Stronghold Digital Mining Inc (SDIG) 2024 Q3 法說會逐字稿

Good morning and welcome to the Stronghold Digital Mining conference call for the third quarter ended September 30th 2024. My name is Tanya and I'll be your operator this morning before this call. Stronghold issued its results for the third quarter, 2024 in a press release which is available in the investors section of the company's website at www.strongholddigitalmining.com. You can find the link in the investor section at the top of the home page.

早安，歡迎參加 Stronghold Digital Mining 截至 2024 年 9 月 30 日的第三季電話會議。我叫 Tanya，今天早上通話前我將擔任您的接線生。Stronghold 已發布其 2024 年第三季業績，新聞稿可在公司網站 www.strongholddigitalmining.com 的投資者專區查看。您可以在主頁頂部的投資者專區找到相關連結。

Joining us today on the call are Stronghold's, Chairman and CEO, Gregory A. Beard and CFO, Matthew J. Smith.

今天參加電話會議的有 Stronghold 董事長兼執行長 Gregory A. Beard 和財務長 Matthew J. Smith。

(Operator Instructions)

（操作員指示）

Now, I would like to turn the call over to Strongholds Chairman and CEO, Gregory A. Beard. Mr. Beard, you may proceed.

現在，我想將電話轉給 Strongholds 董事長兼執行長 Gregory A. Beard。比爾德先生，您可以繼續了。

Good morning everyone and thank you for joining our third quarter, 2024 call given our pending merger with Bitfarms which we announced on August 21st. Today's update will be relatively brief to recap. We're thrilled about this transformative next step for Stronghold, a definitive merger agreement with Bitfarms, a global leader in Bitcoin mining. After a thorough strategic alternatives review process, we are confident that partnering with Bitfarms offers the optimal platform to realize the full potential of our assets, accelerate growth and build value for the company and its shareholders. The transaction could result in a pro former company with an energy portfolio exceeding 950 megawatts by year end 2025, and there are multiple studies underway related to the Stronghold assets that have the potential to add significant capacity incrementally.

大家早安，感謝您參加我們 2024 年第三季的電話會議，因為我們在 8 月 21 日宣布了與 Bitfarms 的合併。今天的更新將相對簡短地回顧一下。我們對 Stronghold 的這項變革性舉措感到非常興奮，這是與比特幣挖礦全球領導者 Bitfarms 達成的最終合併協議。經過徹底的策略替代方案審查過程後，我們相信與 Bitfarms 合作將提供最佳平台，以充分發揮我們資產的潛力、加速成長並為公司及其股東創造價值。此次交易可能使專業公司在 2025 年底前擁有超過 950 兆瓦的能源組合，目前有多項與 Stronghold 資產相關的研究正在進行中，這些研究有可能逐步增加大量產能。

We believe this growth pipeline combined with the opportunity to leverage bitfarms proven expertise to successfully enhance operational efficiency and merge HPC AI with Bitcoin mining operations is a recipe for success.

我們相信，這個成長管道加上利用 bitfarm 經過驗證的專業知識來成功提高營運效率以及將 HPC AI 與比特幣挖礦業務相結合的機會是成功的秘訣。

The transaction is structured as a stock for stock merger, whereby Stronghold shareholders will receive 2.52 Bitfarms shares for each Stronghold share, which at the time of the announcement valued Stronghold equity at approximately $125 million plus $50 million in debt to be paid at close. Upon closing, Stronghold shareholders will hold around 10% of the combined company positioning them to benefit directly from the growth potential of this expanded platform.

此交易採用股票對股票合併的形式，Stronghold 股東將以每股 Stronghold 股票換取 2.52 股 Bitfarms 股票，公告發佈時 Stronghold 股權價值約為 1.25 億美元，外加 5000 萬美元的債務，交易完成後將支付。交易完成後，Stronghold 股東將持有合併後公司約 10% 的股份，從而可以直接受益於該擴展平台的成長潛力。

Together we'll leverage the unique capabilities of the Scrubgrass and Panther Creek facilities in Pennsylvania to deliver low cost power, support the local grid and improve the environment through the conversion of mining waste into energy, advancing our commitment to sustainability. Additionally, we believe that the platform will better position the facilities to integrate high performance computing, diversifying the business beyond Bitcoin Mining.

我們將共同利用賓州 Scrubgrass 和 Panther Creek 設施的獨特能力，提供低成本電力，支持當地電網，並透過將採礦廢棄物轉化為能源來改善環境，推進我們對永續發展的承諾。此外，我們相信該平台將更好地定位設施以整合高效能運算，使業務多元化，超越比特幣挖礦。

In addition to the merger, we recently strengthened our Bitcoin mining operations through two hosting agreements with Bitfarms, which will high grade the fleet at our facilities. On September 12th, we entered into an agreement to host 10,000 Bitmain T21 Bitcoin miners at Panther Creek. We received some of these miners with the remainder expected in November and December of this year. Bitfarms will pay us a monthly fee of 50% of profit generated by the miners subject to certain adjustments to account for upfront payments made by Bitfarms taxes and the net cost of power associated with the operation of the miners. Building on this on October 29th, we entered a second hosting agreement to host an additional 10,000 minors at Scrubgrass at the same economic terms. Minor deliveries are expected to begin in late December or early January.

除了合併之外，我們最近還透過與 Bitfarms 達成的兩項託管協議加強了我們的比特幣挖礦業務，這將對我們設施中的礦機群進行高級評估。9 月 12 日，我們達成協議，在 Panther Creek 託管 10,000 台 Bitmain T21 比特幣礦機。我們接收了部分礦工，剩餘的礦工預計將於今年 11 月和 12 月抵達。Bitfarms 將每月向我們支付礦工所產生利潤的 50% 作為費用，但需進行某些調整，以計入 Bitfarms 稅收的預付款以及與礦工運營相關的電力淨成本。在此基礎上，我們於 10 月 29 日簽署了第二份接收協議，以相同的經濟條件在 Scrubgrass 接收另外 10,000 名未成年人。預計小批量交貨將於 12 月底或 1 月初開始。

Before I hand over the call, I want to address a recent leadership transition. Our CFO Matt Smith will be stepping down effective November 15th, following the filing of our third quarter report. Matt was instrumental in navigating through a difficult time for the business and ultimately to an attractive merger with Bitfarms. His efforts and success in raising capital establishing operational procedures and enhancing how the company tracks and uses data have been critical. We're grateful for Matt's contributions to Stronghold over the past three years, and we look forward to working with him in a consulting role to ensure a smooth transition. With that, I'll turn it over to Matt.

在交接電話之前，我想先談談最近的領導層變動。我們的財務長 Matt Smith 將於 11 月 15 日（即我們提交第三季報告後）卸任。馬特在幫助公司度過困難時期並最終與 Bitfarms 達成有吸引力的合併方面發揮了重要作用。他在籌集資金、建立營運程序以及增強公司追蹤和使用數據的方式方面的努力和成功至關重要。我們感謝 Matt 在過去三年對 Stronghold 的貢獻，並期待與他一起擔任顧問，確保順利過渡。說完這些，我就把麥克風交給馬特。

Thank you, Greg. It's truly been a pleasure working with you and the rest of the Stronghold team.

謝謝你，格雷格。與您以及 Stronghold 團隊的其他成員一起工作真的很愉快。

For our Bitcoin mining operations, during the third quarter of 2024 we generated 188 Bitcoin and an additional $0.5 million in energy revenue equivalent to approximately 8 Bitcoins at the average price.

對於我們的比特幣挖礦業務，在 2024 年第三季度，我們產生了 188 個比特幣，並額外產生了 50 萬美元的能源收入，按平均價格計算相當於約 8 個比特幣。

This brought our total production to the equivalent of 196 Bitcoins for the quarter, representing a decrease of about 35%. When compared to the second quarter of 2024. This decline was primarily driven by the Bitcoin halving on April 19th, which reduced the block reward from 6.25 Bitcoins to 3.125 Bitcoin. While this halving impacted production, we continue adapting our strategy to optimize mining and energy revenue in this evolving environment revenue. For the third quarter of 2024 total, $11.2 million, down 42% sequentially and 37% year over year. This revenue included a $10.6 million of Cryptocurrency operations and $0.5 million from energy sales. On the profitability side, our GAAP net loss for the third quarter was $22.7 million with a non-GAAP adjusted EBITDA loss of $5.5 million.

這使得我們本季的總產量相當於 196 比特幣，下降了約 35%。與 2024 年第二季相比。這種下降主要是由於 4 月 19 日比特幣減半所致，區塊獎勵從 6.25 比特幣減少到 3.125 比特幣。雖然減半影響了產量，但我們仍將繼續調整策略，以在不斷變化的環境中優化採礦和能源收入。2024 年第三季總額為 1,120 萬美元，季減 42%，年減 37%。該收入包括 1,060 萬美元的加密貨幣營運收入和 50 萬美元的能源銷售收入。在獲利方面，我們第三季的 GAAP 淨虧損為 2,270 萬美元，非 GAAP 調整後 EBITDA 虧損為 550 萬美元。

You'll find a detailed reconciliation of these figures in our earnings release.

您可以在我們的收益報告中找到這些數字的詳細對帳。

Turning to our balance sheet as of September 30th of 2024 and November 8th of 2024 we held approximately $5.1 million and $6.7 million respectively in cash and cash equivalents including 10 Bitcoins as of September 30th and 4 Bitcoins as of November 8th. Stronghold also has $2.6 million in contracted receivables expected within the next 30 days from the sale of our 2023 wasteful tax credits.

回顧我們截至 2024 年 9 月 30 日和 2024 年 11 月 8 日的資產負債表，我們分別持有約 510 萬美元和 670 萬美元的現金和現金等價物，其中包括截至 9 月 30 日的 10 個比特幣和截至 11 月 8 日的 4 個比特幣。Stronghold 也預計在出售 2023 年浪費稅收抵免後的未來 30 天內將獲得 260 萬美元的合約應收帳款。

Our principal outstanding indebtedness was approximately $53.7 million as of the end of the third quarter.

截至第三季末，我們的未償債務本金約為 5,370 萬美元。

And we also have approximately $3.4 million remaining under our ATM as of November 8th, 2024 with no shares sold under the ATM during this year.

截至 2024 年 11 月 8 日，我們的 ATM 下還剩餘約 340 萬美元，並且今年沒有在 ATM 下出售任何股票。

That concludes my remarks. Thank you again, Greg and team, experience. I greatly appreciate it back to you Greg.

我的發言到此結束。再次感謝 Greg 和團隊，感謝你們的經驗。我非常感謝你，格雷格。

All right. Thank you Matt and thank you all for joining us today. As we look ahead, we are excited about the opportunities our merger with Bifarms will bring and the strategic initiatives we have underway to expand our capacity, enhance operational efficiency and strengthen our commitment to sustainability. We remain focused on creating long term value for our shareholders and positioning Stronghold as a leader in the evolving digital infrastructure space. We appreciate your continued support and look forward to updating you on our progress. Thank you again for joining have a great day. Operator.

好的。謝謝馬特，也謝謝大家今天的到來。展望未來，我們對與 Bifarms 合併帶來的機會以及我們正在進行的擴大產能、提高營運效率和加強對永續發展的承諾的戰略舉措感到興奮。我們始終致力於為股東創造長期價值，並將 Stronghold 定位為不斷發展的數位基礎設施領域的領導者。我們感謝您的持續支持，並期待向您通報我們的進展。再次感謝您的加入，祝您有美好的一天。操作員。

Thank you for joining us today for Stronghold conference call. You may now disconnect.

感謝您今天參加 Stronghold 電話會議。您現在可以斷開連線。