Stronghold Digital Mining Closes $10 Million Private Placement and Announces Addition of 600 PH/s through the Purchase of 5,000 MicroBT Whatsminer M50 Bitcoin Miners
21 April 2023 - 3:17PM
Stronghold Digital Mining, Inc. (NASDAQ:
SDIG) (“Stronghold”, or the “Company”) today announced
that it closed the previously announced securities purchase
agreements with an institutional investor and the Company’s
chairman and chief executive officer, Greg Beard (collectively the
“Purchasers”), and sold 9,000,000 shares of Class A Common Stock
and share equivalents to the institutional investor and 1,000,000
shares of Class A Common Stock to Mr. Beard, in each case at a
price of $1.00 per share equivalent (the “Private Placement”). The
Company also issued to the Purchasers warrants to purchase an
aggregate of 10,000,000 shares of Class A Common Stock, with an
initial exercise price of $1.10 per share (subject to adjustments),
and such warrants are not exercisable until six months after
issuance. In addition, the exercise price for the 5,602,409
warrants previously issued to the Purchasers on September 19, 2022,
will be adjusted from $1.75 per share to $1.01 per share.
The non-brokered Private Placement closed on
April 21, 2023. Gross proceeds from the Private Placement were $10
million, before deducting offering expenses.
Growing Hash Rate Capacity by over 20%
through Highly Accretive Purchase of Bitcoin Miners
On April 20, 2023, Stronghold entered into a
Master Sales and Purchase Agreement to acquire 5,000 new,
latest-generation MicroBT Whatsminer M50 miners (the “M50 Miners”)
for $15.50 per terahash per second, including shipping (the “Miner
Purchase”). The M50 Miners have an average hash rate of 118
terahash per second and energy efficiency of 28.5 joules per
terahash. This addition of approximately 600 petahash per second of
hash rate capacity is expected to grow Stronghold’s total delivered
hash rate capacity by over 20% to over 3.2 exahash per second
(“EH/s”) and to approximately 3.5 EH/s with all remaining
contracted miners delivered. The Company expects to receive and
install the M50 Miners in May 2023. The Company continues to
believe that it is on track to meet its previously disclosed 4 EH/s
guidance for 2023, which represents the approximate capacity of its
existing data centers at its wholly owned Panther Creek and
Scrubgrass plants.
“If you notice something different about this
transaction for us, you are correct,” said Greg Beard, chairman and
chief executive officer of Stronghold. “We are not issuing equity
to pay creditors. We believe that is in the past. We are issuing
equity to invest in growing our business, and I am investing
personally because we found an exceptionally compelling opportunity
to purchase Bitcoin miners. Recent power prices have been $20-35
per megawatt hour (“MWh”) during the month of April, and forward
power prices for the next 12 months currently average approximately
$45 per MWh. We expect that the M50 Miners will generate revenue of
over $100 per MWh based on current hash price, with minimal
incremental cash operating costs, which represents significant
potential uplift to revenue and cash flow. We believe that such
cash flow uplift would allow us to recover our entire investment in
approximately one year based on current hash price, forward power
prices, and 95% assumed miner uptime. Said differently, we believe
that the purchase price represents approximately one times the
annual cash flow uplift, which we view as highly accretive for the
Company and our shareholders.”
About Stronghold Digital Mining,
Inc.
Stronghold is a vertically integrated Bitcoin
mining company with an emphasis on environmentally beneficial
operations. Stronghold houses its miners at its wholly owned and
operated Scrubgrass Plant and Panther Creek Plant, both of which
are low-cost, environmentally beneficial coal refuse power
generation facilities in Pennsylvania.
Investor Contact:
Matt Glover or Alex KovtunGateway Group, Inc.
SDIG@GatewayIR.com1-949-574-3860
Media Contact:
contact@strongholddigitalmining.com
Forward Looking Statements:
The information, financial projections and other
estimates contained herein contain “forward-looking” statements as
that term is defined in Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended by the Private Securities Litigation Reform Act of 1995,
including, but not limited to statements regarding the anticipated
performance of the Company and its assets. Such projections and
estimates are as to future events and are not to be viewed as
facts, and reflect various assumptions of management of the Company
concerning the future performance of the Company and are subject to
significant business, financial, economic, operating, competitive
and other risks and uncertainties and contingencies (many of which
are difficult to predict and beyond the control of the Company)
that could cause actual results to differ materially from the
statements and information included herein. Forward-looking
statements concern future circumstances and results and other
statements that are not historical facts and are sometimes
identified by the words “may,” “will,” “should,” “potential,”
“intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,”
“overestimate,” “underestimate,” “believe,” “could,” “project,”
“predict,” “continue,” “target” or other similar words or
expressions. Forward-looking statements are based upon current
plans, estimates and expectations that are subject to risks,
uncertainties and assumptions. Forward-looking statements may
include statements about various risks and uncertainties, including
those described under the heading "Risk Factors" as detailed from
time to time in Stronghold’s reports filed with the SEC, including
Stronghold’s annual report on Form 10-K, periodic quarterly reports
on Form 10-Q, current reports on Form 8-K and other documents filed
with the SEC. Such risk and uncertainties are not exclusive. Any
forward-looking statements speak only as of the date of this
communication. The Company does not undertake any obligation to
update any forward-looking statements, whether as a result of new
information or development, future events or otherwise, except as
required by law. Readers are cautioned not to place undue reliance
on any of these forward-looking statements. Additionally,
descriptions herein of market conditions and opportunities are
presented for informational purposes only; there can be no
assurance that such conditions will actually occur or result in
positive returns. Recipients of this communication should make
their own investigations and evaluations of any information
referenced herein.
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