Bitcoin Miner Stronghold Pursues Debt Restructuring with Convertible Preferred Share Issuance

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Stronghold Digital Mining (SDIG) has agreed with bondholders to swap $17.9 million of convertible debt for $23.1 million of convertible preferred stock, according to a statement released Tuesday morning.

Among the many bitcoin miners who have needed debt restructuring and cost reduction amid the continued downturn in the crypto market, Stronghold in August announced a deal to return 26,200 mining rigs. to lender NYDIG in exchange for extinguishing $67.4 million in debt. Later in 2022, the company canceled a hosting deal with Northern Data in Germany (NB2X:GER).

Under the agreement announced this morning, 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 a par value approximately $23.1 million.

The preferred shares will be convertible into common shares at a conversion price of $0.40 per share. If all of the preferred shares are converted, about 57.8 million common shares would be issued, adding about 46% to the current float, according to the company. The new preferred stock bears no dividend.

At the end of 2022, Stronghold had about $12.4 million in unrestricted liquidity and about 6 bitcoins (about $100,000 at current price).

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