According to a new filing with the US Securities and Exchange Commission on Dec. 20, Bitcoin (BTC) miner Greenidge stated that it had reached an agreement with its creditor, financial technology company NYDIG, to restructure a debt of approximately USD 74 million. The agreement, in the form of a non-binding term sheet, would result in a major shift in Greenidge’s current business strategy. Essentially, Greenidge would transition from self-mining to hosting NYDIG’s mining rigs.
According to the conditions, NYDIG would purchase miners with approximately 2.8 exahash per second (EH/s) of mining capacity to be hosted by Greenidge, providing NYDIG with rights to a mining deposit within three months of the completion of the debt restructuring and agreements accommodation. In exchange for consideration equal to the miners acquired and the transfer of mining infrastructure and credits to NYDIG, the company would agree to a reduction of Greenidge’s debt of between $57 million and $68 million.
Also, Greenidge will guarantee a significant portion of its assets free of charge to secure the remaining balance of the NYDIG loan. The company would retain ownership of the miners with a capacity of 1.2 EH/s. As of October 31, 2022, Greenidge had approximately 2.5 EH/s of mining capacity from approximately 24,500 miners in service.
However, the company also wrote that “uncertainty remains regarding Greenidge’s financial condition and substantial doubt about its ability to continue as a going concern.” Last month, Greenidge used approximately $8 million of its cash during operations, of which $5.5 million was for principal and interest payments. As of November 30, 2022, the company’s cash balance was approximately USD 22.0 million. Greenidge also warned that “NYDIG and Greenidge will endeavor to enter into definitive documentation that reflects the terms described in this release, but there can be no assurance that such terms will not materially change or that the transactions discussed in this release will be consummated.”
Last September, Cointelegraph reported that Greenidge had completed a merger with customer and technical support solutions provider Support.com to become a NASDAQ-listed mining company. D.Since then, shares have plunged more than 99%, partly due to a combination of the ongoing crypto winter, rising electricity prices, increasing mining difficulty, and declining market prices for Bitcoin mining equipment.
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