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).
