Bitcoin Miner Stronghold Continues Debt Restructuring With Convertible Preferred Share Issuance
Stronghold Digital Mining (SDIG) has agreed with noteholders to exchange $17.9 million of convertible debt for $23.1 million of convertible preferred stock, according to a Tuesday morning statement.
Among many bitcoin miners that have found themselves in need of debt restructuring and cost-cutting amid the continuing crypto market downturn, Stronghold in August announced a deal to return 26,200 mining rigs to lender NYDIG in exchange for the extinguishment of $67.4 million in debt. The company later in 2022 cancelled a hosting agreement with Germany's Northern Data (NB2X:GER).
Under this morning's announced agreement, the 10% convertible notes (approximate principal of $17.9 million) will be extinguished in exchange for a new series (Series C) of convertible preferred shares with face value of about $23.1 million.
The preferred shares will be convertible into common stock at a conversion price of $0.40 per share. If all the preferred stock is converted, about 57.8 million shares of common shares would be issued, adding about 46% to the current common float, according to the company. The new preferred stock bears no dividend.
As of the end of 2022, Stronghold had approximately $12.4 million of unrestricted cash and about 6 bitcoin (roughly $100,000 at the current price).