Stronghold Enters Into $15 Million Private Placement
- None.
- The Panther Creek Plant experienced operational issues resulting in additional expenses of approximately $1.5 million, impacting the company's financials negatively.
Insights
The private placement of 2,300,000 shares by Stronghold Digital Mining, Inc. at $6.71 per share, along with the issuance of warrants with an exercise price of $7.00, represents a strategic move to raise capital. The gross proceeds of $15.4 million are earmarked for enhancing the efficiency of the miner fleet, accelerating carbon capture initiatives and improving the company's working capital position. This capital injection may bolster the company's long-term growth prospects by enabling investments in technology and infrastructure that are critical in the competitive digital mining sector.
Adjusting the exercise price of previously issued warrants to $7.00 per share could potentially dilute existing shareholders but may also align investor interests by resetting the strike price closer to current market conditions. This action suggests a recalibration of the company's capital structure in light of its current stock performance and market valuation.
The operational challenges faced by the Panther Creek Plant, resulting in reduced output and additional fuel costs and maintenance expenses of approximately $1.5 million, underscore the volatility inherent in the energy production sector. The reported 60% net capacity factor during the issue period and subsequent importation of electricity to meet data center needs highlight the plant's operational dependency on consistent performance. The resumption of operations and the recent record hash rate achievement signal a recovery that could reassure stakeholders of the plant's potential to maintain high utilization rates.
The curtailment of load due to PJM system reliability issues and a transmission line outage also illustrates external dependencies that can impact operations. Investors may weigh the risks of such incidents against the company's strategies for mitigating operational disruptions, including its investment in carbon capture technology, which may offer both environmental and regulatory advantages.
Stronghold Digital Mining, Inc.'s focus on accelerating its carbon capture initiative as part of the use of proceeds from the private placement may appeal to environmentally conscious investors. The digital mining industry faces scrutiny over its environmental impact, particularly concerning energy consumption and carbon emissions. By investing in carbon capture, Stronghold positions itself as a proactive player in addressing these concerns, potentially enhancing its ESG profile and aligning with investor demand for responsible corporate behavior.
However, the operational issues at the Panther Creek Plant and the resultant need to import electricity, possibly from less sustainable sources, could temporarily detract from the company's environmental initiatives. Stakeholders may monitor the effectiveness of the company's carbon capture efforts and operational stability as indicators of its commitment to sustainability and operational excellence.
Provides Panther Creek Plant Update
NEW YORK, Dec. 22, 2023 (GLOBE NEWSWIRE) -- Stronghold Digital Mining, Inc. (NASDAQ: SDIG) (“Stronghold”, or the “Company”) today announced that it entered into a securities purchase agreement with an existing institutional investor (the “Purchaser”) to sell 2,300,000 shares of Class A Common Stock and share equivalents, in each case at a price of
The non-brokered Private Placement was executed on December 21, 2023, and is expected to close on December 22, 2023. Gross proceeds from the Private Placement will be
Additionally, the exercise price for 1,400,000 warrants previously issued on April 21, 2023, and September 19, 2022, will be adjusted from
Panther Creek Operational Update
On November 20, 2023, the Company’s wholly owned Panther Creek Plant experienced unexpected ash silo flow issues. As a result, the Company operated the plant at a lower output while the plant worked to remedy the issue. From November 20, 2023, through December 7, 2023, the Panther Creek Plant operated at approximately
While progress was made, on December 8, the Company elected to shut off the plant for what was expected to be a short-term, unplanned outage to fully fix the ash silo. The Company took these steps to ensure maximum uptime and availability during the coming winter months. The repairs were not completed until December 21, resulting in the Panther Creek Plant importing electricity between December 8 and December 21. Between December 12 and December 20, the Panther Creek data center was unexpectedly required to curtail load to between 10 MW and 50 MW due to PJM system reliability issues and a transmission line outage.
In total, the Company estimates that it incurred fuel costs and operations and maintenance expenses of approximately
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 Kovtun
Gateway Group, Inc.
SDIG@gateway-grp.com
1-949-574-3860
Media Contact
contact@strongholddigitalmining.com
Cautionary Statement Concerning Forward-Looking Statements:
Certain statements contained in this press release, including guidance, 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 recent restructuring of the Company’s debt and the performance and satisfaction of various obligations under the agreements entered into in order to effect such restructuring of debt; 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; public health crises, epidemics, and pandemics such as the coronavirus pandemic; our ability to procure and install crypto asset mining equipment, including from foreign-based suppliers; our ability to maintain our relationships with our third party brokers and our dependence on their performance; 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 remain listed on a stock exchange and maintain an active trading market; 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 April 3, 2023 and in our subsequently filed Quarterly Reports on Form 10-Q. Any forward-looking statement or guidance 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 or guidance, whether because of new information, future events, or otherwise.
FAQ
What did Stronghold Digital Mining, Inc. (NASDAQ: SDIG) announce?
What is the expected gross proceeds from the Private Placement?
What will the proceeds from the Private Placement be used for?
What operational issues did the Panther Creek Plant experience?
What is the current status of the Panther Creek Plant?
