Stronghold Digital Mining (SDIG) has agreed with bondholders to exchange $17.9 million of convertible notes for $23.1 million of convertible preferred stock. Tuesday’s press release.
The deal is the latest effort by Bitcoin miners to improve their balance sheets. August, Stronghold announced a deal Return 26,200 mining rigs to lender NYDIG in exchange for settling $67.4 million in debt. In September, the company canceled a hosting deal with Germany’s Northern Data to improve cash flow.
Under the agreement announced Tuesday, 10% convertible bonds will be extinguished in exchange for a new series of convertible preferred stock that can be converted into common stock at 40 cents per share.
Approximately 57.8 million shares of common stock would be issued if all preferred shares were converted, adding approximately 46% to current common stock, the company said. Stronghold will not pay dividends on new preferred stock.
The transaction, which is expected to close by February 20, will bring Stronghold’s outstanding debt to less than $55 million, CEO Greg Beard said in a statement.
As of the end of 2022, Stronghold will have approximately $12.4 million in unlimited cash and approximately 6 Bitcoins, worth approximately $100,000 at current prices.
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Update (January 3rd 15:00 UTC): Added details about closing dates and outstanding debt in the fifth paragraph.