of common units for Class A common shares— — — — 5,000 1 — — — 1 
Common stock issued as part of debt financing- refer to Note 14
— — — — 18,886 2 — 598,686 (598,686)2 
Common stock issued as part of debt financing- refer to Note 14
— — — — 24,959 2 — 791,201 (791,201)2 
Warrants issued as part of debt financing - refer to Note 14
— — — — — — — 1,999,396 — 1,999,396 
Net losses for the three months ended June 30, 2021— — — — — — (1,007,791)— — (1,007,791)
Maximum redemption right valuation - refer to Note 15
— — — — — — (172,774,051)— — (172,774,051)
Stock-based compensation - refer to Note 13
— — — — — — — 269,932 — 269,932 
Balance – June 30, 2021$ $ 200,000 $200 48,845 $5 $(182,190,313)$8,659,015 $(1,389,887)$(174,920,980)




The accompanying notes are an integral part of these condensed consolidated financial statements
4


STRONGHOLD DIGITAL MINING, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ DEFICIT AND STOCKHOLDERS’ EQUITY / (DEFICIT)
June 30, 2022 and June 30, 2021
Six Months Ended June 30, 2022
Non-controlling Redeemable PreferredCommon A
Limited
Partners
General
Partners
Series A
Shares
AmountSharesAmount
Accumulated
Deficit
Additional Paid-in
Capital
Stockholders’
Equity / (Deficit)
Balance – January 1, 2022$ $ 1,152,000 $37,670,161 20,016,067 $2,002 $(338,709,688)$241,872,747 $(59,164,778)
Net losses Stronghold Digital Mining Inc.— — — — — — (30,109,798)— (30,109,798)
Net losses attributable to non-controlling interest— — — (1,733,100)— — (40,702,092)— (42,435,192)
Maximum redemption right valuation [Common V Units]— — — — — — 253,812,714 — 253,812,714 
Vesting of restricted stock units— — — — 18,808 — — — — 
Warrants Issued and Outstanding— — — — — — — 7,754,881 7,754,881 
Stock-based compensation - refer to Note 13
— — — — — — — 5,745,625 5,745,625 
Balance – June 30, 2022$ $ 1,152,000 $35,937,061 20,034,875 $2,002 $(155,708,865)$255,373,254 $135,603,452 
Six Months Ended June 30, 2021
Redeemable PreferredCommon APartners’ Deficit
Limited
Partners
General
Partners
Series A
Shares
Amount
Common A
Shares
Amount
Accumulated
Deficit
Additional
Paid-in
Capital
Stock
Subscriptions
Stockholders’
Equity / (Deficit)
Balance – January 1, 2021$(1,336,784)$(2,710,323)— $— — $— $— $— $— $(4,047,107)
Net losses(71,687)(167,261)— — — — — — (238,948)
Effect of reorganizations (see Note 1)
Opco formation and contributions— 2,877,584 — — — — — — — 2,877,584 
Aspen Scrubgrass Participant, LLC ["Olympus"] contribution1,408,471 — — — — — (1,408,471)— —  
Buyout of Aspen Interest- refer to Note 19— — 200,000 200 — — (7,000,000)4,999,800 — (2,000,000)
Exchange of common units for Class A common shares— — — — 5,000 1 — — — 1 
Common stock issued as part of debt financing- refer to Note 14
— — — — 18,886 2 — 598,686 (598,686)2 
Common stock issued as part of debt financing- refer to Note 14
— — — — 24,959 2 — 791,201 (791,201)2 
Warrants issued as part of debt financing - refer to Note 14
— — — — — — — 1,999,396 — 1,999,396 
Net losses for the three months ended June 30, 2021— — — — — — (1,007,791)— — (1,007,791)
Maximum redemption right valuation - refer to Note 15
— — — — — — (172,774,051)— — (172,774,051)
Stock-based compensation - refer to Note 13
— — — — — — — 269,932 — 269,932 
Balance – June 30, 2021$ $ 200,000 $200 48,845 $5 $(182,190,313)$8,659,015 $(1,389,887)$(174,920,980)




The accompanying notes are an integral part of these condensed consolidated financial statements
5


STRONGHOLD DIGITAL MINING, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended,
June 30, 2022June 30, 2021
(unaudited)(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss$(72,544,990)$(3,481,965)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and Amortization - PP&E24,986,881 1,305,174 
Forgiveness of PPP loan(841,670)(638,800)
Realized (gain) loss on disposal of fixed assets1,769,600  
Realized (gain) loss on sale of equipment deposits8,012,248  
Amortization of debt issuance costs2,060,806  
Stock Compensation5,745,625 269,932 
Impairments on equipment deposits12,228,742  
Impairment on miner assets4,990,000  
Changes in fair value of warrant liabilities 191,477 
Changes in fair value of forward sale derivative(3,435,639) 
Forward sale contract prepayment970,000  
Changes in fair value of convertible note962,761  
Accretion of asset retirement obligation12,169  
(Increase) decrease in Digital Currencies:
Mining Revenue(38,431,729)(1,840,903)
Proceeds from sales of digital currencies, net of gain36,006,390 434,529 
Impairments on digital currencies7,711,217 375,246 
(Increase) decrease in assets:
Accounts receivable260,136 (710,720)
Prepaid Insurance3,945,290  
Due from related party(848,150)302,973 
Inventory(233,279)77,071 
Other current assets(1,072,267)(134,790)
Increase (decrease) in liabilities:
Accounts payable(4,763,351)5,550,196 
Due to related parties543,639 319,071 
Accrued liabilities excluding sales tax liabilities4,393,075 58,866 
Contract liabilities(55,742)147,841 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES(7,628,238)2,225,198 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land (29,919)
Purchase of property, plant and equipment(57,074,647)(12,738,793)
Proceeds from the sale of equipment deposits13,844,780  
Equipment purchase deposits- net of future commitments(12,073,928)(78,688,465)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES(55,303,795)(91,457,176)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt(24,022,738)(188,168)
Payments on financed insurance premiums(3,906,462) 
Proceeds from debt, net of debt issuance costs paid in cash92,058,299  
Proceeds from promissory note 39,100,000 
Proceeds from PPP loan 841,670 
Proceeds from private placements- mezzanine equity (net of fees) 97,064,318 
Proceeds/(Payoff) of EIDL loan (150,000)
Payoff of related-party notes (2,024,250)
Buyout of Aspen Interest (2,000,000)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES64,129,099 132,643,570 
NET INCREASE (DECREASE) IN CASH1,197,066 43,411,592 
CASH - BEGINNING OF PERIOD31,790,115 303,187 
CASH - END OF PERIOD$32,987,181