Stronghold Announces Fourth Quarter 2022 Operations and Financial Update and Provides Updates on Key Business Initiatives

NEW YORK, March 22, 2023 (GLOBE NEWSWIRE) -- Stronghold Digital Mining, Inc. (NASDAQ: SDIG) (“Stronghold”, or the “Company”) provided the following updates regarding its operations and financial performance:

Fourth Quarter 2022 Financial Performance

Stronghold generated an estimated $23 million of revenue, an estimated $48 million of net loss, and an estimated $5 million of adjusted EBITDA (see reconciliation of non-GAAP financial measures) during the fourth quarter of 2022. Revenue comprised an estimated $14 million from the sale of energy, an estimated $8 million from cryptocurrency mining, and an estimated $1 million from capacity sales during the quarter. The period featured two extremes: record high PJM power prices in December and record low Bitcoin hash price in November. The Company believes that Stronghold’s vertically integrated business model, combining power generation and Bitcoin mining, demonstrated its value and flexibility when the Company curtailed its Bitcoin mining operations fully in order to deliver power to the PJM Interconnection LLC (“PJM”) grid during the PJM emergency declaration from December 23, 2022 through December 25, 2022. Stronghold remains committed to supporting the PJM grid, which the Company believes is also aligned with maximizing shareholder value.

Cost of Power

In the fourth quarter of 2022 and early 2023, Stronghold began to realize the benefits of the investments that were made at the Company’s wholly owned power generation facilities located (i) in Scrubgrass Township, Venango County, Pennsylvania (the “Scrubgrass Plant”) and (ii) near Nesquehoning, Pennsylvania (the “Panther Creek Plant”). The Company continues to believe that it will achieve a “net cost of power” of $45-50 per megawatt hour in the first quarter of 2023.

Sales of Beneficial Use Ash

In 2022, Stronghold realized a benefit of approximately $300,000 from selling its beneficial use ash, a byproduct of the Company’s coal-refuse-to-energy process, primarily from the Panther Creek Plant. This benefit comprises revenue and avoided disposal costs. The Company now expects to grow its ash sale business and realize a benefit of at least $1 million during 2023, which the Company believes will be incrementally beneficial to the Company’s efforts to reduce its net cost of power.