NONCONTROLLING INTERESTS

12 Months Ended

Dec. 31, 2023

NOTE 13 – 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 Q Power will result in changes to the amount recorded as noncontrolling interest. Refer to Note 12 – Redeemable Common Stock, which describes the redemption rights of the noncontrolling interest.

The noncontrolling interest representing the common units of Stronghold LLC held by Q Power represented 17.8% and 45.1% ownership of Stronghold LLC, as of December 31, 2023, and 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 table summarizes the redeemable common stock adjustments pertaining to the noncontrolling interest as of and for the year ended December 31, 2023:


	Class V Common Stock Outstanding	Fair Value Price		Redeemable Common Stock Adjustments
Balance – December 31, 2022	2,605,760	$	4.51	$	11,754,587
Net loss attributable to noncontrolling interest	—			(30,428,749)
Redemption of Class V shares	(200,000)			(1,210,000)
Adjustment of redeemable common stock to redemption amount (1)	—			40,300,278
Balance – December 31, 2023	2,405,760	$	8.49	$	20,416,116
(1) Redeemable common stock 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.