Stronghold Digital Mining Announces $9 Million Private Placement; Additional Details on Improved Efficiency and Cost Reduction Program
13 Setembro 2022 - 6:00PM
Stronghold Digital Mining, Inc. (NASDAQ:
SDIG) (“Stronghold”, or the “Company”) has entered into a
securities purchase agreement with each of an institutional
investor and the Company’s co-chairman and chief executive officer,
Greg Beard, to purchase 5,000,000 and 602,609 shares of
Class A common stock at a purchase price of $1.60 and $1.66,
respectively, and warrants to purchase an aggregate 5,602,409
shares of Class A common stock. The warrants will have an initial
exercise price of $1.75 per share (subject to adjustments) and will
expire five years from the date of issuance.
Gross proceeds from the non-brokered private
placement are expected to be approximately $9.0 million before
deducting offering expenses. The closing of the private placement
is expected to occur on or about September 15, 2022, subject to the
satisfaction of customary closing conditions. The proceeds from the
private placement will be used for general corporate purposes,
which may include future acquisition of Bitcoin miners.
“I am excited to see an esteemed institutional
investor demonstrate its belief in the Company while also
broadening my own commitment to and belief in the Company,” said
Beard. “We believe the private placement continues to demonstrate
our ability to raise capital in creative ways that continue to
strengthen the Company’s financial position. The proceeds from the
private placement are expected to further our strategy of acquiring
Bitcoin miners as we continue to re-stock our data centers.”
The securities were offered in a private
placement under Section 4(a)(2) of the Securities Act of 1933, as
amended (the "Act"), and Regulation D promulgated thereunder and
have not been registered under the Act, or applicable state
securities laws. Accordingly, the securities may not be offered or
sold in the United States except pursuant to an effective
registration statement or an applicable exemption from the
registration requirements of the Act and such applicable state
securities laws. Pursuant to a registration rights agreement with
the investors, the Company has agreed to file one or more
registration statements with the Securities and Exchange Commission
(the “SEC”) covering the resale of the shares of common stock and
the shares issuable upon exercise of the warrants.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any of the
securities described herein, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
Cost Reduction
Plan
Additionally, the Company has identified an
estimated $8 million to $11 million of potential annualized cost
savings, including cost savings resulting from the Company’s
internalization of various support services and completion of
certain non-recurring power plant upgrades, that it believes will
benefit its cost structure in 2023 compared to 2022. Approximately
$2.5 million of the reductions are complete, approximately $6
million in additional reductions are planned, and an additional
$2.5 million are under review by the Company.
Beard commented, “We are highly focused on
becoming a more efficient Company and the team has worked
extensively to identify areas for material improvements to our
operating costs. These opportunities are meaningful as we are
nearing the peak period of heavy investment in our power plants to
ensure reliable and low-cost power generation, and we are actively
executing on other cost reduction initiatives to improve our cash
flow profile.”
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.
Cautionary Statement Concerning
Forward-Looking StatementsCertain statements contained in
this press release constitute “forward-looking statements.” within
the meaning of the Private Securities Litigation Reform Act of
1995. You can identify forward-looking statements because they
contain words such as “believes,” “expects,” “may,” “will,”
“should,” “seeks,” “approximately,” “intends,” “plans,” “estimates”
or “anticipates” or the negative of these words and phrases or
similar words or phrases which are predictions of or indicate
future events or trends and which do not relate solely to
historical matters. Forward-looking statements and the business
prospects of Stronghold are subject to a number of risks and
uncertainties that may cause Stronghold’s actual results in future
periods to differ materially from the forward-looking statements.
These risks and uncertainties include, among other things: the
ability to close on the private placement; our ability to purchase
Bitcoin miners; our ability to execute on our cost reduction plan;
the hybrid nature of our business model, which is highly dependent
on the price of Bitcoin; our dependence on the level of demand and
financial performance of the crypto asset industry; our ability to
manage growth, business, financial results and results of
operations; uncertainty regarding our evolving business model; our
ability to retain management and key personnel and the integration
of new management; our ability to raise capital to fund business
growth; our ability to maintain sufficient liquidity to fund
operations, growth and acquisitions; our substantial indebtedness
and its effect on our results of operations and our financial
condition; uncertainty regarding the outcomes of any investigations
or proceedings; our ability to enter into purchase agreements,
acquisitions and financing transactions; our ability to perform our
obligations and satisfy all conditions to closing under the
agreements related to our NYDIG debt extinguishment transaction;
public health crises, epidemics, and pandemics such as the
coronavirus pandemic; our ability to procure crypto asset mining
equipment from foreign-based suppliers; our ability to maintain our
relationships with our third party brokers and our dependence on
their performance; our ability to procure crypto asset mining
equipment; developments and changes in laws and regulations,
including increased regulation of the crypto asset industry through
legislative action and revised rules and standards applied by The
Financial Crimes Enforcement Network under the authority of the
U.S. Bank Secrecy Act and the Investment Company Act; the future
acceptance and/or widespread use of, and demand for, Bitcoin and
other crypto assets; our ability to respond to price fluctuations
and rapidly changing technology; our ability to operate our coal
refuse power generation facilities as planned; our ability to avail
ourselves of tax credits for the clean-up of coal refuse piles; and
legislative or regulatory changes, and liability under, or any
future inability to comply with, existing or future energy
regulations or requirements. More information on these risks and
other potential factors that could affect our financial results is
included in our filings with the Securities and Exchange
Commission, including in the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections of our Annual Report on Form 10-K filed on
March 29, 2022 and our Quarterly Reports on Form 10-Q filed on May
16, 2022 and August 16, 2022. Any forward-looking statement speaks
only as of the date as of which such statement is made, and, except
as required by law, we undertake no obligation to update or revise
publicly any forward-looking statements, whether because of new
information, future events, or otherwise.
Investor Contact:
Matt Glover or Jeff Grampp, CFAGateway Group,
Inc. SDIG@GatewayIR.com1-949-574-3860
Media Contact:
contact@strongholddigitalmining.com
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