Stronghold Digital Mining amends credit agreement with Whitehawk

By Mary-Katherine Stinson

Lexington, Ky., Feb. 7 – Stronghold Digital Mining, Inc. announced that its affiliate Stronghold Digital Mining Holdings, LLC and subsidiaries amended its credit agreement dated Oct. 27 with Whitehawk Finance LLC and the other lenders, according to a press release on Tuesday.

The amended credit facility, dated Feb. 6, includes the following key changes:

• No mandatory principal amortization payments are required until July 2024, saving $29 million in cumulative monthly principal amortization that would have been required via the original credit agreement during the same time period;

• Beginning at the end of June, Stronghold will repay the principal amount of debt outstanding through a monthly cash sweep calculated as 50% of the average daily cash balance for the month in excess of $7.5 million;

• Stronghold will have the option to pay interest-in-kind for up to six months if the company’s average daily cash balance during a month is less than $5 million;

• All leverage covenants prior to the third quarter of 2024 are eliminated with a 4x net debt-to-EBITDA ratio covenant applying beginning on Sept. 30, 2024;

• The minimum liquidity covenants have been reduced to $2.5 million through March 31, 2024, $5 million from April 1, 2024 through Dec. 31, 2024, and $7.5 million thereafter; and

• No equity will be issued in relation to the agreement.

The amended agreement also changed the representation of the company’s board to allow the appointment of one independent director and one observer.

The agreement bears interest at SOFR plus 1,000 basis points with a 3% floor, which is unchanged from the original agreement.

As of Feb. 3, there is approximately $54.9 million principal amount outstanding from $35.1 million in term loans and $23 million in additional commitments.

Stronghold is a New York-based vertically integrated Bitcoin mining company with an emphasis on environmentally beneficial operations.

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