STRONGHOLD DIGITAL MINING, INC. Item 1.01 Entry into a Material Definitive Agreement. OnJune 30, 2021 ,Stronghold Digital Mining Equipment, LLC ("Equipment"), a wholly owned subsidiary ofStronghold Digital Mining, Inc. (the "Company"), entered into an equipment financing agreement (the "WhiteHawk Financing Agreement") withWhiteHawk Finance LLC ("WhiteHawk") whereby WhiteHawk originally agreed to lend to Equipment an aggregate amount not to exceed$40.0 million to finance the purchase of certain Bitcoin miners and related equipment. The WhiteHawk Financing Agreement originally contained terms requiring that the 15,000 miners being purchased pursuant to a purchase agreement (the "MinerVa Purchase Agreement") withMinerVa Semiconductor Corp. ("MinerVa") be delivered on or beforeDecember 31, 2021 . Failure to deliver the miners by the deadline contained in the WhiteHawk Financing Agreement would result in an Event of Default which could only be cured by a waiver from WhiteHawk. Such Event of Default would give WhiteHawk the right to accelerate all amounts then outstanding under the WhiteHawk Financing Agreement. MinerVa did not deliver all of the miners under the MinerVa Purchase Agreement by theDecember 31, 2021 deadline. The Company has received over 1,000 of the miners to date, and MinerVa has advised the Company to expect delivery of the remaining miners under the agreement to arrive by the end ofMarch 2022 . OnDecember 31, 2021 , Equipment and WhiteHawk amended the WhiteHawk Financing Agreement (the "WhiteHawk Amendment") to extend the Final Minerva Delivery Date fromDecember 31, 2021 toApril 30, 2022 . Failure to deliver the miners byApril 30, 2022 will result in an Event of Default under the WhiteHawk Financing Agreement and WhiteHawk having the right to accelerate all amounts then outstanding under the WhiteHawk Financing Agreement. Pursuant to the WhiteHawk Amendment, Equipment paid an Amendment Fee in the amount of$250,000 to WhiteHawk. All capitalized words used but not defined herein have the meanings assigned in the WhiteHawk Amendment. The foregoing description is qualified in its entirety by reference to the full text of the WhiteHawk Financing Agreement, which is filed as Exhibit 10.17 to the Company's Registration Statement filed in connection with its initial public offering (File No. 333-258188) and incorporated into this Item 1.01 by reference, and the WhiteHawk Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K (this "Form 8-K") and incorporated into this Item 1.01 by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included under Item 1.01 of this Form 8-K is incorporated by reference into this Item 2.03 of this Form 8-K.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
OnNovember 17, 2021 , the Board of Directors (the "Board") of the Company appointedMatthew J. Smith to the Board, and no determinations regarding any committee assignments were made at that time. OnJanuary 3, 2022 , the Board appointedMr. Smith to the Compensation Committee and the Audit Committee of the Board, effective immediately. The Board determined thatMr. Smith satisfied the additional independence requirements of theNasdaq Stock Market and theSecurities and Exchange Commission applicable to members of theCompensation Committee andAudit Committee . --------------------------------------------------------------------------------
Additionally, the Board also modified the composition of other Board committees
as follows, all effective as of
Audit Committee:
Compensation Committee:
Nominating and Corporate Governance Committee:
Item 7.01 Regulation FD Disclosure
OnJanuary 6, 2022 , the Company issued a press release announcing the WhiteHawk Amendment and other events and milestones related to the Company's mining activity. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference. The information in this Item 7.01 of this Form 8-K, including Exhibit 99.1, is being "furnished" pursuant to General Instruction B.2 of Form 8-K and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth in such filing. Item 8.01 Other Events General Business Update OnJanuary 6, 2022 , the Company announced that it has exceeded 1.3 exahash per second ("EH/s") of total hash rate capacity with over 14,000 miners received to date, over 8,700 of which were received in the last five weeks. The Company previously reported total hash rate capacity of approximately 185 petahash per second ("PH/s") from approximately 3,000 miners as ofSeptember 30, 2021 and approximately 470 PH/s from nearly 6,000 miners as ofNovember 29, 2021 . Additionally, the Company has commenced mining Bitcoin at thePanther Creek power plant, the 80-megawatt reclamation and power generation facility that the Company acquired onNovember 2, 2021 (the "Panther Creek Plant"), and the Company continues to scale the operation at the Panther Creek Plant. The Company expects the Scrubgrass power plant located inNesquehoning, Pennsylvania and the Panther Creek Plant to support Bitcoin miners with total hash rate capacity exceeding 4 EH/s by the end of the second quarter of 2022. Cautionary Statement Concerning Forward-Looking Statements Certain statements contained in this Current Report on Form 8-K 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 the Company are subject to a number of risks and uncertainties that may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things: 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; our ability to acquire and receive miners on a timely basis or at all; our ability to raise capital to fund business growth; our ability to enter into purchase agreements and acquisitions; our ability to finance our growth; our ability to satisfy the collateral requirements under our finance agreements; public health crises, epidemics, and pandemics such as the coronavirus pandemic; our ability to procure crypto asset mining equipment; our ability to respond to price fluctuations and rapidly changing technology; our ability to operate our coal refuse power generation facilities as planned; 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 theSecurities and Exchange Commission , including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our Registration Statement on Form S-1 (File No. 333-258188), filed onOctober 19, 2021 and any subsequently filed Quarterly Reports on Form 10-Q. 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. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 10.1 First Amendment to Financing Agreement, dated as
of
Stronghold Digital Mining Equipment, LLC , WhiteHawk
by each Guarantor named therein.
99.1* Press Release, dated as of J a nuary 6, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document). _____________ * Furnished herewith.
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