Stronghold shareholders approve Bitfarms merger

NEW YORK - Stronghold Digital Mining, Inc. (NASDAQ: SDIG), a vertically integrated Bitcoin mining company with a current market capitalization of $47.6 million, has announced that its stockholders have voted in favor of the proposed merger with Bitfarms Ltd. (NASDAQ/TSX: BITF), a fellow cryptocurrency mining company. The approval came during a special meeting held on Thursday, where approximately 99.6% of the votes cast, representing about 54.5% of Stronghold’s outstanding shares, supported the merger. According to InvestingPro data, Stronghold operates with a significant debt burden and currently trades below its Fair Value, suggesting potential upside from current levels.

Gregory Beard, CEO and Chairman of Stronghold, expressed satisfaction with the stockholders’ decision, seeing it as a recognition of the merger’s value and potential. The merger is expected to close in March 2025, pending the satisfaction or waiver of the remaining conditions.

Stronghold operates environmentally beneficial coal refuse power generation facilities in Pennsylvania, where it houses its miners. The merger with Bitfarms is anticipated to create a combined entity with enhanced scale and operational capabilities in the cryptocurrency mining industry.

The transaction has been a subject of rigorous scrutiny, with the companies addressing various conditions, including stockholder and regulatory approvals. The final report on the special meeting’s results will be filed with the Securities and Exchange Commission on a Form 8-K.

While the merger has been positively received by Stronghold’s stockholders, the companies acknowledge the inherent uncertainties and risks involved in such transactions. These include potential litigation, the possibility of the merger not completing as planned, and the impact on Stronghold’s business and stock price if the merger is delayed or does not occur.

The information for this article is based on a press release statement from Stronghold Digital Mining, Inc.

In other recent news, Stronghold Digital Mining, Inc. has announced a restatement of its financial results for the third quarter of 2024 following a review by the Securities and Exchange Commission (SEC). The company disclosed that it had initially made an error in revenue recognition related to Bitcoin miner hosting contracts, which affected the reported revenues for the first and second quarters of the year. This misclassification involved $3,145,003 in cryptocurrency hosting revenues that should have been reported differently. The correction will be reflected in an amended Quarterly Report on Form 10-Q/A, although it does not impact the company’s net loss for any quarterly periods in 2024. The SEC’s review led to a reassessment, resulting in the conclusion that the original financial statements should not be relied upon. Additionally, Stronghold Digital Mining identified a material weakness in its internal control over financial reporting. The company is taking steps to address these issues in the amended filing. These developments highlight the significance of accurate financial reporting and effective internal controls.

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