Stronghold Digital Mining completes merger with Bitfarms

Stronghold Digital Mining, Inc. (NASDAQ:SDIG), a Delaware-incorporated finance services company with a market capitalization of $1.42 billion, has officially completed its merger with Bitfarms Ltd., a Canadian corporation, as of March 14, 2025. This strategic move resulted in Stronghold becoming a wholly owned, indirect subsidiary of Bitfarms. According to InvestingPro analysis, Stronghold maintains a FAIR financial health score, with several key metrics suggesting operational challenges ahead.

The merger agreement, initially announced on August 21, 2024, and subsequently amended on September 12, 2024, led to the conversion of each share of Stronghold’s Class A common stock into the right to receive 2.520 common shares of Bitfarms. Concurrently, all shares of Stronghold’s Class V common stock were cancelled and ceased to exist. InvestingPro data reveals that Stronghold has faced significant stock volatility, with the stock price experiencing notable fluctuations over the past year. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Prior to the effective time of the merger, each share of Series C Convertible Preferred Stock of Stronghold converted into 250 shares of Company Class A Common Stock, and all shares of Series C Preferred Stock ceased to exist. Additionally, Stronghold required members of Stronghold Digital Mining Holdings LLC to exchange their Company Holdco Units, along with a corresponding number of shares of Company Class V Common Stock, for an equivalent number of shares of Company Class A Common Stock, leaving no shares of Company Class V Common Stock outstanding.

At the effective time, all outstanding restricted stock unit awards that were granted prior to August 21, 2024, vested in full and were treated as shares of Company Class A Common Stock for purposes of the merger. Restricted stock unit awards granted between August 21, 2024, and March 14, 2025, were converted into Bitfarms restricted stock unit awards. Options to purchase shares of Company Class A Common Stock were also converted into options to acquire Bitfarms Common Shares, with adjustments made to the number of shares and exercise prices based on the exchange ratio.

In connection with the merger, all outstanding warrants to purchase shares of Company Class A Common Stock were converted into warrants to acquire shares of Bitfarms Common Shares, with necessary adjustments made to reflect the exchange ratio.

The merger led to the delisting of Stronghold’s Class A Common Stock from Nasdaq, with trading ceasing prior to the market opening on March 17, 2025. InvestingPro analysis highlights that Stronghold operates with a significant debt burden, with short-term obligations exceeding liquid assets - a crucial consideration for investors following this corporate restructuring. Furthermore, Stronghold intends to file a Form 15 with the SEC to suspend its reporting obligations and terminate the registration of Company Class A Common Stock under Section 12(g) of the Exchange Act.

This transformational event also led to the departure of all directors of Stronghold effective at the time of the merger. Additionally, the officers of the Company ceased their service. The certificate of incorporation and bylaws of the Company were amended and restated in connection with the merger.

The issuance of Bitfarms Common Shares in connection with the merger was registered under the Securities Act of 1933, as amended, pursuant to Bitfarms’ registration statement on Form F-4, which was declared effective by the SEC on January 28, 2025.

This article is based on a press release statement.

In other recent news, Stronghold Digital Mining, Inc. announced that its shareholders have approved a merger with Bitfarms Ltd. Approximately 99.6% of the votes cast, representing about 54.5% of Stronghold’s outstanding shares, were in favor of the merger. This decision was made during a special meeting, and the merger is expected to close in March 2025, pending remaining conditions. The merger aims to create a combined entity with enhanced scale and operational capabilities in the cryptocurrency mining industry. Both companies have addressed various conditions, including stockholder and regulatory approvals, to proceed with the merger. While the merger has been positively received by Stronghold’s stockholders, the companies recognize the inherent uncertainties and risks, such as potential litigation and the possibility of delays. The final results of the special meeting will be filed with the Securities and Exchange Commission on a Form 8-K.

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