Stronghold Terminated A Hosting Deal With Northern Data
According to a document filed Friday with the US Securities and Exchange Commission, Stronghold believes that this settlement will save the company between $500,000 and $1.1 million in profit share payments per month through 2023 and that it will improve cash flow by $7 to $20 million until September 2024.
The agreement reduces Stronghold’s obligation to pay Northern Data $2.6 million and grants it the right to operate about 50 megawatts of electrical capacity from Northern Data’s modular data center for two years at a cost of $1,000 per year.
Stronghold has the option to purchase the containers at the conclusion of that term for $2 million to $6 million, dependent on mining economics at the time.
According to co-chairman and CEO Greg Beard, the transaction would offer Stronghold better operational control of its bitcoin company while enhancing cash flow creation over the next two years. He said:
“Overall, we believe that we continue to make significant progress towards improving our balance sheet, liquidity and cost structure to deliver shareholder value.”
The business recently announced a plan to repay $67.4 million in debt to NYDIG by returning around 26,200 mining equipment, as well as refinancing a loan with WhiteHawk and adding up to $20 million in extra borrowing capacity. It has paid off $65.3 million of the debt so far, with around $2 million outstanding.
Stronghold said in August that it would move its focus from mining Bitcoin to selling electricity from its two waste coal facilities in Pennsylvania for the foreseeable future, citing the decrease in Bitcoin’s value and the spike in power rates as causes.
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